Monday, March 26, 2012

Spotify Continues to Grow

We have tracked the rise of music on demand service Spotify not just because of its impact on the music industry but also because we believe that media on demand services are relevant to all publishing sectors and the model makes sense.

Last year Spotify took their service to the US and also tied its service in with Facebook. The results are significant not just in terms of subscribers but in the company’s rise in valuation. When it entered the US market it was valued at $1.1bn today the market is estimating its value at some $4bnoiis seeking to raise money from private investors in a deal that would put a valuation of as much as $4bn. It is put into perspective when you realise that Warner Music was sold for $3.3bn only last year!

The Spotify model is still to win over the traditionalists and the industry remains divided on whether subscription streaming services can overtake outright sales but for an increasing number of consumers the writing is clearly on the wall.

Spotify still faces huge challenges with licensing getting harder and more costly, profit still in the future and an industry that is nervous about the change in models.

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