Spotify needs to profit from a music revolution

tech.hindustantimes.com:

Music matters to the wider economy. It was one of the first industries to be disrupted by the internet, and the first to repackage itself as all-you-can-eat rather than all-you-can-steal. The status quo has been the norm for a while: Napster was wound down two decades ago, its nemesis Metallica embraced streaming platforms more than a decade ago, and Spotify Technology SA's subscription prices have stayed around $9.99 for years.

It's time to think about the potential for radical change. For one thing, if this is the endgame for music, it would be a sad state of affairs. The streaming economy is crushingly unequal. It's great for consumers and for labels and rights holders that have identified ways to live off royalties, as well as the most-listened to artists such as Taylor Swift and Ed Sheeran. It's been less good for musicians lower down the ladder.

Nor has it been good for shareholders of Spotify or similar standalone music-streaming platforms like Deezer SA, with tough competition in a saturated market threatening their pitch as high-growth tech plays. Platforms also have limited negotiating power with the record labels and rights holders who are keen to maximize the value of their hit songs and star artists. Spotify has never turned an annual profit; it seems to be in “perennial start-up mode,” as music royalties expert Phil Bird recently put it.

With inflation and economic slowdown eating into growth — MIDiA Research analyst Mark Mulligan estimates 2022 global streaming revenue may have risen by just 7% — and with profits at Spotify likely to be elusive for a few more years yet as it funnels more money into podcasts and audio books, what are the options to get out of start-up mode?

One is to hike prices, as