News Section Logo NEWS - Return to news section


Legal Music Streaming's Biggest Threat: Rights Holders?

Posted by: , 16:10 AEST, Sat August 2, 2014

Permanent Link     Add Comments
submit to reddit
Music industry's thirst for more royalties could kill off services like Spotify and Pandora
News story feature image
Image/Photo Credit: Johan Larsson @ Flickr, CC

Copyright holders that are demanding more and more in licensing fees could endanger the viability of legal streaming options like Spotify and Pandora. That's the conclusion drawn from an article published by tech website Techdirt.

While streaming revenue is becoming ever more important for the music industry, the companies that pioneered music streaming, Spotify and Pandora for examples, are finding profitability a difficult prospect. The problem comes from royalty and licensing payments that record companies are demanding, and even knowing the difficulties faced by Spotify and Pandora, copyright holders are still demanding more.

This is all despite royalty costs being a huge chunk of both company's revenue, 50% for Pandora, and a massive 75% for Spotify.

It is this demand for even more royalty payments that, Techdirt says, could endanger the future of services like Spotify and Pandora.

Techdirt's Mike Masnick believes this is due to the industry overvaluing content over the services that deliver the content. Whereas in the past, the music industry had control over both content and delivery, new tech players like Spotify have squeezed into this pace thanks to the industry's reluctance to embrace the Internet. This, Techdirt believes, is the battle being fought right now in the streaming scene, and a battle that may kill off some of the services we've now know and love, to the detriment of consumers and the music industry alike.

"They consistently kill the golden goose because they hate the idea of any outsider having success, even as they fail to innovate," writes Masnick.


Related News:

News Icon Piracy Won't Kill Entertainment Industry

posted by: Sean F, 21:47 AEST, Fri October 4, 2013

News Icon MPAA's Lawyer Answers Questions On SOPA, Google and isoHunt

posted by: Sean F, 10:14 AEDT, Thu January 9, 2014

News Icon Spotify Attacks Copyright Lobby's Claims

posted by: Sean F, 18:08 AEST, Sat May 31, 2014

News Icon Moby: Music Industry Shortsighted Over Piracy Approach

posted by: Sean F, 20:44 AEDT, Sat November 30, 2013

News Icon UK Record Labels Want Voluntarily Action on Piracy, Including Three-Strikes Database

posted by: Sean F, 20:38 AEST, Fri September 6, 2013