Remember how we’ve been told for years that Spotify is the solution to the record industry’s problems? Remember how we’ve been told that Spotify is the solution to piracy? Remember the stories of how “sales are growing” in Sweden and Norway?
Well guess what? According to Digital Music News (reported by IFPI) overall sales in Sweden and Norway are actually down for 2014.
Hmmmm… Click the links below…
We’ve said it before, and we’re willing (and happy to be wrong) that streaming economics, specifically of the Spotify variety are unsustainable. That doesn’t mean the economics can’t be changed, or that streaming doesn’t work and can not work – it just means that the predictions about growing revenue via Spotify are wrong.
We’ve questioned the philosophy and math behind streaming for a while now and it appears some of our criticisms and concerns are coming true. For example we noted that the Spotify per stream rates are dropping as more users are added to the service.
If overall revenue continue to decline, especially in the most promoted and championed markets in the world, what does that say for the rest of the world?
We previously reported that the per stream rates are dropping as the service add more users (graph below). This new data suggests that not only is the per stream rate dropping, but in two the leading countries in the world overall revenues are also down.
It’s just math.
One of the founders of file-sharing website Pirate Bay has been arrested in southern Sweden to serve an outstanding sentence for copyright violations after being on the run for nearly two years, Swedish police have said.
READ THE FULL STORY AT THE GUARDIAN UK:
The origin of the outrage is telling: Sweden is widely regarded as a model country for streaming and access, thanks to massive adoption and recovering recording revenues. The threatened suits suggest that not everyone is celebrating or, more importantly, enjoying the early spoils.
Regardless of the locale, the issue comes ahead of very difficult juncture for Spotify. Mega-artists like Thom Yorke continue to raise uncomfortable questions about paltry payouts, but more perilous questions are dangling on the financial side. Recent financial figures show an unsustainable level of cash burn at Spotify, and potentially serious problems attracting more capital as a result. And after burning through hundreds of millions of dollars, Spotify is getting dangerously close to depleting its funding tranche.
READ THE FULL STORY AT DIGITAL MUSIC NEWS: