Assuming Spotify signs artists (or Apple for that matter), will they be willing to upfront costs against touring, recording, production? How would they structure recoupment? Apple could structure a better deal because they can cover mechanical royalties through download purchases. Spotify would be streaming only. The economics would be very, very tight.
It'd be hard for them to do a 360 deal to get revenue from the money making aspect of music (sponsorships and live), unless they also staffed up artist development (touring) and sponsorships/partnerships/biz dev.
Its not as easy as just "signing an artist"
If it was, we'd have already been disrupted by the indies.
I realize it's a complicated question, and that Spotify (or Apple, or any other company we love) couldn't just jump straight in and be an instant success. And while Apple certainly has the cash to cover upfront costs, staffing up, etc, Spotify probably doesn't, at least at large scale.
Are there cases where it would work, though? Bands that stumble upon internet fame are still the exception, but they exist, and it seems like they benefit much less from the visibility and other perks that traditional labels offer. Could a band like OK Go (back in their early days of YouTube success) be better off going directly through a distributor like Spotify, getting less up front, and getting a bigger revenue share? I know a couple of years ago they jumped from EMI (http://okgo.net/2010/03/10/onwards-and-upwards/). Maybe they could have done so earlier?
OK Go would still have to register with a publisher and a PRO if they wanted to see any residuals at all. If they just wanted to bypass music and be a "video" band they'd still have to manage the music bed in some fashion, even if through Tunecore or someone like that.
These "the labels must die" discussions get tedious because not many know what they do. I quit being at a label, but not because I think it should die, just because it was anyhow.
It'd be hard for them to do a 360 deal to get revenue from the money making aspect of music (sponsorships and live), unless they also staffed up artist development (touring) and sponsorships/partnerships/biz dev.
Its not as easy as just "signing an artist"
If it was, we'd have already been disrupted by the indies.