Despite millions of users, Pandora and Spotify are still losing money

The music industry still has a stranglehold on digital music.

Pandora and Spotify Rake in the Money and Then Send It Off in Royalties

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?

 

 

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