Music services are still a bad idea: Spotify Edition

Read an article this weekend about Spotify in Wired.  It now has 10 million subscribers paying $10 a month.  Because they have to pay 70% of each track’s revenue back to the labels, that doesn’t leave much margin left.  Thus, they are still plowing through cash. They’ve spent over $200 million dollars to date.  In 2011 reported a loss of 59 million (24% of revenue 245mm) and 2012 had loss of $72 million (13% of 558mm).

I’ve always thought that the music industry is f’ed and if you’re the number 1 streaming provider and you’re not doing well, something’s wrong. 

Related content: You’ll never make money with a music service