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Comment by badloginagain | Hacker News Reader

I find it surprising that Spotify isn't pursuing its own label. Netflix proves that if your biggest risk factor is other's companies content, you have to move to host your own content before the competition wisens up.

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A lot of record labels are part owners. That's how they are "getting away with it". Musicians are the only ones getting screwed by spotify.

http://www.swedishwire.com/jobs/680-record-labels-part-owner...

Interestingly, listing publicly as they're about to do, will release them from that binding over time. The ownership position will be majority non-label and non-insiders with a modest amount of time. Large investment funds will demand they make appropriate choices specifically to benefit the Spotify business, even if that includes building their own label to compete with the major labels. Assuming Spotify thrives over time, it would seem inevitable they'll pull a Netflix. It makes far too much business sense given their between very low and negative margins in the business as it is today (wherein the labels persistently squeeze them nearly to death).

I would think they have the scale at this point to do it. It simply may be very expensive and difficult to lure the musicians away from their existing label infrastructure. If it's not done right, it ends in disaster for the artist and they'll get frozen out by the labels in the future.

Cartels always play very dirty when you threaten their business. And the existing position that makes them a cartel (or quasi-cartel), enables them to do that far better than your typical corporation or commercial entity.

I wonder if it has to do with the economics of running a label. When you make a movie people and people watch it, you make money. If you make an album you might get a little bit of money but you have to then sell a concert tour and merch to make it worthwhile.

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