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“People were listening to plenty of music, but the market needed a better way for artists to monetize their music and consumers needed a legal and simpler way to listen.” “Growth in piracy and digital distribution were disrupting the industry,” according to the Spotify filing. As Spotify points out in its 260-page public filing, worldwide record-business revenues fell from $23.8 billion in 1999, the peak of the CD era, to $16.9 billion in 2008, when the business had largely switched to downloads.
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By its 2008 launch, top labels had badly mishandled the original Napster file-sharing service, suing it out of existence rather than making partnership deals, then hastily allowed Apple’s iTunes Store to take over the download business for years. Spotify’s CEO Daniel Ek has been outspoken about how his Swedish company came along at a time of intense record-business decline. While Spotify is making less and less money per subscriber, thanks to super-cheap family plans introduced in 2016, the company sees growth from the rising number of global smartphone users and expansion into new territories: “We believe we are still in the early stages of realizing our goal to connect artists and audiences around the world,” the company said in a statement.
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More signings of bands,” Jim Caparro, former president of Island Def Jam, tells Rolling Stone. “It’s going to be more content-holders putting their feet on the gas pedals. Beyond that, some labels could expand their staffs significantly. What will labels do with the windfall? Warner could pay off its multimillion-dollar debt, while Sony and Vivendi, corporate parents of the Sony and Universal labels, could absorb the revenue, music-business sources say. If it hits its $23 billion valuation, labels could make hundreds of millions of dollars - particularly Sony, home of Beyoncé and Bruce Springsteen, which stands to bring in an estimated $1 billion-plus.Īll three labels – Sony, Universal and Warner – have pledged to give a portion of this money to their artists, but several reps for top artists have told Rolling Stone they haven’t been informed of payment procedures. The music-streaming giant, which has 159 million monthly listeners and 73 million paid subscribers, filed for a modified initial public offering Wednesday, known as a direct public listing. After some 20 years of stumbling through the digital era, the world’s biggest record labels are finally poised to get richer, thanks to Spotify’s plan to go public.