Bloomberg almost gets it right. While Megan McArdle correctly identifies the problem with Spotify in the context of current market economics she fails to recognize the source of the downward pressure on online music distribution, Ad Funded Piracy.
Lou Reed and Dead Kennedys Go Public Against Ad Funded Piracy with Facebook Posts
As we have said many times, we don’t object to streaming as a business model, we only object to the poor revenue and compensation economics that these services currently provide. In other words, the economics of music streaming are a direct symptom of the larger disease of Ad Funded Piracy – this is why we hope to see more artists speaking up about the actual source of the problem as pirate sites are a for profit business that do not compensate artists at all.
BLOOMBERG:
In other words, while the cost side has improved, the revenue side has gotten worse even faster. People simply aren’t willing to pay very much for recorded music anymore. If you’re an artist, and especially if you’re a record label, that’s very bad news. Naturally, some artists want to shoot the messenger, blaming Spotify for their paltry payments. But Spotify is not the problem. The market is the problem. Spotify is just the messenger telling them what the market is now willing to pay for their songs.
We have a suggestion for any streaming music company executives who should happen across this post – if you really want to help musicians, why not start educating the media and musicians about the cause and source of why streaming economics are really so bad, Ad Funded Piracy.
Let’s join forces and aggregate the power of the community to restore a fair, ethical and balanced marketplace to music so that artists, songwriters and performers can have sustainable careers, and you too.
READ THE FULL STORY AT BLOOMBERG:
http://www.bloomberg.com/news/2013-12-09/spotify-isn-t-why-musicians-can-t-make-a-living.html
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The Trichordist 
I tried to make it pretty clear in the piece that the reason people are no longer willing to pay so much for music is piracy.
This post hits the nail on the head. Google was all for stopping SOPA/PIPA and presenting themselves and ambassadors of a new free world because at the time it suited their interests. Now they realized they could make money off streaming services and convert some illegitimate file sharers to a legal model with the introduction of Google Music among other things.
Because in the end: It’s obvious to me that Spotify is on the side of musicians, artists, and labels in trying to stop piracy, while Google/YouTube doesn’t care if you pirate or stream, as long as you do it with them they make money! They want the bad guys and the good buys in their club.
Google/YouTube have too many outside interests campaigning for their attention. They even have a conflict of interest in the company, as Google has to promote it’s “wink at piracy” stance on content (with it’s “chillingeffects.org takedowns) at the same time try to get googlemusic off the ground as a competitor to Spotify, and thus a competitor to piracy!! What a ridiculous position to be in. Musicians and record labels should RUN to Spotify NOW! Leave youtube for official music videos, fan videos, and bootleg audio…any audio streams (whether fan uploaded or by the record label) of content that’s officially available for purchase (digital or physical) should have the artist suggesting/endorsing their Spotify site as a free alternative…and it will pay you more!
David–why is your official Camper Van stuff sitting on YouTube with no mention of pushing the users over to Spotify? (https://www.youtube.com/watch?v=INnFvMgET1E).
My next post will illustrate a very important idea: Why musicians and labels should embrace Spotify above all others sooner rather than later.
Well Jerome we don’t agree with everything you’ve written, however it is true Spotify as a service is much more artist friendly than YouTube and Spotify pays twice as well per play. This is something more artists should contemplate, we agree.