In 2010 Swedish music streaming service Spotify was on the rise, with a 151 percent jump in revenue. According to PrivCo, a company that tracks financial data, the bottom almost fell out for Spotify in 2011 and the service’s current model is “unsustainable.”
CNET obtained confirmation from Spotify that numbers reported by PrivCo were correct–but not news. Spotify’s losses since jumping into the U.S. market were first reported in August by the Wall Street Journal.
Regardless of who reported what first, PrivCo’s assessment might sting at Spotify HQ:
Subscription music services face a new scourge on their bottom line: “Windowing.” This vaguely creepy term stands for a practice adopted by some artists in an effort to boost album sales. Musicians such as Adele and Coldplay withhold new albums from the likes of Spotify for a period of time after release, just as there is about a month’s delay between the release of a new film and that film becoming available on Netflix. Spotify in particular hates the practice, and Spotify’s chief content officer Ken Parks told Fast Company so in no uncertain terms:
Sometimes there is an advantage in being the little guy. Google and Apple have been unable to come to terms with the major labels in their efforts to build a digital “locker” that streams music from the cloud, in large part because the labels are wary of these tech giants leverage as Read More