"As Businesses, Pandora and Spotify Are Divorced from Music"

"When I started making records, the model of economic exchange was exceedingly simple: make something, price it for more than it costs to manufacture, and sell it if you can. It was industrial capitalism, on a 7" scale. The model now seems closer to financial speculation. Pandora and Spotify are not selling goods; they are selling access, a piece of the action. Sign on, and we'll all benefit. (I'm struck by the way that even crowd-sourcing mimics this 'investment' model of contemporary capitalism: You buy in to what doesn't yet exist.)

"But here's the rub: Pandora and Spotify are not earning any income from their services, either. In the first quarter of 2012, Pandora-- the same company that paid Galaxie 500 a total of $1.21 for their use of "Tugboat"-- reported a net loss of more than $20 million dollars. As for Spotify, their latest annual report revealed a loss in 2011 of $56 million.

"Leaving aside why these companies are bothering to chisel hundredths of a cent from already ridiculously low "royalties," or paying lobbyists to work a bill through Congress that would lower those rates even further-- let's instead ask a question they themselves might consider relevant: Why are they in business at all?"

Damon Krukowski at Pitchfork argues that streaming-music companies only "exist to attract speculative capital."