As I understand it, Spotify (and Pandora, and other streaming services) pay a fraction of the net
had from CD sales. Why would anyone who thinks they have a hit let Spotify (or, for that matter,
iTunes) get anywhere near their product until they've sold every CD possible?
Learn from the newspaper and magazine business -- when you put your product online at little or no
cost, no right-thinking consumer will buy your physical product and you will be driven out of
business. I don't understand why this wasn't always painfully obvious. It's simple math, simple
economics. No "new paradigm" can defy simple, long-known market economics.
The only product record companies should be offering download and streaming companies is product
that is unlikely to be profitable on physical media, or product that has run its course on physical
media. If a company has a hit album out, it should be offered for download only as a whole album
priced like a CD (and then people are just crazy not to buy the CD, but some see it as not crazy to
pay a premium for perceived convenience).
Yeah, this might be a "20th Century argument," but facts is facts and you can't run a business if
you can't make money. It's not a business at that point.
-- Tom Fine