It used to be you had to spend $20 on just one CD. People would spend thousands on CD collections.
These days you can access so much for free, and what isn’t free you can get for $10/month or less. Music piracy was rampant in the late 90s and 2000s with MP3s, these days no one even bothers with that because it’s all free anyway.
How do they still make money?
In: 15
This is a question that’s been asked and answered here before but I’ll give you the gist of it.
Back in the pre MP3 days the supply of music was low and the cost of music (as in, to the end consumer) was high, 1 album = $20+ where as now the supply of music is, astronomical (particularly in comparison to pre MP3 days) while the cost of music (again, to the end consumer) is either quite low or free.
This is paid for via subscriptions, Spotify has about 180million paid subscribers and 406million MAU (Monthly Active Users) So that means that for around 226million users (this is just Spotify alone) they will be, fed an add every “X” amount of songs or ever “X” amount of minutes.
Using Spotify as the example here, their deals with the 3 record companies (who are/were also all minority owners of Spotify early on) basically sees Spotify give 70% of all revenue they generate, to the record companies.
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