toggle

AAPL Stock: 121.3 ( -1.07 )

Printed from http://www.macnn.com

Record labels consider Spotify's revenue model "sustainable"

updated 07:55 pm EST, Thu January 21, 2010

Streaming service shares subscription fees

Spotify has reportedly developed a revenue model that Universal Music Group International considers to be "sustainable," the music label's senior VP Rob Wells told Telegraph. Spotify currently pays royalties per stream in the UK and Spain. In Sweden, Norway, Finland and France, the company shares revenues from money generated by subscriptions and advertising instead of the per-stream system.

The different methods for various territories are necessary due to the limited number of subscribing customers in the UK and Spain. Wells claims Spotify must convert 10 to 12 percent of its user base, in any territory, to generate enough cash to avoid the per-stream royalties. The company has had difficulty in the UK and Spain, as customers have grown accustomed to using the free service.

In all its territories bar two, Spotify pays the labels from a mixture of the money it generates from advertising revenues and subscriptions," Wells said. "That to me equates to a sustainable business model."

Spotify is expected to reach the US sometime in the near future, although it is unclear if the terms will be adapted for the North American market. European subscribers currently pay 10 per month for the ad-free version, while the free version is available only by invite in certain regions.




by MacNN Staff

toggle

Comments

  1. AwesomeDivinity

    Joined: Dec 1969

    0

    heads will roll

    surely the record 'LABELS' will need to be certain that all the T's are dotted and the I's crossed before proceeding... or something like that. D'OHH!

Login Here

Not a member of the MacNN forums? Register now for free.

toggle

Network Headlines

Follow us on Facebook

toggle

Most Popular

Advertisement

Recent Reviews

HP 14-x030nr 14-inch Chromebook

If you're like us, chances are you've come to realize that you need the ability to access the Internet on the go. Also, you've prob ...

15-inch MacBook Pro with Force Touch

Apple's 15-inch Retina MacBook Pro continues to be a popular notebook with professional users and prosumers looking for the ultimate ...

Typo keyboard for iPad

Following numerous legal shenanigans between Typo -- a company founded in part by Ryan Seacrest -- and the clear object of his physica ...

toggle

Most Commented