Showing posts with label music start-ups. Show all posts
Showing posts with label music start-ups. Show all posts

Wednesday, May 27, 2009

Music Labels Cut Friendlier Deals With Start-Ups; New York Times, 5/27/09

Brad Stone via New York Times; Music Labels Cut Friendlier Deals With Start-Ups:

"“Entrepreneurs are also realizing they need to spend as much energy on their business model as they do on technological innovation.”

The changes stem from an unavoidable and unpleasant reality facing the music business: the economics of offering music free on the Web do not work...

As a result, the online music landscape is littered with the wreckage of failed or troubled music start-ups...

“There was a generation of Web companies that signed up for deals that didn’t make sense, and unfortunately they set a precedent,” Mr. Westergren said. “Now that those deals turned out to be unsustainable, it made the labels realize that there was actually not hidden money they were missing out on. I think labels have a much better understanding of the economics of the business."...

Spotify plans to launch in the United States later this year, and its founder, Daniel Ek, claims that the music labels have given the start-up flexibility because they are attracted to a service that converts illegal downloaders into monetizable consumers of music. “This is what has been lacking for 10 years. The only way to beat piracy is by actually creating a legal service that is just as good,” Mr. Ek said."

http://www.nytimes.com/2009/05/28/technology/start-ups/28music.html?_r=1&hpw