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After announcing increased prices, Spotify to Pay Songwriters About $150 Million Less Next Year (www.billboard.com)

submitted 7 months ago by fpslem@lemmy.world to c/technology@lemmy.world

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When Bloomberg reported that Spotify would be upping the cost of its premium subscription from $9.99 to $10.99, and including 15 hours of audiobooks per month in the U.S., the change sounded like a win for songwriters and publishers. Higher subscription prices typically equate to a bump in U.S. mechanical royalties — but not this time.

By adding audiobooks into Spotify’s premium tier, the streaming service now claims it qualifies to pay a discounted “bundle” rate to songwriters for premium streams, given Spotify now has to pay licensing for both books and music from the same price tag — which will only be a dollar higher than when music was the only premium offering. Additionally, Spotify will reclassify its duo and family subscription plans as bundles as well.

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[–] BURN@lemmy.world 16 points 7 months ago (2 children)

Spotify negotiated shit deals when they were a startup and they’ll basically forever be not profitable because of it.

[–] KillingTimeItself@lemmy.dbzer0.com 5 points 7 months ago (1 children)

they should've became a publisher, or started one on the side, the profit would be immense if they thought of doing that.

[–] BURN@lemmy.world 2 points 7 months ago (1 children)

Seriously. They had a completely open market, then essentially signed a perpetual deal where something like 40% of gross income is paid out to the labels. It’s absolutely insane how poorly run they were in the beginning.

If they had become a publisher, distributor and/or a label, they’d be on top of the world now.

[–] KillingTimeItself@lemmy.dbzer0.com 2 points 7 months ago

yeah pretty much. They'd be the single biggest publisher globally, and almost certainly the most profitable.

[–] Grandwolf319@sh.itjust.works 2 points 7 months ago

Their strategy was probably the classic startup strategy. Grow at all costs and figure out profitability later. These days it’s rather obvious that this strategy sucks and is doomed to fail (for most cases).