The Business: Borders Closing, Spotify in US; Updates on YouTube, iTunes, MySpace

digitalmusicnews, November 22, 2011: “On Tuesday, Pandora revealed something remarkable: profitability, at least for a fleeting three months.  During its latest quarterly wrap-up today, Pandora (P) reported a slim profit of $638,000, a reversal from a year-ago decline of $1.77 million… thanks to more-than-doubled revenues of $75 million.  That in turn was based on a monstrous total of 2.1 billion listening hours – over a mere three-month period (ending October 31st…

 

All of which is giving Pandora a greater share of the US-based internet radio pie.  But it also helps to validate Pandora’s belief that on-demand platforms like Spotify are not creating a usage dent.  In fact, the impact may be negligible: Pandora’s active users now stand at 40 million according to the company, a 65 percent year-over-year gain.

 

On the grander stage, Pandora now claims a 4.3 percent share of overall radio listening (terrestrial + internet + whatever), more than double the piece from last year.”

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July 19, Wall Street Journal: “Borders, which employs about 10,700 people, scrapped a bankruptcy-court auction scheduled for Tuesday amid the dearth of bids. It said it would ask a judge Thursday to approve a sale to liquidators led by Hilco Merchant Resources and Gordon Brothers Group… The company said liquidation of its remaining 399 stores cou’d start as soon as Friday, and it is expected to go out of business for good by the end of September…Borders filed for bankruptcy-court protection in February. It has since continued to bleed cash and has had trouble persuading publishers to ship merchandise to it on normal terms that allowed the chain to pay bills later, instead of right away.”

July 22, Reuters: “Going-out-of-business sales began on Friday at all of Borders Group Inc’s (BGPIQ.PK) 399 stores, according to a spokesman for one of the companies charged with liquidating the nation’s second-largest bookstore chain….It was initially unclear whether liquidators would hold off on the sales to give the parties more time to come to terms on a deal, but Venezia said on Friday that the sales had begun at all stores…. A spokeswoman for Borders did not address the closing sales, saying only that the company was “hopeful” for a deal, which could save as many as 1,500 of Borders’ nearly 11,000 jobs.”

As in Europe, Spotify free user are allowed 20 listening hours per month for the first six months, and 10 hours afterwards.  Additionally, songs are limited to five times per month.  For free users the service trumps Rhapsody’s limited trial offers and Pandora (which offers 40 hours per month free but lacks “on demand” features).

Answers to FAQs About Spotify, as explained by CNET and NPR:

Q: What is Spotify?
A: Spotify is a “music-streaming service allows users to stream what it says are “millions” of songs both from their computers and from mobile devices. Spotify relies heavily upon playlists, which users can create as soon as they boot up the service. Users can search through the company’s tracks and simply drag and drop songs to a given list. The service also allows people to import MP3s to bolster the music player’s offering. Once the playlists are created, they can be accessed from anywhere a user loads Spotify.”

Q: How much does it cost?
A: “Spotify offers a free, ad-supported service for those who want to listen to tracks on their computers.”

“That four letter word — F-R-E-E — is the major difference between Spotify and other streaming services that have taken hold in the U.S. with varying degrees of success while Spotify was growing in Europe. Rhapsody, Rdio, MOG and other services that offer subscription access to large databases of music all charge a fee for access. In order to offer its free version, Spotify has spent the last year negotiating licensing deals with the four major labels in the U.S.; The New York Times reported yesterday that it just finalized a deal with the fourth, Warner Music Group, on Wednesday afternoon… It comes saddled with a few advertisements, as well as limits on the number of hours you can listen each month — 20 for the first six months of your membership, 10 after that, and you can listen to each song only five times per month. More importantly for the time being, it will also require an invitation from the company, which you can request at its website.“

Q: What if I don’t want ads?
A: “Users can also sign up for the company’s $4.99 per month unlimited plan, which allows them to stream “millions of tracks” with no time limits and no ads. The company’s $9.99 per month premium plan includes all the same features, but adds the ability to listen without a Web connection and on mobile devices. Premium also boasts enhanced sound quality.”

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