This seems to fall well in line with the GigaOm article, Why Spotify will never be profitable: The secret demands of record labels, which describes (by a competitor) the unsustainable terms imposed by labels on Spotify. If the details in the GigaOm piece are true, they’re backed up by the Forbes article which details Ek and Lorentzon’s desire to only work with real agreements by labels. By ignoring the money and focusing on the disruption, I’m getting the picture that Spotify runs the real risk of being gutted by labels.
When I was in lifeguard training classes years ago we learned that when approaching people close to drowning, victims will often panic and cling onto your arms or head, which could impede your ability to swim and take you underwater with them. To prevent this, the instructor taught us that in this situation you should punch the drowning person in the face and knock them out, so you can safely bring the person to the shore. It was an exciting proposition for 17 year old me.
Right now the record labels have the same desperation as a drowning person. They’re trying to cling onto any small pieces of driftwood or seaweed that passes by, like suing torrent downloaders and writing the legislation behind SOPA, as if either of those actions are a solution. Spotify has correctly solved so much of the music distribution problem that it’s disheartening to watch it be gutted by short-term greed.
Forbes is right: Ek is the most important person in music. And he needs to start using his new position as a bully pulpit to start throwing punches to the face of an industry that needs it. This could come in the form of a more standard negotiation with all labels, or for Spotify to front its own label to sign musicians (like Netflix producing its own original content). Otherwise, Spotify could disappear as suddenly as Napster, or worse, could become a product crippled by time limitations and region restrictions imposed by record companies. I want to keep using the Spotify service I’ve grown to love for a long time. So go and punch record labels in the face.