Spotify wants to remain a free online audio streaming platform, but they also want a larger piece of the profit they earn for so many artists and record labels.
As of right now, they are trying to cut a deal with three of the biggest record labels in the world (Sony, Universal, Warner Music) to get them to lengthen their contracts with Spotify and cut costs for using their artists as well.
Spotify doesn’t take in anywhere near as much money as they make for their rights holders and labels. 70% of their revenue is directed towards licensing fees, 20% to customer acquisition and the remaining 10% to leftover company costs.
What this means is that unless an agreement is reached, we’re probably either going to have to pay for Spotify or hear even more of those annoying-ass ads.
With all the money Spotify makes for these three labels already, it would be more than fair for them to let Spotify keep at least a little more of their overall profits.
We know we sure as hell wouldn’t want to pay to use Spotify and those ads (which have definitely increased as of late) are already making us want to abandon the platform altogether.
Sean Levinson | Elite.