Music streaming service we7 is announcing that it has had its first month where all of its on-demand music played in the UK was paid for in full from advertising. If sustainable, it’s good for the music industry as well – suggesting that ad-supported streaming is now a valid business model. It’s notable that leaders in the field – Spotify – still aren’t a profitable business. We7 is different from Spotify in that no sign-up or app installation is required.
We7 claim that they uniquely have got the combination of ad frequency, ad sell-through and ad rates right to make the model work.
In their model, 1 million plays of a song on we7 would generate a range of payments to the music industry of between £2,000 to £4,000, figures significantly higher than in other services, according to them.
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