

Spotify Needs Big Funding To Pay Big Content’s Tax On Success - aweSummer
http://techcrunch.com/2012/03/23/spotify-funding/

======
_delirium
I'm not greatly sympathetic to the major labels' policies, but I don't see how
the "tax" angle makes sense here, even as a metaphor. You can describe
something like the patent system as imposing a "tax" on innovation because it
in effect adds across-the-board costs to everyone.

But here the fee is only being imposed in cases where you actually want to
license someone's product! Could I really complain about the "publishers' tax"
on my audiobook business, because I can't produce audiobooks of Stephen King
without paying him (or his publisher) a fee? And of course they vary the fee
based on what they think they can get out of each client; that's standard
business practice, which is why many enterprise SaaS providers have a "call
for prices" sort of thing if they think you're rich enough.

~~~
sp332
I think "tax" is being used just for the negative connotation. The studios and
labels are jerking their customers around by proxy. "Sure, you can stream this
movie from Netflix for $9/mo... unless it gets popular, then we're going to
pull it." and "Sure, you can listen to this for free-ish on Spotify, unless
that gets popular, in which case we'll drive them out of business and leave
your personal library and social network unusable."

~~~
philip1209
I think their attitude is, "Now that you're making money, we want more of it,
and if you say no then we ruin your business completely."

~~~
dromidas
I think thats what we define as a monopoly. Time to redefine what can be
targeted by anti-trust lawsuits.

------
fraserharris
You could look at it another way: the content owners gave a distributor a
break in fees until they found a profitable business model. Then the price
break was removed, because _most_ of the value is in the content, not the
distribution.

------
cageface
More and more of the music I care about is now on bandcamp or soundcloud
already. It may take a generation but the middlemen are on the way out.

~~~
tomjen3
Not even close. Most people like mass marketed music (basically whatever they
hear on the radio).

~~~
randomdata
I feel that people like to share in the experience of listening to music.
Often this happens at live venues, but radio also works well because it still
feels like you are listening with others. Playing a CD of some obscure band
nobody has ever heard of, not so much.

If those music services can crack the social experience of music, they stand a
pretty good chance.

------
j2labs
Record labels are determined to teach us piracy is the way to acquire music.
Fools...

~~~
cabalamat
Related: [http://edinburgh.pirateparty.org.uk/2012/03/22/a-free-
clue-t...](http://edinburgh.pirateparty.org.uk/2012/03/22/a-free-clue-to-the-
record-industry/)

------
jiggy2011
I think spotify needs to develop their own artists somehow, that is the only
way I can see this working in the long term.

Having said that , I don't really like the idea of having "spotify exclusive"
music especially since that would essentially force people into using facebook
just to hear a track.

Another option would be for artists to sell content directly to services such
as spotify on a per play or per month basis.

~~~
fbuilesv
This is what Netflix has started to do with some movies/series (e.g. Arrested
Development). The problem with this model is that it doesn't scale, even if
you could make a deal with a handful of the top grossing artists you'd still
need to talk with WMG to license the rest of the artists.

More and more I think we need to reinvent the way that big music companies
work. Some independent labels are doing just fine without treating their users
like crap so at we know it's a viable business decision.

~~~
jiggy2011
What I mean is actually develop the artists from scratch in the same way the
record companies do currently.

------
tomjen3
Meanwhile grooveshark pays nothing, has a wider selection and charges less.

Are the labels trying to get others to kick the legit companies out of
business?

~~~
res0nat0r
Grooveshark is far from legit.

~~~
tomjen3
And?vthey are still winning.

------
veyron
Why wouldn't they sign a long-term agreement with the content providers?

~~~
alexknowshtml
Look at it from the other angle: why would the content providers sign a long-
term agreement with Spotify?

