Music streaming site Spotify now claims to have 10 million users across seven European countries and around 650,000 paying subscribers. These subscribers pay between $8 and $16 a month for different levels of service. The four major record labels along with many independents have a stake in the company, and it is now their third biggest source of digital revenue after iTunes and Amazon.
So they must all be breaking out the champagne then, yes? Not quite. The company isn’t making any money. The sheer volume of the number of streams the millions of Spotify users make are a massive job to administer royalties on to artists and labels, even with some pretty high powered accounting software. Furthermore, the number of people using it hasn’t yet translated to positive cashflow – it’s still chewing through investment capital. Like everything music related on the internet, the music business is yet to figure out how to completely monetise it.
