Not since the mid-'90s has there been so much investor excitement over digital music services, The New York Times reports. Web radio service Pandora just filed for an IPO to raise $100 million, while
Europe's Spotify is reportedly in the process of raising $100 in private equity. "And those are just the big fish," The Times notes. "Since the end of last year, at least $57 million in venture
capital has gone to digital music start-ups, ending a recent financing drought and setting up an array of young companies."
What's driving interest in such a tricky industry where so
few companies have succeeded is inexperience. "A number of the investors have not invested in digital music before," venture capitalist David Pakman tells The times. "Usually the ones who have, have
learned over the decade that it's an impossibly hard place to make money." Indeed, even Apple insists that it makes little profit off iTunes, despite selling over 10 billion music downloads since
2003.
Read the whole story at The New York Times »