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Report: Spotify to sell music downloads via 7Digital


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An article in the Financial Times this morning claims that streaming music service Spotify is looking for a new way to make money – selling downloads. It’ll be via a partnership with download store 7Digital, apparently. They don’t say much more than that, mind – the article is mainly about the struggles being experienced by ad-supported music startups – and the core problem that their advertising revenues can’t pay their licensing fees.Here’s what David Kenny of Vivaki, the digital unit of ad agency Publicis, has to say: “It is hard to see a big business in ad-sponsored online music. There is not enough advertising to fund the cost structures of those businesses.”And if the message isn’t hitting home, TechCrunch has a big op-ed from the US perspective, suggesting that no streaming music startup is making money, with even MySpace Music spending more than $2 million a week on label payments. Will lowering their rates help? “All that means is that these startups will bleed a little slower. But they’re still going to go out of business, because the venture firms are done investing in them.”

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