Streaming services Spotify throwback to the Free Culture - THE WORLD

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Spotify throwback to the Free Culture

After Google is stormed with his music streaming into the net, the previous market leader Spotify launches a free offer. This could prove in the long run the industry as fatal.

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After Google is stormed with his music streaming into the net, the previous market leader Spotify launches a free offer. This could prove in the long run the industry as fatal. By Benedikt Fuest

Bad news for Spotify, the market leader for music that will be played directly from the Internet. Since this week, the Swedish streaming service of new competition from the network giant Google is exposed, which now promises unlimited listening to music for ten euros per month. In response Spotify differs be paid model – which could have dire consequences in the long term

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Here, the activism of Sweden is understandable in view of the new competitors. Google has a huge customer base. Almost every owner of a smartphone or tablet, which runs on Google’s Android system is likely to have a user account with the Internet giant.

Who bought an app in the Play Store Google or watching a movie, he has left his data – including his credit card. For such customers the conclusion of a music subscription is just few clicks away.

as quickly as possible, many users win

Spotify must therefore bring as many people to set up a user account. Here, the free offer for smartphones to help. So far the service of the road is only available to paying members.

Now it is to be financed through advertising a stripped down version. With the zero tariff Spotify can quickly attract new users – and hopes to later accounts paid subscriptions

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This is indeed Spotify drive losses of more than $ 50 million more in height, but have been increasing constantly anyway in the past three years. The vain special offer for computers at home, which also operates the service is, namely, a loss-making business.

risk investors secure the business

But that may not matter for the time being the seller. Spurred on by the promise of future revenues granted him venture investors in late November $ 250 million of fresh money. Overall, the company is now valued at more than four billion dollars.

benefit

From Spotify especially the major music labels, some of which are shareholders in the service. Her huge pop catalogs make the most of the streams, they charge for every new user -. Whether to listen for free or not

The losers will prob-ably be the artists whose works are sold at a loss. Although Spotify argued that they had been paid more than a billion dollars in licensing fees. But bands like Radiohead or Led Zeppelin argue that arrive from every streamed song only 0.6 to 0.8 cents with them. So bring a title which is heard a million times, the band maximum of $ 8,000.

ultimately could hurt the whole music industry but Spotify. Because in the worst case, a new free offer is used to the handset again that music on the Internet is free. That affects sales through platforms such as iTunes and Google Play.

© Axel Springer SE 2013. All rights reserved