11 Oct The Spotify Model May Be Sustainable After All
Spotify UK Shows That the Freemium Model Is Not ‘Unsustainable’
By Glenn Peoples
October 9, 2012
A business model that pays rights holders nearly every dollar, euro or pound generated is clearly not sustainable. This fact is obvious to Billboard readers as well as a digital service’s management and the company’s investors.
Last week I wrote about Spotify’s financial statements posted at PrivCo, a website that posts the financial statements of privately held firms. My first impression was that PrivCo’s numbers looked off. After PrivCo’s CEO sent me a link to the full financials and walked me through the numbers, I better understand how the numbers line up — but I don’t agree with his negative assessment.
Spotify is indeed losing money, but I don’t think its business model is unsustainable.