Via: paidContent

From the record labels’ perspective, on-demand free music services such as We7 and Spotify have yet to deliver the goods. They haven’t made a dent in illegal downloading and they haven’t converted enough new consumers to pay for digital music. (Spotify’s 250,000 paying subs is an encouraging start, but is just 3.6% of its 7 million total installed base.) And there is a very real threat that these services are educating mass- market consumers that music online is free.

It’s one thing having spotty teenagers downloading from BitTorrent casting nervous glances over their shoulders, but having their parents stop buying CDs in favor of streaming Spotify into their living rooms is another proposition entirely. And to top it off, all these services have yet to learn how to make ad-supported music pay. (Pandora is a notable exception, but it took many years to finally hit operational profitability in 2009 and it isn’t even fully on-demand, so has lower rights costs.) [Read More]