Castle writes: “Let’s be clear–companies like Spotify don’t get into business to eke out a profit. They get into business to get their snouts into the trough of IPO stock as fast as possible and share that wealth with as few people as possible.”
He suggests that Spotify’s current payout system – distributing a portion of its revenue to artists pro-rate – is a “grand deflection” from the actual, escalating material worth of the company.
Spotify has deliberately set its loss-making business model towards rapid growth, argues Castle, keeping its average subscription price (via ARPU) low. This, he says, ensures a “a race to the bottom on subscription price and to the top on share price”.