The music industry still has a stranglehold on digital music.
At least 33 million people have tried Spotify, more than 150 million have registered for Pandora…Both are losing money, and for largely the same reason: the cost of music royalties. Pandora…in its most recently reported quarter lost $20 million on $81 million in revenue. Spotify’s accounts…show that it lost $57 million in 2011, despite a big increase in revenue, to $236 million.
It just seems silly. The music labels are pulling millions from these companies. So, why don’t they negotiate a rate that allows these companies to say in business?