Ministry Of Sound‘s CEO Lohan Presencer has claimed that it is “dangerous to support Spotify”.
As previously reported, Ministry of Sound is currently suing the streaming service for copyright infringement because the streaming service has allegedly refused to delete users’ playlists that “copy” the tracklistings of its compilation albums.
The dance label is seeking an injunction forcing Spotify to remove these playlists and block any future playlists that attempt to replicate the running order of Ministry of Sound compilations, according to proceedings launched in the UK High Court earlier this month (September 2).
Spotify has the rights to stream all the tracks on the playlists that Presencer wants removed, but Ministry of Sound is making a legal argument that the running order of its compilation albums can be copyrighted because of the skill and expertise required to assemble them.
In a new interview with Digital Spy, Presencer has claimed that it is “dangerous” for labels to support Spotify’s business model. Asked whether streaming services are bad for new artists, a claim made by Thom Yorke recently, he replied: “I wouldn’t necessarily say that streaming is detrimental to new artists, but I question why the majors are so supportive of a business model that is so clearly unsustainable in the long term.”
He added that because the proportion of global music consumers who use Spotify is currently relatively small, the revenues it generates are “not significant in comparison to the revenues the music industry generates from somewhere else”. He continued: “Most worryingly it loses so much money and continues to lose money, and its losses are widening. That’s not a sustainable business model. It’s very dangerous, we believe, to support a service where there’s no long-term prospect of it succeeding, but at the same time it also paints a picture for the consumer that music is free, which it isn’t.”
Spotify has previously defended critics of its business model. Earlier this year, a spokesperson told NME: “During 2012 Spotify saw dramatically increased revenues while maintaining a free to paid conversion rate of well over 20 per cent – unheard of for a freemium business, and a clear demonstration of the success of the business model. In 2012 the business focused on driving user growth, international expansion and product development, resulting in soaring user numbers and increased market penetration. Our key priority throughout 2013 and beyond remains bringing our unrivalled music experience to even more people while continuing to build for long-term growth – both for our company and for the music industry as a whole.”