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U2 manager Paul McGuinness: 'Artists don't see the financial benefit of Spotify'

Music mogul reckons it's 'ultimately a good thing' but says it still has its flaws

U2 manager Paul McGuinness has claimed that artists are reluctant to embrace Spotify because they don't think it has any "financial benefit".

McGuinness, who was speaking at the music industry trade fair MIDEM, said that although the streaming service was "ultimately a good thing", it was still perceived by musicians as a "promotional medium" rather than a business opportunity.

According to Billboard, he said:
Spotify has yet to become popular with artists because artists don't see the financial benefit. That's partly the fault of the labels because labels partly-own Spotify, and there is insufficient transparency.

He went on to add: "There's no reason why the basic Spotify model can't be a part of the future. It is essentially honest so it should be encouraged. I would like to see it adopted everywhere."

However, McGuinness was less kind in his words for Google, attacking the search engine giant for failing to tackle illegal downloading. "Why are they not trying to solve the future in a more generous way?" he said. "Ultimately it's in their interests that the flow of content will continue. And that won't happen unless it's paid for."

"Though there is some improvement in the digital environment in terms of people getting paid, the vast majority of content distributed through their pipes is not paid for," he added. "That's, in my view, utterly, utterly wrong."

Last week (January 27), Spotify announced that they now have over three million paying subscribers. The service's number of paying subscribers has significantly increased in the last year - it only counted as 5% of the overall subscriber base in March 2011, but now stands at 20%.

However, they are set to face competition from a relaunched Napster, which confirmed earlier this week that it was now operating as a a legal streaming service, which promises paying subscribers access to over 15 million tracks.

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