We noted in a March report that "Weeks after Taylor Swift's move of departing ways with Spotify, the Wall Street Journal reported that "Now that fans have had a taste, record labels are feeling less generous as they head into their next round of licensing negotiations. Some plan to use their leverage to start cutting the free access. One major-label executive said he regretted ever having agreed to allow licensees to offer any on-demand listening features free. "In hindsight we made a mistake," he said. But now a dirty little music industry secret has come to light and it should be enough to have the music industry investigated.

While there's been a lot of noise generated by the European Regulators and the DOJ investigating Apple to ensure that they don't get an unfair deal for their new streaming music service, they've apparently chosen to close their eyes to a dirty little deal between Spotify and the music labels in a move to protect free streaming music after publicly trashing it for months in the press. The dirty little secret was revealed by Ministry of Sound chief executive Lohan Presencer.

Ministry of Sound chief executive Lohan Presencer is no fan of music-streaming service Spotify, but in his latest public speech he reserved more criticism for the major labels that license it.

Presencer noted in his speech that "As we have seen from the Sony WikiLeaks emails, they are incentivised to deliver short-term goals. So what they do is all driven by that … and the decisions they have made have completely fucked everyone up the arse."

The Dirty Little Music Industry Secret

In Presencer's combative speech he accused the major labels of being reluctant to license music services that adopt different models to Spotify, to protect their investments in that company ahead of its anticipated IPO.

"Clearly there are other models, but they're not interested in licensing those other models. The services all exist, they're all out there … but when they go to the big content owners and say 'we've got a different model' the big guys go, 'hmm, we don't want to damage Spotify because we've all got a piece of that … so the only way we'll consider this is if you give us a massive advance or an equity stake, and we'll give you a one-year license'," he said.

Presencer concluded with this: "Why would anyone want to start a fucking music service?! Why would anyone want to go and negotiate with those beasts?"

If what Presencer is saying is true about the music industry getting a piece of the action at Spotify through their IPO, then the focus of these recent investigations into Apple's activities should cease and turn against the music industry based on Presencer's testimony. Who's getting the better deal under this new light? It isn't Apple.

Though in other news, there's a reported move to push Spotify into restricting their freemium service to the first three months and then customers will have to buy into a paid tier. That would be a positive move. However, a Spotify spokesperson clarified this point with 9to5Mac that there's no such move at all to end their freemium services. So Presencer appears to have gotten it right. You could read more about Presencer's speech at the Guardian.

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