>>If we cannot successfully earn revenue at a rate that exceeds the operational costs, including royalty expenses, associated with our Service, we will not be able to achieve or sustain profitability.”
This is very thoughtful stuff. And people say MBA are no good. Or team of MBAs.
Record companies might keep them barely alive, or alive enough to leech as much as possible from them. Killing the host might not be smart, unless a new service is created.
They aren't hedge funds and shouldn't be speculating in public companies. Shareholders of record companies want exposure to music labels - not streaming. Very few conglomerates work long term.
If the shareholders want to own a different business they can buy the shares on their own.
> Except that WMG is not a stand-alone music company. It is wholly owned by the investment firm Access Industries. Which is very much in the business of holding long term equity stakes.
If there is a difference to the reader between a speculator and an investor, this is an investor. The justification may be that the investment has made as much as it could make and they wish to put the money to use elsewhere.
The angle in the article is that they are dumping Spotify because they think it's toxic waste or they want to 'toxify' it. But it could just be profit-taking.
> If the shareholders want to own a different business they can buy the shares on their own.
A shareholder of a record company thinks those are in the better position. This advantage is completely negated if you can't get exposure only to the record company.
Your analysis completely ignores larger considerations like a) preventing a streamer from gaining the upper hand over the record companies or, b) ensuring that there is always at least one non-Apple/Google/Amazon streaming company.
This is very thoughtful stuff. And people say MBA are no good. Or team of MBAs.
Record companies might keep them barely alive, or alive enough to leech as much as possible from them. Killing the host might not be smart, unless a new service is created.