
The metrics behind Spotify’s IPO - erikrothoff
https://blog.chartmogul.com/metrics-behind-spotifys-ipo/
======
ibdf
The article compares Amazon Prime music with Spotify... I'm a prime member and
enjoy many of the advantages it comes with, but Prime Music is not one of
them. It's horrible! A few months ago I thought I would give it a try and only
use Prime Music because... why pay for two services? After about one month of
use, I went back to spotify. The prime player UI is no good, the music
selection is horrible, the music recommendation service never recommended
anything new. Finding new music is hard, finding less known bands is very
hard.

I pay for the Spotify family plan and it has been a great experience.

I will continue to use prime for shipping, storage, and shows. But for music,
so far, Spotify is the only service that checks all the marks.

~~~
aidenn0
After reading so many good things about spotify, I gave it a spin for the
first time this past week. It actually is the best music streaming service
I've used before, but I'm still not going to subscribe.

New albums on CD are nearly universally under $10 now, and used CDs are even
cheaper, so the price of Spotify is more than an album per month. That's a
very steep price, and ultimately I think I'm happier buying 15 CDs per year
than paying Spotify's subscription fees.

I don't see such high royalties are sustainable if Spotify can't be profitable
under them.

~~~
blahman2000
Whoa dude are you serious? You still use CDs?

I think for most people this is a non-starter, maybe you convert them to MP3s
and sync them to all your devices?

Right now I use Spotify and can listen to my music at work, home, or on the go
using my phone. And that's fine with me. I don't pay for Spotify though which
means I have to listen to ads and their mobile experience isn't as good.

~~~
aidenn0
Yes I convert them to MP3s (well ogg) and sync them to my devices. Other than
my bluray player, I don't have a working CD player in my house (my 3 disc
changer separate died a few years ago).

In any event, DRM free MP3s are usually within about $1 of the album price,
and many of the places that sell MP3s have some option to stream from their
cloud storage. I go with the shiny plastic discs because a) I'm a Luddite and
b) some genres of music have audible distortions in mp3 (mainly pre-echo!)
that I find bothersome when listening with headphones.

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cwal37
A minor nitpick in the article, the $12.99 Amazon prime subscription does not
cover their spotify competitor streaming service. I've always thought this was
a bit odd given that it does include a netflix-esque amount of streamable
video content. If I had to guess, I imagine it's all related back to the
royalties situation in music. You do get "Prime Music", but it's not the
Spotify competitor, that would be Amazon Music Unlimited. That service is an
additional $7.99 if you're a Prime member.

eBooks are also mentioned there, but you don't get a huge library for being a
Prime member either. Rather, it's a selection of ~1000 written things (books,
comics, magazines) that is constantly rotating. Kindle Unlimited is another
$9.99/month. You can do the Kindle library thing as a prime member, but that's
one book a month drawing from a similar pool as Kindle Unlimited, which often
doesn't have current best sellers anyways.

I guess props to Amazon for being so confusing in their myriad content
subscription options that the author couldn't get it right. To get the same
kind of all-you-can-consume options that spotify provides across the different
media mentioned it's actually ~$30/month. Still strikes me as odd how "cheap"
TV and movies seem to be in this model. I'm very curious about that now.

~~~
Mr_Ed
Hi, author here!

Thanks for the correction on this -- I'll update the article with correct
info. I'm not a Prime subscriber and the information on Prime benefits are
completely intransparent.

And if I can't easily figure that out, it's unlikely that average consumer Joe
will. The _perceived_ value of each offering is the point here.

~~~
GarrisonPrime
>The _perceived_ value of each offering is the point here.

Ah yes. The creed of American media: The truth doesn't matter. All that
matters is what the masses can be convinced to believe.

~~~
bogomipz
>"Ah yes. The creed of American media ..."

This statement regarding "perceived value" has nothing to do with "American
media", "fake news" truth distorting or even politics.

It's baffling that you have chosen to stake such claims on the author.

Perceived value pricing is actually a marketing strategy. Its used in
factoring pricing for everything from gym memberships, to luxury good and
delivery services.

see: [https://www.investopedia.com/terms/p/perceived-
value.asp](https://www.investopedia.com/terms/p/perceived-value.asp)

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runeb
I don't understand why Spotify hasn't gone the Netflix way and started their
own label to produce and release the music themselves. Their margins are
severely cut by licensing and since the labels hold the rights to the content
they might be convinced to sign better deals with competitors who have other
revenue streams to subsidize a music venture that isn't making money.

~~~
hb3b
The statistics point towards users wanting music from the big four labels.
This may be one of the reasons they have double downed recently on their
discovery products. If they can continue to divert user interest to artists
from less expensive labels, it's a win/win. (Former Spotify employee, have no
idea what I'm talking about).

~~~
overcast
I can't say in my 37 years of life, that I've ever considered what label a
band was on, before I listened to them. I couldn't even name four big labels.
The statistics point that way, because the four biggest, have the most artists
under them.

~~~
asteli
Labels are a great way to find new music. Smaller ones typically have much
tighter, more strongly thematic curation. Often, if I really enjoy an artist,
I'll browse the rest of the labels offerings.

This doesn't work for Sony BMG of course, but consider a label like Ghostly
International. Come for Tycho, find Com Truise, Lord Raja, Gold Panda,
Shigeto, others).

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ArmandGrillet
As a customer since a long time I agree that Spotify should become a platform,
but I doubt they will succeed due to how they shipped previous features.
Anyway, the three features I want:

\- Lyrics, and integrating Genius for 1/100th of the tracks in the catalogue
is not enough.

\- Concert tickets, in a smart and transparent way. A musician I'm listening
to a lot is coming in Germany? I want a notification, a way to share it with
my Spotify friends, and a way to pay in one click.

\- Listen to songs that are only available on Spotify. I am so pissed off by
Apple doing that and I think it sucks, but Netflix did it and seeing exclusive
versions/remixs/concerts via Spotify would make the platform incredibly
valuable to me.

Sounds hard? Well doing an IPO and competing against Apple, Amazon, and Google
is not easy. The smart playlists are great, the brand is valued, time to go
further.

~~~
sushisource
Number 2/3 sort of already exist. At least, the notifications part for
concerts, and the "Spotify singles" for the exclusive tracks (it's not really
the sense you meant, though).

Being able to buy the concert tickets simply and easily would be killer
though. Especially if it meant I wasn't paying $14 "convenience fees"

~~~
kingosticks
For #2 if they could partner with someone like Dice (possibly UK only) that
would be great. Really easy to use app, no fees and the QR ticket only appears
a few hours before the gig to prevent touts. I think you can even return
tickets if there are people on the 'waiting list' although I've never tried
that.

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gizmodo59
Can anyone give some insights on how it compares to Apple Music or Google Play
Music.

With 9.99 you also get YouTube Red and the selection for play music seems to
be huge when compared with Amazon Prime Music (At least enough for me). If I
don't have a song in play, I can use YouTube app and it plays in background.
This is important for regional songs as Spotify does not have a huge library
for non English songs but YouTube has almost everything. I agree that the
quality is not that great with YouTube, but that's something is not of a big
deal for me. Does anyone feel like this?

What's your metrics to decide between Play, Apple and Spotify?

~~~
majormajor
Play Music's apps are very immature and half-baked feeling compared to the
alternatives.

Apple is better in that regard, but its app distribution is massively limited
compared to Spotify or even Google Play.

~~~
mauserx
I agree. Spotify is very strong here in Europe and it's super convenient to
follow friends who are better than finding cool songs than I am.

I was a free user for a long time and got the subscription last Christmas. You
can tell they really spend time on UX. Clear examples of this are the running
playlists that adapt to your speed. We can't really expect Google to match
that, it's Spotify's core business after all.

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nailer
Spotify doesn't make the most amount of money for the record companies by
plays. It makes most of the money for record companies by having sold them
stock in Spotify. The Needle Drop talked about this recently - artists could
have gotten more money, but record labels wanted equity positions in Spotify
rather than higher fees.

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maephisto
>> A $12.99 Amazon Prime subscription gets me streaming music, streaming
video, e-books, fast shipping and a whole host of other benefits. A $10.99
Spotify subscription gets me… well, Spotify.

I think on pricing Spotify shines with the Family plan which reduces the cost
significantly. Plus, those $12.99 only gets you the Spotify free equivalent
from Amazon. The Amazon Music Unlimited is another $7.99

~~~
simias
Here in Europe it seems to be 9.99euros for Amazon Music Unlimited, which is
exactly the same as a Spotify subscription (not even counting the Family plan
you mentioned).

What's odd is that my Amazon Prime subscription already gives me unlimited
access to Prime Videos without additional charge, I'm surprised that they use
a different business model here.

