Showbiz Sandbox 215: How Many Music Streaming Services Does It Take To Make A Profit?

December 2, 2013

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Just when you thought the online music streaming space couldn’t get any more crowded or competitive, along comes Deezer. The French company already boasts 5 million paying subscribers in 80 countries and now plans to launch in the United States, where Spotify and Pandora are the market leaders. However, none of these companies are actually profitable, which may be why services like Rdio went through a round of layoffs in November and Turtable.fm is shuttering.

Profitability seems to be an issue for Sony Pictures too. The movie studio lost $181 million last quarter leading to the announcement of significant cost cutting measures in the wake of some summer box office duds.

Disappointing earnings and a declining subscriber base are also a problem at Time Warner Cable. As telcos and satellite providers continue to erode their market share, rumors have begun swirling that the second largest cable operator in North America might be acquired by one or more of its competitors, including Comcast.

Of course, we also cover the week’s top entertainment news stories including the Thanksgiving weekend’s record breaking box office, “Spider-Man: Turn Off The Dark” lowers the curtains on its Broadway run and the mediocre sales figures of Lady Gaga’s latest album.

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Paul Walker Dies in Car Accident at Age 40
http://www.hollywoodreporter.com/news/paul-walker-dies-car-accident-660798

Paul Walker’s Death: ‘Fast & Furious 7’ Delayed But Won’t Be Scrapped
http://www.hollywoodreporter.com/news/paul-walkers-death-fast-furious-660825

‘Catching Fire,’ ‘Frozen’ Are Hot at the Movies
http://online.wsj.com/news/articles/SB100014240527023….

‘Doctor Who’ Anniversary Special Grosses $10.2 Million Globally in Cinemas
http://www.hollywoodreporter.com/news/doctor-who-anniversary-special-grosses-660553

‘Frozen,’ ‘Catching Fire’ Set Thanksgiving Weekend Records
http://www.latimes.com/entertainment/envelope/cotown/la-et-st-frozen-does-not-chill-at-the-box-office-20131127,0,4420758.story

Sony Pictures Details Budget and Film Slate Cuts
http://www.latimes.com/entertainment/envelope/cotown/la-et-ct-sony-pictures-details-budget-and-film-slate-cuts-at-thursday-meeting-20131121,0,4003114.story

Pixar Undergoes Layoffs Due to ‘The Good Dinosaur’ Delay
http://www.latimes.com/entertainment/envelope/cotown/la-et-ct-pixar-layoffs-good-dinosaur-delay-20131122,0,6910438.story

Fumbled Lady Gaga Release Could Cost Interscope $25 Million
http://www.hypebot.com/hypebot/2013/11/lady-gaga-sales-slump-could-cost-interscope-25m-and-what-that-says-about-the-record-biz.html

Lady Gaga’s Artpop Sells 75% Less In Debut Week Than “Born This Way”
http://www.hypebot.com/hypebot/2013/11/lady-gagas-artpop-sells-75-less-in-debut-week-than-born-this-way.html

And the World’s Highest Paid Musicians Are…
http://www.thedailyswarm.com/headlines/and-worlds-highest-paid-musicians-2013-are/

Turntable.fm To Shut Down: $7M and Celebrity Investors No Match For Music Licensors
http://www.hypebot.com/hypebot/2013/11/turntablefm-to-shut-down.html

Music Streaming Startup Rdio Lays Off Staff To ‘Improve Cost Structure And Ensure A Scalable Business”
http://techcrunch.com/2013/11/19/rdio-lays-off-staff-to-improve-cost-structure-and-improve-business-for-the-long-term/

Spotify Hits a High Note: Valuation Tops $4 Billion
http://online.wsj.com/news/articles/SB100014240527023047917….

Pandora Stops Internet Radio Fairness Act Legislation Efforts, To Focus on CRB
http://www.billboard.com/biz/articles/news/digital-and-mobile/5800772/pandora-stops-internet-radio-fairness-act-legislation

Deezer Music Streaming Is Coming to the US Next Year
http://www.theverge.com/2013/11/22/5132600/deezer-music-streaming-planning-us-launch-in-2014

‘Spider-Man’ to Close on Broadway
http://www.nytimes.com/2013/11/19/nyregion/spider-man-to-shut-on-broadway.html

‘Spider-Man: Turn Off the Dark’ to Close in January
http://online.wsj.com/news/articles/SB10001424052702303531….

A Monetary Autopsy of Spider-Man: Turn Off the Dark
http://www.vulture.com/2013/11/spider-man-leaves-behind-broadways-biggest-bill.html

‘Spider-Man’ Musical on Broadway: Four Lessons Learned
http://www.latimes.com/entertainment/arts/culture/la-et-cm-spiderman-broadway-20131119,0,7659655.story

Katie Couric Negotiating ABC News Exit
http://www.hollywoodreporter.com/live-feed/katie-couric-negotiating-abc-news-659156

Beastie Boys, ‘Girls’ Viral Video in Copyright Infringement Fight
http://www.hollywoodreporter.com/thr-esq/beastie-boys-girls-viral-video-659308

Beastie Boys’ ‘Girls’ Pulled From Viral Ad Amid Legal Dispute
http://www.hollywoodreporter.com/thr-esq/beastie-boys-girls-pulled-viral-660555

Sam Champion Exits ABC News for Weather Channel
http://www.hollywoodreporter.com/live-feed/sam-champion-exits-abc-news-660913

James Franco, Chris O’Dowd Pair Up on Stage in ‘Of Mice and Men’
http://www.hollywoodreporter.com/news/james-franco-chris-odowd-pair-660020

MSNBC Cancels Alec Baldwin Talker ‘Up Late’
http://www.hollywoodreporter.com/live-feed/msnbc-cancels-alec-baldwin-talker-660152

Monty Python Troupe to Reunite for Live Shows
http://www.nytimes.com/2013/11/20/arts/monty-python-troupe-to-reunite-for-live-shows.html

Is Monty Python Still Funny? Troupe Members Want to Know
http://artsbeat.blogs.nytimes.com/2013/11/21/is-monty-python-still-funny-troupe-members-want-to-know/

‘Family Guy’ Fans Protest Death of Brian The Dog
http://www.latimes.com/entertainment/tv/showtracker/la-et-st-family-guy-brian-death-protest-20131125,0,3694745.story

Amazon Launches Online Video Service in Japan
http://www.hollywoodreporter.com/news/amazon-launches-online-video-service-660546

Amazon Floats The Notion Of Delivery Drones
http://bits.blogs.nytimes.com/2013/12/01/amazon-floats-the-notion-of-delivery-drones/

Pitchfork To Launch Print Publication “The Pitchfork Review”
http://www.fastcompany.com/3021979/pitchfork-to-launch-print-publication-the-pitchfork-review

Charter Is Arranging $25 Billion in Debt for Time Warner Cable Bid
http://online.wsj.com/news/articles/SB100014240527023035….

Comcast Seeks Advice on Possible Time Warner Cable Bid
http://www.cnbc.com/id/101220981

Court Throws Out FCC’s Cable Subscriber Cap
http://www.broadcastingcable.com/news/washington/court-throws-out-fccs-cable-subscriber-cap/56420

Time Warner Cable Breakup May Help Sidestep Deal Scrutiny
http://www.washingtonpost.com/business/economy/time-warner-cable-breakup-may-help-sidestep-deal-scrutiny/2013/11/25/c86bf0ea-5614-11e3-ba82-16ed03681809_story.html

Buyer Beware: Time Warner Cable Comes With Expensive Sports Channels
http://www.latimes.com/entertainment/envelope/cotown/la-et-ct-time-warner-cable-lakers-dodgers-20131126,0,5269761.story

National Institute of Justice Gun Violence Report
http://www.nij.gov/topics/crime/gun-violence/

Comments

  • Sarah Moore

    Yes, our technological advancements will irreparably change some businesses. The fallout will be in progress for some time. As far as Deezer, they aren’t just entering a saturated market, they’re one of the bigger players already in it. It’s not like Beats, which is coming out new. Beats already has no chance, but Deezer does because they’re already established and it’s a hard market to break into, not necessarily to expand on.

    Tons of services are out there that don’t get a lot of press, but hang onto their niche markets. I listen a lot to torch music which is great for video playlists, but practically unknown. If a company isn’t depending on the streaming service as their primary income, then they can maintain it longer despite not making profits. It’s the unfortunate reason that while services like Rdio have to cut employees, that All Access, or iTunes radio can last forever… Ah, such is life.