The same labels it’s helping to save also hold Spotify’s fate in their hands, however. According to its filing, four companies — Universal Music Group, Sony Music, Warner Music Group and Merlin, which represents tens of thousands of independent record labels — control 87 percent of the music people listened to on the platform last year.
That concentration of power — what Spotify calls its “lack of control over the providers of our content and their effect on our access to music” — coupled with the extremely complex system around licensing and legally playing music, mean it’s not completely in control of its own fate. Compare this to a company like Netflix, which now drives its viewers toward films and shows it has created.
Just before the turn of the new year, Spotify was sued — not for the first time — for $1.6 billion over a failure to pay artists, over what it says is a complex system.
Wednesday’s filing also makes mention of some controversies in Spotify’s past. Recently, a scam based on a clever manipulation of robot-driven streams of fake music was alleged by Music Business Worldwide. The filing, among the many risks it lists, says: “… an individual might generate fake users to stream songs repeatedly, thereby generating revenue each time the song is streamed. … In 2017, we detected instances of botnet operators creating fake new User accounts seemingly for the above purposes.”
Similarly, last year the company was accused of hiring producers — at the time, what were called “fake artists” — to create music for its own (very popular) playlists in order to fulfill what it perceived as a demand from its customers. The filing mentions it may in the future “expend substantial financial resources on [among other things] … creating new forms of original content.”
The question, as ever, remains: What will the future hold?
CorrectionFeb. 28, 2018
This article and its headline originally mischaracterized the entry of Spotify’s stock into the public market — it will allow its privately held shares to be liquidated publicly, not generate an additional $1 billion in capital
Article Appeared @https://www.npr.org/sections/thetwo-way/2018/02/28/589627338/spotify-files-papers-for-a-1-billion-entry-to-the-stock-market