Is Spotify For Sale?

06/12/2014

Are major labels trying to sell Spotify for $10 billion? According to Digital Music News – which, alas, is wrong more often than right, but which does get gossip from music industry insiders – the major labels who collectively own 20% of Spotify are trying to sell the streaming music service. If this is true, it suggests that these labels are more interested in short-term cash than a long-term strategy for selling their music.

Like it or not, streaming music isn’t going away. A lot of revenue is going in that direction, and, if enough people choose to pay for streaming music, this will represent a large amount of money, potentially more than music sales. If record labels – and large institutional investors, such as Goldman Sachs – just want to grab cash now, they may regret it in the future. It’s true that we’ve seen some multi-billion dollar acquisitions lately, and perhaps the people who own Spotify think they can get the same kind of price.

The article suggests that Spotify is looking to a large telecommunications company as a potential purchaser. It’s true that this could be a carrot to get lots of consumers to choose a specific company for their next cellphone or internet contract.