Is Facebook killing music sharing because they're profiteers or just ignorant?
Facebook is talking about bringing music sharing services such as Spotify, Rhapsody, Rdio, MOG and Deezer onto their site. The idea is to make your profile an entertainment hub. But how much of a hub will it be if it drives these businesses out of business?
Very few online music services are profitable, and they have a model that causes them to lose money every time a free subscriber joins. After all, even “free” music requires a royalty paid to the record companies.
Pandora, which had a successful IPO, has yet to make a profit. Martin Scott from Analysys Mason estimates Spotify had a $6 or $7 million dollar profit in 2010, and Rhapsody’s president Continue reading