The ineffectiveness of streaming-audio websites
There’s an interesting article by Lucas Gonze this week that questions whether ad-supported music websites can survive. The basic premise is that streaming-audio music services such as iMeem can’t stay afloat given record labels current pricing demands.
The major record labels apparently demand one cent every time a song is played. To break even, the streaming-audio websites need to sell one ad for one penny per song played — something that is near impossible for any music website.
So that leaves a gaping hole where money is concerned and streaming-audio websites cannot even cover their bases and will certainly struggle to make a profit. A more feasible fee is one tenth of what major record labels are demanding, a fee that labels call unreasonable.
It seems as if streaming-audio websites have some way to go before they can be deemed as having successful business models and it doesn’t look as if record labels are going to give any slack.
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