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	<title>Comments on: Why Spotify can never be profitable: The secret demands of record labels</title>
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	<link>http://gigaom.com/2011/12/11/why-spotify-can-never-be-profitable-the-secret-demands-of-record-labels/</link>
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		<title>By: KMG</title>
		<link>http://gigaom.com/2011/12/11/why-spotify-can-never-be-profitable-the-secret-demands-of-record-labels/#comment-802917</link>
		<dc:creator><![CDATA[KMG]]></dc:creator>
		<pubDate>Sun, 29 Jan 2012 21:52:08 +0000</pubDate>
		<guid isPermaLink="false">http://gigaom.com/?p=452828#comment-802917</guid>
		<description><![CDATA[The Music Industry and the Law should continue to target Companies the likes of Megaupload, Rapidshare, fileshare that have been built on providing services for &quot;Uploaders&quot; who generate cash from Advertising placed next to the uploaded links, some of these Companies even pay on a &quot;per download&quot; basis and the down-loader is often not even aware they&#039;ve helped generate revenue for people that have nothing to do with the creation or release of the music. It&#039;s not a &quot;loophole&quot; it just hasn&#039;t fully &quot;Outed&quot; yet, what they are doing is still illegal and they know it What they are doing doesn&#039;t just hurt the Corps but also the Independents, and they know it!

Friends sharing a tune over the internet? This May be also &quot;illegal&quot; but no different than &quot;making a tape&quot; from music us 30 and 40 years olds purchased as kids and passing it on to friends. This actually helps the industry and helps people discover Artists and tracks via the &quot;word of mouth&quot; model and ultimately encourages people to purchase music, merchandise and go to concerts! People currently tune in to listen to tracks on YouTube, some go on a buy, some go on and download illegally from the sites that need shutting down as mentioned above, so again let&#039;s target those sites and dodgy &quot;Uploaders&quot; for Copyright infringement NOT the end users!

Spotify, Rara and the other bunch of new model army, self proclaimed saviour&#039;s of the Music industry seem nothing more than an attempt at a legal version of the above illegal business model but cut out the dodgy Uploader that used to get a share of the Ad revenue. Yes, they have sort legal consent off the MAJOR-ity with HUGE ADVANCES paid to the MAJOR LABELS but certainly have not cleared all of the Copyright from Owners as mentioned in section &quot;6&quot; of above article so mostly publishers and in some cases owners of Sound Recordings that have been licensed to 3rd parties without written consent for this kind of commercial exploitation but will and have already found their way on to these streaming networks.

This new business model for the music industry is unlikely to solve the problem of generating revenue for Independent Artists and Musicians JUST REPLACE IT WITH A NEW ONE.
Neither will it solve the long term revenue issues for Major Labels. These models will not attract the so called &quot;illegal&quot; downloaders and people who share files &quot;illegally&quot; with friends for free as claimed by Spotify but most probablly attract a huge percentage of the CURRENT MARKET OF EXISTING BUYERS WHO LEGALLY PURCHASE DIGITAL MUSIC. Why? because initially it seems like a legal &quot;Too good to be true&quot; offer. The bigger picture is the streaming services WILL REVERSE THE CURRENT TREND OF GROWING DIGITAL SALES, further more streaming services such as Spotify and Rara will not benefit from the amazing INDEPENDENT MUSIC that get&#039;s released from day to day because Independent Artists and Labels will remove their content from these services once they see they are getting no meaningful share of revenue.

Our Company is an Independent Music Company that Publishes lots of Music and has released lots of recordings. We have never knowingly granted rights to any third party to exploit our music via the Streaming business model. 

Digital shops selling music ,yes. 
Digital shops selling music and providing services for storage from purchased Tracks or Albums, yes.

A massive free for all, too good to be true business model where Artists and label share a monthly subscription per user of £10 minus the streaming companies costs and cut, No thanks!]]></description>
		<content:encoded><![CDATA[<p>The Music Industry and the Law should continue to target Companies the likes of Megaupload, Rapidshare, fileshare that have been built on providing services for &#8220;Uploaders&#8221; who generate cash from Advertising placed next to the uploaded links, some of these Companies even pay on a &#8220;per download&#8221; basis and the down-loader is often not even aware they&#8217;ve helped generate revenue for people that have nothing to do with the creation or release of the music. It&#8217;s not a &#8220;loophole&#8221; it just hasn&#8217;t fully &#8220;Outed&#8221; yet, what they are doing is still illegal and they know it What they are doing doesn&#8217;t just hurt the Corps but also the Independents, and they know it!</p>
<p>Friends sharing a tune over the internet? This May be also &#8220;illegal&#8221; but no different than &#8220;making a tape&#8221; from music us 30 and 40 years olds purchased as kids and passing it on to friends. This actually helps the industry and helps people discover Artists and tracks via the &#8220;word of mouth&#8221; model and ultimately encourages people to purchase music, merchandise and go to concerts! People currently tune in to listen to tracks on YouTube, some go on a buy, some go on and download illegally from the sites that need shutting down as mentioned above, so again let&#8217;s target those sites and dodgy &#8220;Uploaders&#8221; for Copyright infringement NOT the end users!</p>
<p>Spotify, Rara and the other bunch of new model army, self proclaimed saviour&#8217;s of the Music industry seem nothing more than an attempt at a legal version of the above illegal business model but cut out the dodgy Uploader that used to get a share of the Ad revenue. Yes, they have sort legal consent off the MAJOR-ity with HUGE ADVANCES paid to the MAJOR LABELS but certainly have not cleared all of the Copyright from Owners as mentioned in section &#8220;6&#8243; of above article so mostly publishers and in some cases owners of Sound Recordings that have been licensed to 3rd parties without written consent for this kind of commercial exploitation but will and have already found their way on to these streaming networks.</p>
<p>This new business model for the music industry is unlikely to solve the problem of generating revenue for Independent Artists and Musicians JUST REPLACE IT WITH A NEW ONE.<br />
Neither will it solve the long term revenue issues for Major Labels. These models will not attract the so called &#8220;illegal&#8221; downloaders and people who share files &#8220;illegally&#8221; with friends for free as claimed by Spotify but most probablly attract a huge percentage of the CURRENT MARKET OF EXISTING BUYERS WHO LEGALLY PURCHASE DIGITAL MUSIC. Why? because initially it seems like a legal &#8220;Too good to be true&#8221; offer. The bigger picture is the streaming services WILL REVERSE THE CURRENT TREND OF GROWING DIGITAL SALES, further more streaming services such as Spotify and Rara will not benefit from the amazing INDEPENDENT MUSIC that get&#8217;s released from day to day because Independent Artists and Labels will remove their content from these services once they see they are getting no meaningful share of revenue.</p>
<p>Our Company is an Independent Music Company that Publishes lots of Music and has released lots of recordings. We have never knowingly granted rights to any third party to exploit our music via the Streaming business model. </p>
<p>Digital shops selling music ,yes.<br />
Digital shops selling music and providing services for storage from purchased Tracks or Albums, yes.</p>
<p>A massive free for all, too good to be true business model where Artists and label share a monthly subscription per user of £10 minus the streaming companies costs and cut, No thanks!</p>
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		<title>By: sigs</title>
		<link>http://gigaom.com/2011/12/11/why-spotify-can-never-be-profitable-the-secret-demands-of-record-labels/#comment-799434</link>
		<dc:creator><![CDATA[sigs]]></dc:creator>
		<pubDate>Sat, 21 Jan 2012 11:20:32 +0000</pubDate>
		<guid isPermaLink="false">http://gigaom.com/?p=452828#comment-799434</guid>
		<description><![CDATA[The intellectual dishonesty or probably just plain cluelessness of the &quot;music professionals&quot; never ceases to amaze a poor engineer soul like me.

&quot;Excusing pirates is like excusing someone who steals hotdogs&quot;: no it isn&#039;t, see http://mybroadband.co.za/photos/data/500/piracy1.png

&quot;because they also make some purchases&quot; which is the same as they&#039;re your CUSTOMERS. I&#039;m not. The little music I&#039;ve ever pirated hasn&#039;t prevented me from buying a single CD. Actually, I&#039;ve never in my life even considered buying a CD, I don&#039;t need them. They&#039;re not food, people CAN live without them. The people you want your government to mob and imprison are your customers.

Your analogy was also completely off; downloading music and then buying it afterwards it like &quot;stealing&quot; hotdogs and returning to pay for them. Guilty! say MPAA and &quot;music professionals&quot;. Down with the internets, down with information society, down with progress of technology! Shame on you.]]></description>
		<content:encoded><![CDATA[<p>The intellectual dishonesty or probably just plain cluelessness of the &#8220;music professionals&#8221; never ceases to amaze a poor engineer soul like me.</p>
<p>&#8220;Excusing pirates is like excusing someone who steals hotdogs&#8221;: no it isn&#8217;t, see <a href="http://mybroadband.co.za/photos/data/500/piracy1.png" rel="nofollow">http://mybroadband.co.za/photos/data/500/piracy1.png</a></p>
<p>&#8220;because they also make some purchases&#8221; which is the same as they&#8217;re your CUSTOMERS. I&#8217;m not. The little music I&#8217;ve ever pirated hasn&#8217;t prevented me from buying a single CD. Actually, I&#8217;ve never in my life even considered buying a CD, I don&#8217;t need them. They&#8217;re not food, people CAN live without them. The people you want your government to mob and imprison are your customers.</p>
<p>Your analogy was also completely off; downloading music and then buying it afterwards it like &#8220;stealing&#8221; hotdogs and returning to pay for them. Guilty! say MPAA and &#8220;music professionals&#8221;. Down with the internets, down with information society, down with progress of technology! Shame on you.</p>
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		<title>By: Vinson</title>
		<link>http://gigaom.com/2011/12/11/why-spotify-can-never-be-profitable-the-secret-demands-of-record-labels/#comment-795818</link>
		<dc:creator><![CDATA[Vinson]]></dc:creator>
		<pubDate>Sat, 14 Jan 2012 04:14:51 +0000</pubDate>
		<guid isPermaLink="false">http://gigaom.com/?p=452828#comment-795818</guid>
		<description><![CDATA[Mike, why do you think terrestrial radio is still a robust market ($17B in USA)? It&#039;s because the performers of each song aren&#039;t paid! Anybody on this thread realize that Aretha Franklin hasn&#039;t made a dime on her hit, &quot;Respect&quot;? That&#039;s right, except for the amount she was paid by her label for the day she spent recording it, she hasn&#039;t been paid a dime. The composer and publisher? Yes. The performers? NO! America, Iran &amp; North Korea are the only countries that don&#039;t pay performers a fee everytime their song is played on the radio. It&#039;s been a massive rip-off since the beginning of the radio industry and it&#039;s a high crime!

Back in 2009, John Conyers sponsored a bill to rectify this egregious crime and the terrestrial radio industry squashed it. THAT&#039;S why radio-land still makes a ton of money.

If you care about this issue, like every musician and music lover should, you can read up on it more here:

http://en.wikipedia.org/wiki/Performance_Rights_Act

Then tell your representative to sponsor a bill rectifying this crime!]]></description>
		<content:encoded><![CDATA[<p>Mike, why do you think terrestrial radio is still a robust market ($17B in USA)? It&#8217;s because the performers of each song aren&#8217;t paid! Anybody on this thread realize that Aretha Franklin hasn&#8217;t made a dime on her hit, &#8220;Respect&#8221;? That&#8217;s right, except for the amount she was paid by her label for the day she spent recording it, she hasn&#8217;t been paid a dime. The composer and publisher? Yes. The performers? NO! America, Iran &amp; North Korea are the only countries that don&#8217;t pay performers a fee everytime their song is played on the radio. It&#8217;s been a massive rip-off since the beginning of the radio industry and it&#8217;s a high crime!</p>
<p>Back in 2009, John Conyers sponsored a bill to rectify this egregious crime and the terrestrial radio industry squashed it. THAT&#8217;S why radio-land still makes a ton of money.</p>
<p>If you care about this issue, like every musician and music lover should, you can read up on it more here:</p>
<p><a href="http://en.wikipedia.org/wiki/Performance_Rights_Act" rel="nofollow">http://en.wikipedia.org/wiki/Performance_Rights_Act</a></p>
<p>Then tell your representative to sponsor a bill rectifying this crime!</p>
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		<title>By: Thomas Weilby Knudsen</title>
		<link>http://gigaom.com/2011/12/11/why-spotify-can-never-be-profitable-the-secret-demands-of-record-labels/#comment-795301</link>
		<dc:creator><![CDATA[Thomas Weilby Knudsen]]></dc:creator>
		<pubDate>Fri, 13 Jan 2012 07:21:51 +0000</pubDate>
		<guid isPermaLink="false">http://gigaom.com/?p=452828#comment-795301</guid>
		<description><![CDATA[The analysis in the article is interesting, but lack a very important component: The balance of negotiating power. Once the online music services have millions of monthly subscriptions, the power balance changes. The labels cannot just increase prices (even though they may contractually have the option), since they are messing with their most important and only growing source of revenue, whereas their alternative (legacy) revenue sources are shrinking. So the threat os halting supply is theoretical, and artists would never accept it - established artists may even cut out the middleman and enter into an agreement with the music service directly. Consequently I believe that the analysis is correct, but the conclusion simplistic.]]></description>
		<content:encoded><![CDATA[<p>The analysis in the article is interesting, but lack a very important component: The balance of negotiating power. Once the online music services have millions of monthly subscriptions, the power balance changes. The labels cannot just increase prices (even though they may contractually have the option), since they are messing with their most important and only growing source of revenue, whereas their alternative (legacy) revenue sources are shrinking. So the threat os halting supply is theoretical, and artists would never accept it &#8211; established artists may even cut out the middleman and enter into an agreement with the music service directly. Consequently I believe that the analysis is correct, but the conclusion simplistic.</p>
]]></content:encoded>
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		<title>By: rtpHarry</title>
		<link>http://gigaom.com/2011/12/11/why-spotify-can-never-be-profitable-the-secret-demands-of-record-labels/#comment-791421</link>
		<dc:creator><![CDATA[rtpHarry]]></dc:creator>
		<pubDate>Thu, 05 Jan 2012 14:30:29 +0000</pubDate>
		<guid isPermaLink="false">http://gigaom.com/?p=452828#comment-791421</guid>
		<description><![CDATA[I dont care who pockets the money, I just want access to the music. The sheer amount of music out there means that the way the world works means that even if I spent every penny I earned on music I would be able to hear about 0.1% of it.

If the labels want to run a spotify service then they get 100% of the revenue which is fine by me. 

Just stop putting us all in a situation where we cannot access the music.]]></description>
		<content:encoded><![CDATA[<p>I dont care who pockets the money, I just want access to the music. The sheer amount of music out there means that the way the world works means that even if I spent every penny I earned on music I would be able to hear about 0.1% of it.</p>
<p>If the labels want to run a spotify service then they get 100% of the revenue which is fine by me. </p>
<p>Just stop putting us all in a situation where we cannot access the music.</p>
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		<title>By: Kate Morrigan</title>
		<link>http://gigaom.com/2011/12/11/why-spotify-can-never-be-profitable-the-secret-demands-of-record-labels/#comment-788469</link>
		<dc:creator><![CDATA[Kate Morrigan]]></dc:creator>
		<pubDate>Sun, 01 Jan 2012 15:26:21 +0000</pubDate>
		<guid isPermaLink="false">http://gigaom.com/?p=452828#comment-788469</guid>
		<description><![CDATA[That sounds awesome, can we do that now please?]]></description>
		<content:encoded><![CDATA[<p>That sounds awesome, can we do that now please?</p>
]]></content:encoded>
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		<title>By: Eric</title>
		<link>http://gigaom.com/2011/12/11/why-spotify-can-never-be-profitable-the-secret-demands-of-record-labels/#comment-787689</link>
		<dc:creator><![CDATA[Eric]]></dc:creator>
		<pubDate>Sat, 31 Dec 2011 06:46:50 +0000</pubDate>
		<guid isPermaLink="false">http://gigaom.com/?p=452828#comment-787689</guid>
		<description><![CDATA[There are a few (three?) major record labels. Somehow they all have the same pricing structure, licencing terms and never compete with each other. How is this not price fixing?]]></description>
		<content:encoded><![CDATA[<p>There are a few (three?) major record labels. Somehow they all have the same pricing structure, licencing terms and never compete with each other. How is this not price fixing?</p>
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		<title>By: enjaysee</title>
		<link>http://gigaom.com/2011/12/11/why-spotify-can-never-be-profitable-the-secret-demands-of-record-labels/#comment-781425</link>
		<dc:creator><![CDATA[enjaysee]]></dc:creator>
		<pubDate>Fri, 23 Dec 2011 00:26:35 +0000</pubDate>
		<guid isPermaLink="false">http://gigaom.com/?p=452828#comment-781425</guid>
		<description><![CDATA[Not entirely accurate. A better analogy would be suppliers also require consumers to only consume the hotdogs in places they specify. Consumers annoyed at these restrictions find a way to duplicate the hotdogs (not steal them) for next to nothing. 

First the suppliers try to sue anyone they see eating a hotdog for 5000% of the cost of the hotdog. When this strategy fails as it costs them more to engage the lawyers than the money they receive from suing consumers, the supplier then lobbies the government to step in and introduce laws that allow them to shut down any form of hot dog consumption anywhere in the world due to the threat of &#039;counterfeit&#039; foreign hotdogs.]]></description>
		<content:encoded><![CDATA[<p>Not entirely accurate. A better analogy would be suppliers also require consumers to only consume the hotdogs in places they specify. Consumers annoyed at these restrictions find a way to duplicate the hotdogs (not steal them) for next to nothing. </p>
<p>First the suppliers try to sue anyone they see eating a hotdog for 5000% of the cost of the hotdog. When this strategy fails as it costs them more to engage the lawyers than the money they receive from suing consumers, the supplier then lobbies the government to step in and introduce laws that allow them to shut down any form of hot dog consumption anywhere in the world due to the threat of &#8216;counterfeit&#8217; foreign hotdogs.</p>
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		<title>By: Christina G</title>
		<link>http://gigaom.com/2011/12/11/why-spotify-can-never-be-profitable-the-secret-demands-of-record-labels/#comment-780464</link>
		<dc:creator><![CDATA[Christina G]]></dc:creator>
		<pubDate>Wed, 21 Dec 2011 15:09:49 +0000</pubDate>
		<guid isPermaLink="false">http://gigaom.com/?p=452828#comment-780464</guid>
		<description><![CDATA[Technology has developed rapidly, but the fact that the sale of music needs to be remodeled and repriced has been dragging on for so many years now - record companies demanding their old cut (which was never fair in the first place) is halting progression into something better. Now they&#039;ve mucked up the face of the entire industry by meddling in privacy issues and the rights of every individual on the planet - and wasted billions of dollars that they so greedily coveted in the first place. Let&#039;s be honest - if music wasn&#039;t, in general, so grossly overpriced, the average downloader wouldn&#039;t feel the need to pirate. These aren&#039;t criminals and thieves with a &quot;fuck you&quot; attitude - it&#039;s people who honestly found something as simple as a song has been deemed too valuable for them to afford.]]></description>
		<content:encoded><![CDATA[<p>Technology has developed rapidly, but the fact that the sale of music needs to be remodeled and repriced has been dragging on for so many years now &#8211; record companies demanding their old cut (which was never fair in the first place) is halting progression into something better. Now they&#8217;ve mucked up the face of the entire industry by meddling in privacy issues and the rights of every individual on the planet &#8211; and wasted billions of dollars that they so greedily coveted in the first place. Let&#8217;s be honest &#8211; if music wasn&#8217;t, in general, so grossly overpriced, the average downloader wouldn&#8217;t feel the need to pirate. These aren&#8217;t criminals and thieves with a &#8220;fuck you&#8221; attitude &#8211; it&#8217;s people who honestly found something as simple as a song has been deemed too valuable for them to afford.</p>
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		<title>By: Music_Professional</title>
		<link>http://gigaom.com/2011/12/11/why-spotify-can-never-be-profitable-the-secret-demands-of-record-labels/#comment-779762</link>
		<dc:creator><![CDATA[Music_Professional]]></dc:creator>
		<pubDate>Tue, 20 Dec 2011 17:39:39 +0000</pubDate>
		<guid isPermaLink="false">http://gigaom.com/?p=452828#comment-779762</guid>
		<description><![CDATA[Regardless of how much people who pirate music also purchase music legally, it does not change the fact that piracy is theft. If the theft is of a tangible object, it is condemned, and yet for some reason consumers feel no guilt about stealing intellectual property such as music or film. Excusing pirates of their crime because they also made some purchases legally is like excusing a consumer from stealing 500 hotdogs because he happened to pay for 30 recently. 

It is true that digital streaming services such Spotify are one of the most likely ways to rescue the music industry from extinction by piracy, so the record companies really ought to learn to play nice. Unfortunately piracy has created such a financial burden on these companies that they must make desperate, one sided deals to keep from going bankrupt. In an ideal world, digital music services would pay artists directly, and artist would then pay a retainer to their record companies for the promotion and support provided to the artist. Such an arrangement would require record companies to make money for the artists in order to be profitable (which isn&#039;t so true of today&#039;s model), but would require a complete overhaul of the structure of the recording industry.]]></description>
		<content:encoded><![CDATA[<p>Regardless of how much people who pirate music also purchase music legally, it does not change the fact that piracy is theft. If the theft is of a tangible object, it is condemned, and yet for some reason consumers feel no guilt about stealing intellectual property such as music or film. Excusing pirates of their crime because they also made some purchases legally is like excusing a consumer from stealing 500 hotdogs because he happened to pay for 30 recently. </p>
<p>It is true that digital streaming services such Spotify are one of the most likely ways to rescue the music industry from extinction by piracy, so the record companies really ought to learn to play nice. Unfortunately piracy has created such a financial burden on these companies that they must make desperate, one sided deals to keep from going bankrupt. In an ideal world, digital music services would pay artists directly, and artist would then pay a retainer to their record companies for the promotion and support provided to the artist. Such an arrangement would require record companies to make money for the artists in order to be profitable (which isn&#8217;t so true of today&#8217;s model), but would require a complete overhaul of the structure of the recording industry.</p>
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