YeonKyung Lee Spotify ’s business model in digital music industry and copyright infringement issue Network Economy
YeonKyung Lee
Spotify’s business model in digital music industry and copyright infringement issue
Network Economy
목차: A Brief Company History Financial Data And Statistics Major Competitors
Copyright law Infringement issue Copyright law Advantages And disadvantages
01 02 03
04 05
Contents
목차: A Brief Company History
01
A Brief Company History
What is Spotify?
02 • Cloud-based music
streaming service
• Founded in Sweden (2006)
• Library of 16 million songs
• Available in 9 countries including Sweden and USA
• Major deals with Sony, Universal, EMI, and Merlin
• The service operates under complete Digital Rights Management (DRM)
• Spotify strictly enforces access
control to avoid copyright
infringement
01
A Brief Company History
How Cloud-Based Services Work?
- Instead of downloading every single music file independently and saving it to your hard drive, it allows you to listen music stored on a separate system.
- The music is essentially kept “in the cloud” where you can access it from any computer, laptop, smart phone, or table device with an Internet connection.
A Brief Company History
A Brief Company History
2006
Oct
2008
Sep
2009
Founded
In Sweden Launch
Mobile
app
July
2011
3M
Active Users
1.3M
Subscribers
U.S. launch
Feb
2012
integration
2013
20M
Active Users
5M
Subscribers
A Brief Company History
User Interface
A Brief Company History
Price Model
목차: Financial Data And Statistics
02
Financial Data and Statistics
Financial Data – Revenue and Net Income/Loss
Financial Data and Statistics
Financial Data – Paid/Unpaid subscribers in the U.S. from August 2011 to April 2012
Financial Data and Statistics
Statistics
16 M songs
10,000 New tracks
everyday
20M Monthly
Active users
700+ Playlists
Created everyday
목차: Major Competitors
03
Major Competitors
DIRECT SALE iTunes
CD
STREAMING Rhapsody
MOG
Rdio
Napster
RADIO Last.fm
Pandora
STORAGE Google Music
Amazon Cloud Drive
Apple iCloud
PIRACY RapidShare
Torrent
Major Competitors
PANDORA - 150+ million registration
- Lost 20M on 81M revenue (2011)
- Operates under the compulsory licensing provision of federal copyright law (paid 54% of its revenue for content acquisition)
- Most revenue relies on advertising
SPOTIFY - 20 million active users
- Lost 57M on 236M revenue(2011)
- Negotiate with record labels to use their songs(paid 96% of its revenue for licensing)
- Most revenue relies on subscription
목차: Copyright Law Infringement issue
04
- Spotify provides a service of user-generated playlists
- Ministry of Sound, a dance-music record label based in the U.K. is suing Spotify for playlists that mimic the order of the label’s popular compilation albums
- The company is seeking to remove these playlists and collect damage
“Curation of songs chosen for particular compilations is a form of intellectual property”
Copyright law infringement issue
Spotify Sued Over User-Created Playlists (Sep 2013)
목차: Copyright Law And advantages /disadvantages
05
Spotify’s expectation that ‘given a free and legal alternative, people will pirate less’ has been proven over the last 5 years with significant reductions in piracy across the territories where Spotify is established.
Copyright law and advantages
Spotify’s positive impact on piracy
- They pay 97% of its revenue for licensing
- Music industry hasn’t yet figured out the balance between licensing costs and how much money a digital service can make
Copyright law and disadvantages
Financial Loss of the Company
- Spotify pays artists between $0.006 and $0.0084 per song stream
- Right Holders: Labels, publishers, distributors, digital distributors, independent artists
- According to a study conducted by Peter DiCola of the Northwestern University School of Law, artists are now, on average, deriving a relatively tiny percentage of their income directly from copyrights.
Copyright law and disadvantages
Does copyright law protects artists?
Copyright law and disadvantages
Does copyright law protects artists?