The clock is ticking for Spotify
Summary: It was as recently as September 2007 that Rick Rubin, then co-head of Columbia Records, put forward the idea as a way of combating online music piracy and file-sharing. You'd pay, say, $19.95 a month, and the music will come from anywhere you'd like," he told the New York Times. Spotify then came out over a year later. But Spotify is yet to make a profit, while plans to float the firm on the stock market have reportedly been delayed, raising a big question mark over its business model. Spotify isn't the only streaming platform, others have joined it over the past decade, including Apple Music, Amazon Prime Music and Deezer, as well as high-resolution music services Tidal and Qobuz. The firm originally planned to float this year, but according to the TechCrunch website, this could now be delayed until 2018. Spotify needs to conclude new long-term licensing deals with the big three record companies - Universal, Sony and Warner - to avoid the risk of suddenly losing major chunks of its content. Spotify must pay ever larger sums to its creditors just to settle the interest on its loan, while the amount of money it can raise from its IPO is trimmed by an ever greater amount.
[] Spotify is seen as the leader, with more than 100 million users, 40 million of them paid-up subscribers to its Premium tier.
[] Swedish firm is now a major player in 60 countries, including the world's biggest music market, the US, where streaming accounted for 51% of music consumption last year.
[] magazine also hailed Spotify as "the place fans discover music as well as consume it", pointing to its promoted playlists, including its Discover Weekly service.
[] Spotify currently pays 55% of its revenue to record labels in royalties, with additional money going to music publishers.
[] March last year, the firm raised $1bn from investors at an interest rate of 5% a year, plus a discount of 20% on shares once the initial public offering (IPO) of shares takes place.
My Opinion: Spotify is very popular in terms of how audience stream their music, the idea of streaming your music anywhere you want and however way you want; through computers or phones or even tablets, the accessibility to this streaming service is very much in the favours of a wide audience. In my opinion, I do think that Spotify will make their profit soon enough because many audience wouldn't move on from it as the prices are reasonable, the streaming service has a lots of features on for a wide audience; "Discover Weekly" or theres even an options of radios to listen too. The use of convergence is something that will allow audience to keep loyal to Spotify and help the service to make a profit.
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