Why Spotify Needs to Follow Netflix

Spotify is a service that you have likely come to know if you’ve spent any time at all on the internet. The popular music streaming service is enjoyed by fans from around the world, boasting a cool one hundred million users as of 2016. However, with how much money the company has spent on royalties since its inception, a change in the way things operate could have the potential to push the company even further. It starts by following in Netflix’s footsteps.

Since the company was founded, Spotify has spent approximately ten billion dollars on music royalties alone, making it extremely difficult to turn a profit based on how much money they are spending. Even with how popular and widespread the service has become, it has operated at a loss since its creation in 2006.

With the way they currently operate, a healthy relationship with artists and label companies is the only way for a company like Spotify to stay in business. However, taking a page out of Netflix’s book could help them to overcome the growing expenses that the company has.

Netflix has become it’s own “movie studio.” The company has produced its own shows like Stranger Things, House of Cards, Narcos, and many more. These titles have proved extremely successful, prompting Netflix to “roll with the idea,” and create more original series’. If Spotify were to do something similar with music, it could help them overcome the expensive costs of music royalties. If a popular artist were to sign to distribute their music with the company, then it would reduce the company’s dependence on big name music labels.

Not only would a new system like this help to soften the company’s expenses, it would also create an entirely new environment for musicians and artists to create and share their music. With how open Spotify is to emerging artists, the platform would be a great place for new, undiscovered artists to have their chance. If a system like this were to be introduced, then the expenses that were used on royalties could be put towards helping emerging artists get their chance in the spotlight. Since the royalties would no longer need to be paid, with how large the company is, it would not take them long to begin operating with a positive income.

Not only would this be an amazing new way to create and share music, it would be revolutionary to the people around us. And that is exactly what we need in this rapidly expanding world of technology.

One thought on “Why Spotify Needs to Follow Netflix

  1. Well, as I look at this article, very well written I might add. Yet, think of how many people would listen to this or tune to the station. I mean Spotify has many of my favourite artist that distribute their music on this app along with many others. But, there is the added fact that Spotify would be as much of a go to record label as lets say, let me think of EDMs Spinning’ Records. That is strictly a record label not a streaming app. Most producer and musicians would go to record label instead of a streaming app to sell their music. Unless Spotify really sells themselves as a record label then maybe it would work out in the process. Many other sights such as Sound Cloud ( Check mine out ), ITunes and even Google Play. These all fall in the category of streaming apps not record labels.

    Or, they could releases a sub category like Spinnin’ has like Spinnin’ Deep. Maybe if Spotify release a subsidiary to a record label and have their name imprinted on the label to the point in which they start their own record company, this is when it might work out, But it would be difficult to do, with all the other record labels and record distributors already in the business. This is just my look at this idea. It would really help Spotify, but you need the people to see that a new formed record label would be good enough for their products to be let out. not just streamed.

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