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Big Four Buy World Domination for Chump Change

And they're not timid about shafting their artists again.


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STOCKHOLM (Rixstep) -- Sony sold their recording artists up the river for a sizeable chunk of Spotify stock. So did the other three of the 'Big Four'. The trick is they don't plan on paying their artists more than chump change in royalties, says Swedish rock star Magnus Uggla.

Here's the breakdown of Spotify ownership as culled by IDG Sweden.

Martin Lorentzon (Spotify) 28.6%
Daniel Ek (Spotify)23.3%
Northzone Ventures11.9%
Enzymix Systems5.8%
Sony BMG5.8%
Universal Music4.8%
Warner Music3.8%
Wellington IV Tech3.8%
Creandum II LP3.5%
Swiftic2.6%
Creandum II KB2.4%
EMI1.9%
Merlin1.0%
SBH Capital0.8%

Spotify's market value is today over $250 million. Here are the investments.

Northzone€8.0 million
Creandum€4.0 million
Wellington€6.5 million
Li Ka-shing €20.0 million

But the Big Four (and Merlin) also own stock in Spotify. How much did they invest? Here comes the kicker.

Sony BMG€2,935
Universal Music €2,446
Warner Music€1,957
EMI€980
Merlin€490

Note that those figures aren't millions or thousands.

For a 6% share in a $250 million company Sony paid less than €3,000.

For 4% Universal paid less than €3,000. For 4% Warner paid less than €2000. For a 1% share in a quarter of a billion dollar company Merlin paid less than €500.

Which is all fine and good if the Big Four (and Merlin) choose to play hardball. Daniel Ek's been living on an airplane for the past few years, trying to get these dinosaurs to come around. Precisely as Steve Jobs once hammered at them to get them to accept iTunes.

The difference here is the record companies turned around and shafted their artists - precisely as they accused The Pirate Bay of doing. Or so says Swedish rock star Magnus Uggla who is now going to withdraw his song collection because he feels Sony tricked him.

Guess who the bad guys are in this scenario? Artists worldwide made more money last year than ever before but the record companies tanked; the artists don't sue file sharers - the record companies do; and yet the artists never get any of this money from the record companies. What's exactly new?

STIM Happy

Not everybody is disappointed in their revenues from Spotify. STIM - the Swedish composers' international music bureau - are really happy with the revenues they've already received. And they also praise Spotify for their thorough bookkeeping.

'Spotify has existed less than one year but it's already been established as a very popular music service that generated more than a half million SEK to artists for the first 2-5 months', says Susanne Bodin of STIM. 'This along with the detailed reports we get from Spotify indicates continually increasing and secure revenues to artists. STIM is an organisation owned by members and consequently we're very happy for all good user-friendly and legal music services that make illegal file sharing obsolete.'

Artist Alexander Bard also likes Spotify and says it's only 'old men' who don't like it. Spotify is 'an honest legal service that sticks to the rules and works excellently', he told Swedish Nyheter24.

Uggla Chumped

But former Swedish superstar Magnus Uggla is pissed - mostly it would seem because he feels he's been tricked by Sony's Swedish CEO Hans Breitholtz into believing he'd make more money than he has. Uggla believes Sony have tricked him out of revenues.

'Sony Music were one of the companies who sued the shit out of The Pirate Bay. But now they're doing the same thing as The Pirate Bay. But with the subtle difference that they've tried to keep all this a secret.'

'I'd rather be raped by The Pirate Bay than fucked up the arse by Hasse Breitholtz and Sony Music.'

Alexander Bard thinks Uggla is out of line. Uggla's lastest 'big hit' Jag Mår Illa is now twenty years old.

'The question is how many listeners Uggla actually gets. He was popular 20 years ago. His song Pärlor för Svin is OK but it's not exactly raking in the millions', says Bard.

'It's only old men who boycott Spotify. We who sit at our computers all day long say the service is the best.'

Grapevine

The story got quickly out of hand. Of course it did. TorrentFreak deliberately misquoted Uggla to claim he'd said 'I'd rather be raped by The Pirate Bay than Go with Spotify'. [The real quote can be read above. It does not mention Spotify.]

Of course there are open issues. Magnus Uggla has always been a shrewd businessman and today is intolerably wealthy as a result. And Sony have never produced or owned his music - he's made sure he's kept all the rights for himself. Why should he then go along with Sony and Spotify without checking the details? Something doesn't add up.

Could there be somebody else behind the brouhaha? Some other company currently stuck between a rock and a hard place because the Spotify service eclipsed their own business?

Food for thought.

See Also
IDG.se: Så fick Spotify skivbolagen med sig
Nyheter24: Magnus Uggla drar sig ur Spotify
Nyheter24: Spotify ger säkra intäkter åt STIM
Nyheter24: 'Bara gamla gubbar bojkottar Spotify'
Resumé: Spotify - ett superklipp för skivbolagen

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