Spotify ‘doing a Netflix’: is Daniel Ek’s platform already too big for the labels to stop it?

The following article comes from Midia Research founder and respected industry analyst, Mark Mulligan. After witnessing an increasing encroachment from Spotify into the traditional territory of major and independent labels of late, Mulligan (pictured inset) ponders whether those rights-holders now need Spotify so much, their power to prevent the service from becoming a ‘label’ is diminishing. UK-based Midia, which offers research, data tools and subscriptions to a wide range of influential music industry players, has been following the Spotify story from day one.

Spotify’s Daniel Ek is betting big on developing a ‘two-sided marketplace’ for music.

With the company’s market cap on a downward trend despite strong growth metrics, Ek might find himself having to play up the disruption narrative more boldly and more quickly than he’d planned.

Investors are betting on a Netflix-like disruptor for the music industry, rather than a junior distribution partner for the labels. And this is where things gets messy.

Whereas Netflix can play individual TV networks off each other and can even afford to lose Disney and Fox, each major record label currently owns enough market share on Spotify to have the equivalent of a UN Security Council Veto.

So when Spotify announced it was going to let artists upload music directly and then added distribution to other streaming services via DistroKid, the labels understandably smelled a rat. To the extent they’ve even threatened to block access to India.

Spotify’s balancing act may be reaching a tipping point (mixed metaphor pun intended), but it may already be too late for the labels to act.

Here’s why…