>"One strategy that makes sense to me is going for the Netflix model - become a "record label" themselves, sign some quality artists, help create quality music, win some grammy's and then you rid yourself of those pesky licensing issues."
I think if you were at the mercy of the traditional record industry for licensing and you went an signed an artist to your label whose contract was up with say Warner Bros Records you could expect some pretty unfavorable terms in licensing content from Warner Brothers in the future. This is just one example but its a slippery slope.
It would certainly be much better for artists to get paid directly from the streaming provider, no doubt about that. But I think if you are out promoting that business model you are going to find it harder to license content from people business model if based on the "old way" of doing things. I think would have to forgo licensing from them almost entirely and carry only original content. This is more or less the model that is/was Tidal. I don't think has worked out too well for them.
In this regard there has been some criticisms against most of the current streaming providers as simply "propping up" the oligarchy of the big 4 record labels.
But to GP's point - Netflix put themselves in the same situation in regards to their original content. While it has impacted their selection of titles from the companies they compete with, it wasn't in a catastrophic way.
I understand what you're saying and Netflix has been pretty spectacular in that regard. I think there might be a couple of differences between Spotify and Netlix though.
Record contracts are exclusive. Beyonce can't go and record an album for some other records label whereas in the Netflix model those actors aren't exclusive to Netflix. They are free to go out and make movies for Universal for 20th Century Fox when their series wraps for Netflix. As such it doesn't threaten the business model of the studios in the same way Spotify becoming a record label and paying artists directly from streams might.
The other difference I think is that consuming Netflix tends to be a concentrated experience in that you sit down to watch a movie or else you binge watch during a whole Saturday while the weather is crap. Music on the other hand is more passive. People play music pretty endlessly - while at work, on the train, at the gym. I think it would be much harder to be majority original content streaming service with music while keeping your existing subscribers satisfied.
The practice of "exclusive windowing" does not mean that Apple is becoming a record label. That article is about limited exclusives. I didn't see anywhere in the article that mentioned Apple becoming a record label.
I think if you were at the mercy of the traditional record industry for licensing and you went an signed an artist to your label whose contract was up with say Warner Bros Records you could expect some pretty unfavorable terms in licensing content from Warner Brothers in the future. This is just one example but its a slippery slope.
It would certainly be much better for artists to get paid directly from the streaming provider, no doubt about that. But I think if you are out promoting that business model you are going to find it harder to license content from people business model if based on the "old way" of doing things. I think would have to forgo licensing from them almost entirely and carry only original content. This is more or less the model that is/was Tidal. I don't think has worked out too well for them.
In this regard there has been some criticisms against most of the current streaming providers as simply "propping up" the oligarchy of the big 4 record labels.