Earlier this year, Patrick Carney of The Black Keys said this about Napster founder Sean Parker, Spotify board member and investor, in response to Parker's absurd claim that Spotify would make more money for the music industry than iTunes:
Parkeran a**hole. That guy has $2 billion that he made from figuring out ways to steal royalties from artists, and that's the bottom line. You can't really trust anybody like that. The idea of a streaming service, like Netflix for music, I'm totally not against it. It's just we won't put all of our music on it until there are enough subscribers for it to make sense. ( HuffPo, 3/28/2012)
Carney was pretty much on the mark; however, he got the part about "a streaming service" being "like Netflix (NFLX)" slightly wrong.
I need a whole 'nother article to give a Spotify/Pandora/Netflix comparison proper treatment. And I will write that article -- a Part 2 if you will -- later this week on TheStreet.But, for now, let's just say:
Timestamp this. And consider it a preview of Part Two: A Spotify IPO will make the Facebook (FB) and Pandora IPOs look like smashing success stories. Keep tabs on my articles as they publish here and Follow me on Twitter as well as Google Plus +. Follow @rocco_thestreet This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
Spotify gets all of the good press. Pandora gets all of the bad press (Some of it, recently, from me). Spotify gets credited with being able to revive the music industry. Apple already did that. Pandora continues to, but, more importantly, it is redefining radio, something neither Spotify or Apple will be able to do. Record labels love Spotify. They hate Pandora. Musicians such as Carney hate Spotify, and for good reason. They should love Pandora. I'll explore the reasons why later this week when I clear up misconceptions about the different music royalty structures Pandora and Spotify live by, using the well-known Netflix model to make sense of it all.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV