[wmf]

That's the real problem: Spotify seems to be anchoring prices at an unsustainably low level. Netflix streaming is trying to do the same to video, but Hollywood is resisting.

(Although some are claiming that Spotify's pricing is similar to the amount that the average person used to spend on CDs, so why are labels getting less from Spotify than they did from CDs/iTunes?)

[exDM69]

Spotify has paid for the catalogs of the major record labels by giving out a lot of their stock. AFAIK, there never was a whole lot of cash involved.

From the record labels' point of view, Spotify is excellent. Artists tend to have contracts where their paycheck is related to the number of records sold and times their songs are played in the radio. Some countries even have laws to protect the artists in this. However, there is no mention of online streaming, so artists don't really have to be compensated for that.

When you pay for or listen to ads in Spotify, you're mostly giving the money to the record labels and pretty much nothing to the artist. That money is going to spent for lobbying for laws that will life-support the deprecated business model of the record companies. Of course this is a bit exaggerated but in my eyes paying for Spotify is kinda like supporting SOPA.

[JoshTriplett]

> Netflix streaming is trying to do the same to video

Think about the prices for a moment. Suppose you pay $7.99 per month for streaming. According to some recent estimates (http://blog.nielsen.com/nielsenwire/online_mobile/january-20...), the average Netflix customer watches 11 hours of streaming video per month. That means about $0.73 per hour of video watched. Seems relatively reasonable. Even for users who watch several times that many hours, it still seems reasonable.

[bgarbiak]

Although some are claiming that Spotify's pricing is similar to the amount that the average person used to spend on CDs, so why are labels getting less from Spotify than they did from CDs/iTunes

I'm guessing one of the reasons is that iTunes is simply more popular right now, plus it's different demographics and so on.

Spotify's great promise to labels is that once it will become ubiquitous (see: Facebook integration) they (labels) will get money from more people than ever, kids that grow up getting used to free music (YouTube, torrents, etc.) included. There's even a slim chance it will change some habits of these people (for example: convince them to pay some). Who knows, I spend more on music now than before I became a subscriber so maybe there is some ground to that pledge.

One thing that amazes me though is the ability to download an album (= make a playlist out of it and turn "available off-line" option on) in Spotify's mobile apps. Thought labels will strongly oppose that - it nullifies a potential need to buy music completely. Even though I love this feature I sometimes feel it's too much (considering how little artists get from that).

[technoslut]

Spotify and Netflix are very different. The vast majority of Spotify users do not opt for the premium service. If most or all did pay it really wouldn't be an issue. It would even be considered a blessing for the music industry.

With Netflix, you have to pay to access the content.

[Tichy]

You don't really own songs you buy on iTunes, either. Try reselling them...

[ugh]

Your definition of ownership is outdated. (I’m also not sure what you are responding to.)

[Tichy]

Weird, my comment really seems to be attached to the wrong parent. Sorry about that.

If you mean my definition is outdated, you mean that there is no such thing as ownership in the future anymore? Ownership is outdated?

[ugh]

With the music I buy in the iTMS I can do most of the things I can do with a CD I buy in a store somewhere. Some things I can’t do. That’s all. It’s not dramatic.

[jarek]

So you don't really own songs you buy on iTunes the same way you own CDs.

[ugh]

So then you don’t.

Does it matter, though? I don’t think so. It’s pretty clear what you can and cannot do as compared to CDs. It’s a non-issue.