online audio streaming platform Spotify is currently in negotiations with Warner Music and will begin talks with Sony and Universal urging the companies for substantial price breaks to help their short term survival according to The Verge.

Interesting statistics show that while Spotify has amassed a following of 5 million paying subscribers and 20 million total users worldwide, the business model they use is still unproven.

Spotify’s current profit split goes
– 70% of revenue is directed towards licensing fees,
– 20% to customer acquisition
– and the remaining 10% to leftover company cost.

The report suggests any attempts by Spotify to plead lack of fund are likely to be met with skepticism by the recording industry. Over the last couple of years, music acts have reported receiving smaller pay cheques from the streaming service than iTunes. Bands and singers including Coldplay, Adele, and Taylor Swift, have refused to ride the Spotify wave and streaming services .

It is unlikely that Stockholm-based company will completely collapse and deals are expected to be done between select record labels. Additional ad support is one way that the UK-based outlet could reasonably heighten its own profits, although some instances may lead to paid customer subscriptions. This has been an interesting development after BBC last year reported of in excess of $1 billion earnings from streaming music companies. Would you be willing to pay for Spotify?