Last week it was announced (according to Music Business Worldwide) that the CEO of Pandora Tim Westergen has stepped down. In addition to Westergen, Pandora’s president (and former CFO) Mike Herring, and CMO Nick Bartle (who joined the company just nine months ago) have also stepped down.
The current tally stands at six senior executives of Pandora stepping down over the last 18 months. Wow.
Pandora posted a net LOSS of 343 million dollars in 2016.
But of course we have a bastion of hope in the super music company Spotify, right? Well…here’s the real facts: Spotify has yet to be a profitable company. That’s right, a company as big as Spotify has yet to turn a profit. How long can this last you ask? Well, let me start by telling you how it’s lasted this long so far…
Spotify was deemed the savior of the music business so the major labels poured cash onto it’s balance sheet to give it time to build. Well it’s been “building” since 2008 with no money to show for it and the labels are not happy. As a result, Spotify recently took out a 1 billion dollar loan so it could, very literally, buy some time until they could take it to the stock market for a public offering. That basically means they are hoping the public will start paying the bills for the company in the form of shares on the open stock market.
However, according to BBC, the terms of the loan agreement state that the interest rate goes up by 1% every six months until the IPO happens, while also giving a 2.5% discount on shares to the investors.
So, as time goes by Spotify is paying a bigger and bigger sum to its creditors just to settle the interest on the loan. This also trims the money they can raise from the IPO by a bigger amount.
At the same time, according to Billboard “the entire music business now has an interest in its success. If it’s not too big to fail, it’s headed in that direction quickly.”
Okay, so there’s the “death” part of music; but I also said “resurrection”. Well, as you may have guessed by the website you are reading this on, Crowd Music is here to help. Very literally, Crowd music has found a way to pay songwriters, artists, producers etc… better than ever AND pay the consumers for listening, liking, and sharing music. Crowd doesn’t need to raise capital to go to the stock market because we are literally profit sharing every dollar with our consumers…our “Crowd” if you will. This is the future of music. Crowd is breathing new life back into a music business that has been choked by greed.
As our Chief Creative Officer David Browning likes to say, “It’s amazing what you can accomplish when you take greed out of the picture.”