Music streaming platforms; How do they work, what are their long term plans. An in depth view on the world of online music distribution.

mystix.io

Streaming Platforms: Profit or loss?

mystix,mystix.,mystix.io,the mystix,themystix,mystix.io,mystixio,music,download,free music download,mp3 free download,free,download music,music download,blog,streaming,platforms,royalties,spotify,platform

With internet becoming accessible to the biggest part of the world’s population, music streaming platforms found themselves growing immensely and that’s because (in most cases) they offer a wide variety of quality and free music live streaming. People no longer have to buy cds or digital copies of albums and tracks; they simply listen to their favorite music with just a click of a button. So, since those sites are growing their user bases and generating more traffic they are also earning more money, right?

The short term answer in this question is no and there is only one reason. Royalties.

Royalties is the amount of money the music streaming platforms have to pay to the record’s right holders for copyrights. So since these sites are acquiring more users, they also need to pay more royalties. One bright example of this situation is Spotify. Spotify announced a net loss of $600 million by the end of 2016, although it had grown its user base by 40% since the end of 2015. You can view Spotify’s financial review here.

So here is where another very reasonable question is generated. How do these platforms survive, since they are losing so much money? The answer is simple. These great losses are short term so that there can be benefit long term. This can be achieved through exclusive deals with record labels and music distributers so that music platforms can pay less royalties thus balancing income with expenses.

In other words, such companies are only making enough money to ensure that they won’t cease to exist until they start profiting. And that in our opinion won’t take long, as online music streaming dethroned physical and digital sales from being the #1 moneymaker for music labels.   



Latest posts

releases
Listen to Louis the Child and Caroline Ailin's new song Last to Leave
Ilias Kanello | 23 December
Last to Leave, a chill future bass collaboration between producer duo Louis the Child and vocalist Caroline Ailin is out now. Stream it on Youtube.
Read More
interviews
Christian French talks about career future and recent collaboration 'Done From The Start' with Triegy.
Marios Messinis | 6 September
Upcoming singer and songwriter Christian French gets interviewed on Mystix. about influences, plans and his recent release 'Done From The Start' with producer Triegy.
Read More
releases
Boombox Cartel finally release awaited VIP remix of Jefe and fans go wild.
Marios Messinis | 1 September
After months of unbearable waiting, Boombox Cartel finally upload long-awaited VIP remix of Jefe on soundcloud. Stream it below.
Read More

Posts on Music Business

music-business
Women in the Electronic Dance Music scene
Christos Christidis | 12 August
It is often accepted that women have a small contribution to the EDM industry. Is that really true?
Read More
music-business
Streaming Platforms: Profit or loss?
Christos Christidis | 23 July
Music streaming platforms; How do they work, what are their long term plans. An in depth view on the world of online music distribution.
Read More

About the Author

  • 23 July 2017

    I am a die hard Hardstyle fan as well as solid big room and progressive house. Writing about things that interest me, expressing my opinions and sharing my point of view with people from all around the globe is also amongst my hobbies.

  • Share this Blog

    Comments