Spotify Argues Against High Royalty Music Fees

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Spotify is Europe’s biggest and most recognizable subscription music service, with over 8 million users. Part of Spotify’s service includes the ability to share music through different transporting networks, offering users the option to choose how they want to access royalty free music. According to Spotify’s website, “there are no restrictions in terms of what you can listen to or when. Forget about the hassle of waiting for files to download and fill up your hard drive before you get round to organizing them. Spotify is instant, fun and simple.”

Daniel Ek, owner founder of Spotify, recently pleaded with the Swedish music industry not to charge high royalty fees for streaming music services, but to try and plan a system where money is made through a number of different routes, instead. According to IBTimes, Ek suggested such feasible routes as music downloads, advertising, merchandising and tickets to live events. Ek’s fear is that high royalty music fees would cause online music businesses, such as Spotify, to fail.

Right now, royalty free music services are relying mainly on advertising revenue in order to survive. Spotify’s future looks “spotty” at best, and is going down the same road as Napster did 10 years ago. Napster was the original royalty free music pioneer, offering free music downloads and music-sharing capabilities between users. Music executives and artists from all over the world joined in the fight to shut Napster down. Eventually, Napster became a paid-subscription service but lost out to bigger and more powerful services such as Itunes. Unlike Napster, Spotify cleared the rights to all of the music it offers online. But, the royalty fees are a heavy price to pay.

Spotify does not want to become the next Napster, and Ek is fighting hard to keep royalty free music alive and well. There are a variety of royalty free music services available online. But if royalty fees increase and regulations intensify, you will see those services decline and eventually they will cease to exist.

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