The streaming era is the next music industry ice age.
Beyond their broken business model, these companies share a lot of dubious promises to investors, shareholders and artists. Rdio hopes to get in the black by luring in more ad-supported subscribers. Spotify promises that when it scales up to 40 million paid users—it’s currently at 6 million—that artists will get paid five times what they make from the service today (the math works out, but that 40 million figure is a big “if"). Pandora, unprofitable and crippled by royalty fees as its user base grows, promises that mobile ad revenue can offset the revenue it’s hemorrhaging.