Social Media Newsfeed: Spotify Losses | British PM on Twitter | Facebook Suit

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Is Spotify’s Business Model Broken? (CNET)
Spotify’s financial performance in 2011 was abysmal. As revenue increased 151 percent from 2010, the on-demand streaming music service saw losses widen 60 percent for the same period, according to documents posted by PrivCo, a company that sells data on non-publicly traded companies. BetaBeat Virtually every new dollar of revenue went directly to music companies as royalty payments, evidencing the fact that the more members Spotify adds, the more money the company loses. This is a clear indication that the online licensing fee/royalty model is increasingly restricting Spotify’s ability to generate sustainable margins using its freemium model. The Next Web Spotify’s 311 employees grew salary costs 173 percent year-over-year in 2011, outpacing revenue growth, according to PrivCo. Business Insider Unlike Groupon, Spotify can’t just trim its marketing spend to cut its losses. It either has to completely change its business strategy, or get much better at its business. TechCrunch In related news, Warner Music Group’s owner Access Industries and previous investor Idinvest are investing $130 million into music streaming startup Deezer. Even though the company is doing well in its country of origin, France, it is still at the very beginning of its international expansion.

Twitter Welcomes UK Prime Minister @David_Cameron (AllTwitter)
In a move that further underlines Twitter’s growing importance as a credible platform to raise awareness and connect with an ever-widening audience, British prime minister David Cameron has sent his first-ever tweet @David_Cameron. It’s certainly been a long time coming – Cameron’s Twitter profile was set up way back in January 2010. The New York Times “I promise there won’t be ‘too many tweets …’ ” he wrote in his first message, as if quoting someone. Cameron, who had already attracted more than 80,000 followers by Sunday afternoon, clearly had not reckoned with the sharp, anarchic sense of humor that Twitter can unleash, particularly among the annoyed and the restive. The Huffington Post UK
Since joining Twitter, the prime minister has already received some rather negative tweets (many of which are not printable), including from Labour’s shadow health minister Jamie Reed. “Ay up Dave lad (northern) why do you keep telling lies about the NHS?” he said.

Facebook Asks Court to Dismiss $15 Billion Privacy Suit (CNET)
Facebook has asked a federal court to dismiss a $15 billion privacy lawsuit because the Facebook users suing the social network didn’t specify how they were injured by the company’s actions. The suit, filed in May, accuses Facebook of violating user privacy by tracking which Web sites the users visit even when they’re logged out of Facebook. Reuters In related news, Joe Lockhart, Facebook’s head of global communications and a former press secretary for President Bill Clinton, is leaving the social networking company, Facebook said. Lockhart, who is the latest high-profile executive to depart Facebook following its disappointing initial public offering in May, is leaving 15 months after joining the world’s No. 1 social network. Today A family returned from vacation to discover photos on Facebook of a wild party that had taken place in their home while they were gone. “I’m looking at this saying, ‘This is inside my house,’” the homeowner said.

Social Media Among Threats to Greeting Card Makers (AP)
Once a staple of birthdays and holidays, paper greeting cards are fewer and farther between — now seen as something special, instead of something that’s required. Pete Burney, Hallmark’s senior vice president who oversees production, says “competition in our industry is indeed formidable” and that “consumers do have more ways to connect digitally and online and through social media.”