Based in New York, Stephen Blackwell has experience as chief strategy officer with the Billboard-Hollywood Reporter Media Group and also guided SpinMedia. Stephen Blackwell has extensive knowledge of the music landscape, with a focus on digital trends driving sales and revenue.
A recent USA Today article brought attention to the challenges faced in making a profit with streaming music services, even though a large percentage of the music listening population has abandoned downloads and CDs in recent years in favor of monthly-subscription and free music platforms. These include Apple Music, Pandora, SoundCloud, and Spotify, with the latter having publicly detailed its payouts to music labels as part of filing for a US IPO.
Despite having 71 million subscribers, the Swedish company is facing significant challenges in turning that into a profit. With $4.5 billion in sales achieved in 2017, largely through $9.99-a-month subscriptions, its gross margin was only 21 percent, which led to overall operating losses.
Pandora, which pioneered the personalized Internet music station, is in even more dire straits. Relying largely on ads for revenue among its 75 million listeners, the company lost $518 million last year. This led to a management change and the shedding of a ticketing division.
A silver lining for companies such as Spotify, however, is that the music industry prefers them to completely free platforms such as YouTube. At the same time, companies such as Amazon, which bundles its music with Prime, may accept music as a loss-leader, as long as it keeps users on its shopping platform, where significant profits can be earned.
A recent USA Today article brought attention to the challenges faced in making a profit with streaming music services, even though a large percentage of the music listening population has abandoned downloads and CDs in recent years in favor of monthly-subscription and free music platforms. These include Apple Music, Pandora, SoundCloud, and Spotify, with the latter having publicly detailed its payouts to music labels as part of filing for a US IPO.
Despite having 71 million subscribers, the Swedish company is facing significant challenges in turning that into a profit. With $4.5 billion in sales achieved in 2017, largely through $9.99-a-month subscriptions, its gross margin was only 21 percent, which led to overall operating losses.
Pandora, which pioneered the personalized Internet music station, is in even more dire straits. Relying largely on ads for revenue among its 75 million listeners, the company lost $518 million last year. This led to a management change and the shedding of a ticketing division.
A silver lining for companies such as Spotify, however, is that the music industry prefers them to completely free platforms such as YouTube. At the same time, companies such as Amazon, which bundles its music with Prime, may accept music as a loss-leader, as long as it keeps users on its shopping platform, where significant profits can be earned.
