Disclaimer: I worked for a Spotify competitor in the past, so i have a pretty solid understanding of how the business works.
I think it is a bad investment for one simple reason: Spotify purchases its main product (music) from a oligopoly. I'd estimate that 95%+ of the tracks streamed (by total playtime) are from one of the 3 major music labels: Universal, Sony or Warner. That includes sublabels that in some cases may have a seperate deal with Spotify, but at the end of the day are still part of the big 3. Imagine you are a Sony executive, walking by a news stand and the Wall Street Journal Headline is "Spotify Q2 earnings 30% up". What are you gonna do? You will squeeze them, make them pay, just enough that they survive. And Spotify has zero negotiation power here. If Sptify fails to have a deal with any 1 of these 3 labels, they become useless overnight. People will switch to Apple Music, Amazon PrimeMusic, Tidal or any other service quickly. It doesn't matter if Spotifys app is slighty better than the competitors software if they lack 1/3 of the music.
All Spotify needs to push the big labels back on their heels is to sign a few top 40 artists of their own.
I might be wrong but I remember reading something like 90%+ of streams on music services are of songs currently on the charts. Capture the popular culture like Netflix has and the labels will start rolling over on rates.
I would say that the jury is still out on that. Lack of Blockbuster movies has always been one of the weak points of Netflix, and they are still in the process of getting started with producing content there (with "Bright" being one of the first of their movies trying to be a Blockbuster).
On the other front, they are highly dependent on existing content that people love, and more and more of that is being owned by Disney and pulled from the platform as they are gearing up for their competing service. If they also fail to keep the other big right holders on the platform then soon all they have will be Netflix content (which is probably their 5-10 year plan anyway since that makes them more profitable).
I'm not sure a Netflix Originals-only catalog will go over well with the subscriber base. Despite some of their first original content having some good hits (e.g. House of Cards), I think over time their hit-rate pretty much adjusted to the levels of traditional cable channels like HBO/Showtime with a lot of mediocre content.
Yes, in the long run producing their own content will be cheaper. Mid-term buying proven content will probably come out at around the same price as producing new content that the viewers may or may not like. They have better viewer analytics and better ways to globally monetize the content than traditional content producers though.
Netflix sees that math every single month, and charge more that $5, and can always raise their rates again. They have something better than cash, they have recurring cash payments.
Also, Netflix is running less debt than its hollywood contemporaries who have no such subscriber base, no industry leading tech, no well-oiled IT machine, and no massive pool of user data showing the intensely valuable and intensely detailed interactions between hundreds of millions of people and their content with a decades head start on the competition.
No way that's going to work. Music is VASTLY different from video. In video it takes more time and resources to produce each one and replays are rare. In music everything is super cheap to produce and replays are off the chart.
If Spotify became their own label and signed 100 of the top artists, their old songs are STILL with the previous label and will likely never leave. Spotify still NEEDS those songs or it's SOL.
As I pointed out in a sibling comment, I think Netflix actually has the same problem. There is a significant presence of long-running shows that people love to watch on Netflix: Friends, Breaking Bad, Modern Family, How I Met Your Mother, etc.. A big favorite "It's Always Sunny In Philadelphia" just left the catalog - presumably due to the acquisition of FX by Disney - and "Archer" will likely soon follow for the same reason.
A lot of those are not new and people still watch them (either to catch up on a missed cult hit or to rewatch their favorites), and the will continue to do so for the next 10-20 years. As long as that's the case Netflix also has to continue to make deals with the existing rights holders or substantially shift their core offering.
Is that really true though? As video content gets older it usually gets watched less, becomes cheaper and gets re-aired everywhere it can. Once you watch it many don't re-watch. I'd love to know if there were statistics on this either way!
Music, on the other hand, doesn't show its age nearly as much and old music is constantly replayed even in the latest TV shows and movies. Seems to be music is almost timeless whereas video is not. But, again, I'd love to see some data around these topics to valid (or invalid) what I think to be true.
> As video content gets older it usually gets watched less, becomes cheaper and gets re-aired everywhere it can.
That has been the traditional behavior in scheduled broadcasting, but I'd wager that the lifespan of shows is significantly extended when they are available on-demand. In general, there are probably a lot of social shifts/effects related to video consumption that appeared with Netflix for the first time (e.g. binge watching), each with their own economic effects.
If less people listen to the radio, AND less people buy music directly through itunes or whatever, the only option the big 3 will have is to work with streaming services.
Go look at the most played songs on Spotify of all time. It’s not the Beatles and Michael Jackson’s back catalog. We’re talking Chainsmokers and Imagine Dragons and Ed Sheeran.
The catalog deep dive is where streaming services offer unique value, putting a hit on repeat is what people could do just as well by buying the single/licence.
There was a great article posted here some time ago, I think, that likened the algorithmic discovery "products" of Spotify plus the effortless access to individual songs as creating a sort of thin spread of musical diversity (the auther's e.g. Muzak), generic and accessible enough to be replicated by almost anybody. A great example of this, today, is Cardi B – this is a person who honed her personality through social media and reality TV, linked up with a music camp, and is now the third person in history with her first 3 commercial songs in the Billboard Top 10. Her biggest hit, Bodak Yellow, uses a flow lifted from another rapper named Kodak Black (and she has done this multiple times). The thing is, though, she was groomed to be a hit.
Once Spotify achieves a critical mass of listeners that trust their algorithms, and rely on their tastemakers to deliver fresh music, Spotify could easily slot in musicians that they themselves hold the contracts for. Their pockets are just as deep as a record label, and their listener data is far richer. I have no difficulty imagining that Spotify could replicate a Cardi B-esque pop zeitgeist. "Tastemaking", even if the word makes you cringe, is what will define the winners and losers of the streaming wars. It's why Apple hired away Zane Lowe – an relatively bland DJ personality, but an incredibly gifted ear and a cache of trust – and why Spotify relies more on Playlists and Discovery every day.
Remember, they didn't even have the Beatles until Christmas 2016! That shows a decent picture of how much the majority cares about back catalogues. I don't think it's unreasonable to think that Spotify themselves couldn't produce a top 10 rapper, or a top 10 country singer, or a popular podcast, just based on the level of engagement in their playlists.
You mean become a competitor to the 3 labels for whom they depend on for their business? Not a chance. If the labels see them as competitors instead of customers they will pull their card and not renew their licenses.
Chance The Rapper is one of the biggest names in hip hop, and a relatively big personality in pop culture as a whole. He's fully independent. He signed an "exclusive" 2-week-long distribution deal with Apple for his last album, Coloring Book. Apple got exclusive streaming rights (for 2 weeks), and the artist got $500,000 cash – not an advance – as well as free marketing via Apple. This is the type of deal and the type of artist that will start changing things for the better.
There is a great report published by stat trackers BuzzAngle Music from the past year. Here are some important numbers:
• Song Consumption for 2017 YTD was up 29.5% over 2016 YTD (1.5 billion song project units in 2017 YTD vs. 1.2 billion song project units in 2016 YTD).
• Audio streams reached 179.8 billion, up 58.5% over 2016 YTD.
• Subscription streams grew 69.3% and accounted for 78.6% of total audio streams in 2017 YTD, up from 73.6% in 2016 YTD.
• Overall album sales were down 13.9% compared to 2016 YTD (74.0 million in 2017 YTD vs. 86.0 million in 2016 YTD).
• Digital album sales in 2017 YTD were down 24.3% over the previous year (34.5 million in 2017 YTD vs. 45.6 million in 2016 YTD).
• Song sales (downloads) in 2017 YTD were down 23.8% compared to 2016 YTD (313.3 million in 2017 YTD vs. 410.9 million in 2016 YTD).
So now say you're a Sony exec and you're looking at these numbers. Can you afford to have ANY of your top talent pulled from Spotify? Consumption and streaming are rising and pure sales are falling. Megastars like Taylor Swift and Ed Sheeran are immune from these trends, basically, but if you want to stay culturally significant you will soon need streaming more than streaming needs you. That's my opinion.
Really? Name one artist that Spotify has broken exclusively.
>"Chance The Rapper is one of the biggest names in hip hop, and a relatively big personality in pop culture as a whole. He's fully independent."
That's great but until there are enough Chance the Rappers Spotify needs the big 3's catalogs.
I'n not sure why you felt compelled to list all those statistics, nobody is suggesting streaming hasn't grown in popularity.
>"Can you afford to have ANY of your top talent pulled from Spotify?"
Yes you certainly can. The streaming markets has no shortage of players now - Amazon, Google, Apple, Pandora, Deezer etc. Spotify needs the labels more than they need Spotify.
You're really gonna have to go easy on me and realize I'm using the name Spotify as a means to blanket address all streaming services. Artists break on streaming almost exclusively these days, and I feel like you are with me on that. But in the interest of specific artists:
Spotify's playlist RapCaviar catapulted rapper Lil Uzi Vert from the underground into the stratosphere:
“XO Tour Llif3” also made history on the May 6 Billboard Hot 100 as one of five hip-hop songs in the top 10, only the second time that Billboard’s preeminent chart featured five rap songs (Kendrick Lamar’s “Humble” was No. 1; Lamar’s “DNA” No. 4; Future’s “Mask Off” was No. 5; Kyle’s “iSpy” featuring Lil Yachty No. 6; and “XO Your Llif3” No. 10). Strikingly, these songs were getting little to no airplay on the nation’s hit-driven radio stations, traditionally, along with sales, the most powerful factor in determining a song’s Hot 100 placement. “Let’s be honest,” says a top major-label executive: “No cool kid is listening to top 40 radio.” Instead, those kids are glued to streaming services."
An underground hit on SoundCloud first, and then Spotify single-handedly turned this kid into a superstar. Lil Uzi Vert became one of the hottest rappers of 2017 due to Spotify's featuring of his single on a highly influential in-house playlist.
And more about streaming breaking artists, in general, from the same article:
"And in numbers that sometimes strain belief, users are opening their Spotify or Apple Music apps and streaming hip-hop and R&B tracks at nearly twice the rate as the next most popular genre (rock), according to the research company Nielsen."
>Amazon, Google, Apple, Pandora, Deezer etc. Spotify needs the labels more than they need Spotify.
People don't subscribe for the catalogues. The catalogues between services are so similar as to be completely negligible. If you pull your catalog from one service, you don't hurt the service you hurt yourself – all those subscribers simply won't listen to your music. Those are your customers now, whether you like it not.
I guarantee this is how a conversation goes between two people, one with Apple and one with Spotify, when talking about a new song rising in popularity:
A: Hey, did you hear That New Song by Artist?
B: No, is it on Spotify?
A: Nope, they are a Sony artist and only on Apple now.
B: Oh, okay, have fun.
Artist – That New Song now has 0.5x listenership. Meanwhile, Universal is still streaming on both services and will completely own the charts.
Labels aren't in competition with streamers, they are in competition with each other. If one major pulls their catalogue from 1 of the big streaming services, they will lose any semblance of relevancy as now the other 2 major labels will own all charts and social listening. That's IMO.
Tell that to my wife who has seen every Office episode at least 20 times.
Netflix has this problem too but they “solved” it by making their own content. Amazon are Google are doing the same thing. That’s the direction I see Spotify going, though I wonder why Apple hasn’t done this yet.
Making their own content for video has the advantage that most people are OK with opening a new browser tab or an app to watch a specific movie or show.
With music, however, you don't want to run multiple conflicting music players, especially when they don't sync up playlists and seamlessly work together.
I wonder how that will pan out. It's a significant difference.
From my perspective, all the streaming services should be working together to create a healthy marketplace for independent music, and providing every opportunity they can for musicians to avoid signing a big-four contract. If Warner and Sony, and UMG get their act together and create a joint venture streaming service that's the exclusive host of the content they own, Spotify, Google Music, and Apple Music are screwed.
Unfortunately for music, the exclusivity has started to show up in some cases. Artists that own the Tidal service don't allow any of their music on competing services, and Apple has been signing contracts with musicians to have new content show up on their service several months in advance before it does on other services (like Jay Z and Kanye).
From Netflix subscriber numbers, it's also not clear that the lost content has dented their subscriber retention at all. The talk among my friends centers much more around new Netflix originals (or even Amazon/Hulu originals) than around back catalog stuff on Amazon or Hulu. I don't understand why -- I'm utterly uncompelled by 95%+ of what they're putting out, since I don't have the motivation to deeply investigate new Netflix shows/movies every week, and however they're advertising, it doesn't really reach me -- but it's what I see happening, much to my annoyance.
If they sign on 100 top artistes, it will devalue the portfolio of music held by the top 3 - for reasons you explained. Thus, the top 3 are incentivized to collaborate with Spotify.
I can't speak for grooveshark or rdio, but as far as I know soundcloud still exists. I just added a song there and listened to some other stuff a week ago. Did I miss something?
IME, lots of people find new music by genre/mood/etc. curated or “like this song/artist” algorithmic stations in streaming services, not terrestrial radio.
But it looks like the data from other recent sources are mixed, with different surveys posting widely varying data, consistent in the direction of change from radio to streaming) but not what the current leading discovery sources are or even the relative placement of streaming vs. radio.
It's a more limited piece that only talks about 15-19 year olds, which is a far smaller audience than kingraoul3's link. kingraoul3's link has data on ages 12 and older.
and personally, unless spotify continues to have the vast majority of the music i want to listen to, i won't continue being a subscriber.
Netflicks is creating there own content which would mean spotify would need to create new bands instead of sign existing ones which most likely would fail because they are all under contract.
Serial TV is consumed like a novel, as long as the next episode is available, the availability of everything else is unimportant. Music is consumed in a much more random access pattern, like a lexicon: if the letter M is missing, it's broken. ("You want that particular song by Morrissey? Sorry. Be sure to check out these five Spotify Originals that have also been tagged with #sad" - no, people won't be willing to pay for that)
Netflix worked hard to change that model by figuring out what people liked to watch and generating high quality content in the patterns they saw. Turns out, now everyone watches whatever show Netflix puts in front of them.
Do you think it's possible a similar phenomenon could happen for music?
I can tell you that since signing up for Spotify Premium, I've certainly been exposed to more new artists that I like, based on their recommendations. Since their library is currently still extensive (like how Netflix had a lot more movies back in the day), I'm very rarely looking for a song they don't have. I can imagine a world where the content holders get more scared (although that would be an impressively delayed reaction) and thus Spotify is pressured out of contracts (just like Netflix was). I'm guessing that Spotify is betting that if that is the case, they can rely on the fact they've been changing their listeners tastes to survive.
An "original content superspotify" would have to dominate all channels to ensue that customers are rarely overcome be the desire (and the resulting dissatisfaction) for third party music, or restrict themselves to the subset of the market that is never exposed to channels not under their control. Both of these options are what I would consider a likely base for economic success.
Let's take a second here. What will happen if Spotify signs new artists and effectively becomes their own record label?
It will start off normally, but eventually (or possibly from the start) Spotify will not allow this music to be streamed anywhere else. It will be exclusive to Spotify, the same way Netflix has done with their originals.
Now what happens? Users are forced to pay for multiple music streaming services, just as happened with the video streaming industry.
This is already a huge burden on users of video sites (and makes piracy a much more appealing option), but is not even acceptable in the music industry. Users create playlists with their own songs, and will want specific songs.
Even with your 90% statistic, which may or may not be true, the other 10% is still very important. I'd imagine that hit songs are streamed more often comparatively but older songs are more important.
Hopefully this fracturing doesn't happen, but if so (as I said) piracy certainly looks more appealing. Especially with Google Play Music allowing you to upload your own music..
The other week, my kids were watching TV and my wife and I were in the kitchen and one of them yelled out, "Mom, something popped up on Netflix saying the price is going up. What should I do?" My wife and I said the same thing instantly: "Just hit okay." We didn't even know what it went up to...hell I don't even know what it cost before. Pricing power is a helluva thing. Why does Netflix have this power? Because people love it. Because it's a part of their lives. Because people are habit-forming. And Spotify fits this mold pretty well...maybe not as strong as Netflix but still impressive. I think there are millions of Spotify customers out there [raising hang] who couldn't fathom going back to pre-2011...it probably makes them hyperventilate. Spotify could probably charge 2-3x what they charge today and I'm really not sure it would affect subscriber counts.
Remember a couple years ago when Amazon raised the annual Prime fee from $80 to $100 and no one cared? Yeah, kinda like that.
Buying from an oligopoly probably won't matter much here. Apple quickly blew those businesses up in the 2000's. The other problem is that the music industry suffers (like many other industries) from the 80/20 rule: a small group of artists are responsible for the vast majority of the profits. (Actually, I think the music biz is even more lopsided) It creates a weird dynamic for the labels and ultimately gives purchasers like Spotify more power. Consumers don't know anything about music labels - maybe not even their names - but man do they LOVE Spotify. Those kinds of things tend to be good investments.
If Spotify started charging $15 instead of $9.99 I wouldn't care, I would still pay. They are simply the best music streaming service out there IMO.
I payed for Google Music for a bit a while ago and I hated it and switch to Spotify. The experience was awful. I'm also pretty sure that Google Music rips audio from Youtube in certain cases which makes the audio quality terrible.
It's always so interesting how people can have similar experiences but come out with completely different perspectives. For me, the Google Play Radio feature is the most important thing they have. It's like a Pandora that doesn't play you the same three songs over and over. When I would try and use the radio feature on Spotify it would play music that was not even close to the original other than it maybe being in the "alternative" category.
Also looks like Zhu is coming to town Next week. Might have to grab some tickets.
I say eventually, because it's conditional on you using the service to seek out a variety of music you enjoy, and also on providing feedback via thumbsup/add-to-library actions. Try this for a month and you'll get good recommendations that continue improving over time.
Later I found out they would use user uploads in their catalog (when legally able), so it sounds more likely that someone uploaded a bad copy that was shared, rather than Google ripping music from youtube.
Can't help but feel that you're projecting your personal love for spotify onto others.
The big difference is Apple has its own ecosystem, Amazon and Wal-Mart sell a lot of different stuff, Netflix has a TON of original shows to differentiate itself from Hulu and others.
Spotify? They literally offer the identical catalog of music as everyone else. Literally. Sure their apps may be slightly better but who cares? If they raised their prices why not move to the more native solution your platform offers for cheaper? Google Music, Apple Music, Microsoft Groove (lol), Amazon Music; they all offer the same damn thing.
I haven't tried Apple Music and Amazon.
Spotify on the other hand has a decent desktop app available on Windows, macOS and even Linux. Their mobile app is great, too. They have brand power, a UI that a lot of people like and their AI-based playlist engine is amazing.
Maybe, just maybe, Spotify is actually really great and customers love it.
This reminds me of people debating Apple vs Android circa 2012.
If you're gonna ask me to re-create all my playlists and invest the time to train the recommendation engine, your client better be damn good. Otherwise what's an extra few bucks a month for not having to bother relearning shit? $10/month difference would probably get me thinking, though...
- Seamless user registration and free trial that comes with automatic recurring payment. You'd be surprised how easy it to get $5 monthly out of android/apple account without people noticing.
- Bots, lost and fake accounts
- Arrange statistics generally speaking and careful wording. "subscribers" doesn't distinguish between free trial, inactive accounts or long term regular users.
There are plentiful ways to handle PR however you like. Only the insiders really know what's happening inside a company.
I am making the argument that a company saying it has millions of users and is growing is not enough to judge of its current and future situation.
I canceled the Google one because changing over was too much effort.
If I change password manager there are scripts. If I change browser there's addons for the other browser as well. [...]
I did. Apple Music still has one major selling point: They own iTunes so anything on iTunes is on AM. For spotify and other streaming services you still have to wait a couple hours to a few days for something to appear on the other streaming services
That being said I moved back to Spotify after a year because of how awful and buggy the UI in AM is. If Apple Music could improve the UI and fix the bugs that have been about for years they could really do well. But I have my doubts as to whether that will ever happen
You and your wife both know (subconsciously at least) that people will switch to HBO, Hulu, or any other number of services if Netflix gets unreasonably expensive. It's broke college students that buy Netflix the most, and they would have to get rid of their biggest set of subscribers to raise prices significantly.
"Unreasonably" is the key word there. What is unreasonable? I think that for the vast majority of subscribers, they get FAR more than $10/month in value (or whatever it costs). Cable costs something like $100/month and it's arguably far worse of a product. Is $50/month for Netflix unreasonable? For some I suppose, but for most I'd be willing to bet no. Remember Ballmer saying no one would pay $500 for a phone? :)
And he is right. A smartphone is more than a phone. How can Netflix be more than a video player? One way seems to be to become a producer.
Back to Spotify: How to be more than a music player?
Roku is the opposite side of the same strategy: everyone keeps buying them even though their interfaces and app ports are generally less polished, the hardware often less capable, than much of the competition. It's offset by being simple and well-understood (ever see someone try to use that Apple TV remote touchpad for the first time?) and by running pretty much every TV/streaming app out there.
The idea that a person can create and maintain a fan base of millions without all that is attractive but infeasible.
Chance the Rapper might disagree (as, to a lesser extent, might Jonathan Coulton.)
Artists also make a lot of their money by licensing their music, or concerts, which are big logistical problems full of middle men. Big labels also give you a lot of PR and visibility.
Spotify on the other hand, doesn't have the issue of content being removed from it in the same way. Additionally due to the legacy of radio, there is a generally accepted amount that you should pay per play. This continues to the fact that spotify could over time expand into other areas of the music industry such as being a platform for artists to sell merchandise and concert tickets which is the most viable way for small artists to make money.
I see your points and I think they are very real. Streaming is one of the biggest sources of revenue today for the major players. Territories in music industry is what's squeezing business like Spotify. You can have a deal such that Warner has exclusive right in North America for all licenses, and can then sell to Spotify. Then perhaps another deal is reserved to a Sony-owned label in Eastern Europe. So if Sony doesn't want to sign the deal with Spotify, sure, Greek users may never get to play that song on Spotify.
I remember jumping from Apple Music and YouTube to Spotify because Spotify offers by paying monthly subscription, I have instant access to many music catalogs. Unlike Apple Music, I had to pay $0.99 or whatever per album/song. I am not sure if that has changed since, but it was the #1 reason I left Apple Music.
Since the Big Three has made so much more from streaming deals, they are going to choke Spotify's throat, but also have to deal with Spotify. After all, there is a solid and a strong growth of active users on the Spotify platform.
Big Three will flex muscles, but they won't just let the deal fail. Both sides need the revenue desperately. Netflix is in the same position but it has been producing its original contents so Netflix is less dependent on outsider producers. I think Spotify will do the same: create its own label and production companies, sign artists and make deals with the Big Three at various levels. Perhaps even buy a show ticketing company. Maybe begin to create a broadcast and video platform.
Warner Music Group's owner (Access Industries) is an investor of Spoifty (Access Technology Venture is owned by Access Industries which owns WMG). There's a humor whenever I look at music industry: we play the game of music chair, because your ex-worker might just show up to your conference call the next day representing another music company. Since artist X may have separate deals with separate labels (which in turns separate music recording companies), or because WMG needs Sony's help in India or whatever, in conclusion everyone has a stake in Spotify at the end of the day, even if you are not a direct investor of Spotify.
Unfortunately, every dollar collected is split up 50 times just because it takes many parties to publish a music and then collect the money. Everyone wants a piece, and everyone will have a piece. The pie might be small, but just enough to feed.
Given that music is generally not a substitutable good, margins can only be so strong on the core streaming product to your very point. I'm not really aware of any other revenue stream they may have (do they do ads?) and am curious what they might propose. Presumably they do have enough scale to be possible successful with something tied to monetizing their user data whether through ads or some other value-added service?
Apple, Google, and Amazon can afford to lose money all day long on the music streaming services that they each offer. This is because the services bolster their broader ecosystem of services and products whose aggregate value is far greater than any individual piece on it's own.
That's why Spotify is in a precarious position because streaming is it's only bread and butter.
Similar to UberEats + Uber versus a standalone service like DoorDash or Postmates. Uber doesn't need to make money on UberEats in order to be a successful business. Postmates does and that's a huge problem because delivery is a brutal business.
I believe the recently announced lawsuit, coming right before this IPO, may be a fine example of exactly what you're describing.
How do these other services operate in contrast?
really? with their endless amount of listener history and preference data. IMHO Spotify has gained the upper hand.
Rap Caviar, a playlist curated by Spotify, is making music into hits: http://www.vulture.com/2017/09/spotify-rapcaviar-most-influe...
For eg. Spotify had to lower their price from $10 per month to $15 per month for 6 (family plan) because Google Play Music offered that price point along with YouTube Red. Of course, neither Google nor Apple need to make money from their music services. Funnily or sadly enough this is true for almost everything Google does other than Ads.
Most people would agree that Spotify is a better music player while each of Google's music apps are bad in different ways, but online subscription services are a market where people want to nickel and dime.
>Most people would agree that Spotify is a better music player while each of Google's music apps are bad in different ways
I am not so sure about that. Spotify is on top of its game : adjusting the loudness of tracks, using ogg, .. I am however pretty sure that to almost all the users, it makes no difference.
Furthermore, it is very hard to differentiate as a music service. Most of the features are present in all the services (albums, playlists, AI generated recommandations, radios, podcasts, etc) .
Regarding the price, it is up to Spotify to start creating its own content in order to make it go down. Right now the real issue IMO is that the majors are dictating an extremely high monthly price for the service.
Google Music have been displaying some kind of 'I feel lucky' button for ages (it is not random but based on your listens). They also had artists maps years ago.
Deezer has its Flow
Apple Music has 'for you'
There are many variations in how these recommandations are surfaced to the user though.
I would be hard pressed to recommend one service over another as far as their quality. It is just all over the place depending on your tastes, listening styles and how much new tracks you want to listen to.
IMO Spotify has mostly found a sweet spot in how to present these results to the user.
It seems to me that Google Play Music's recommendations are based on what artists you like, based on machine learning, but not using the actual music, just pattern matching with other people.
I use Google Play Music, and am actually considering trying Spotify to get better recommendations.
Always interested to read more about how these recommendations work.
Disclaimer: I'm a Google employee (but I've been using Play Music since long before my employment)
This seems much more like a forced IPO to get someone cashed out than the typical IPO to raise funds.
One thing to remember if you are investing, is that there will almost certainly be no restrictions on selling stock, meaning that employee's, C-level execs and early investors won't have the typical lock up period.
And since they aren't using an underwriter, there is no back stop for the shares sliding on the first day of trading.
This doesn't do a whole lot to inspire confidence in the company, Look for the CEO to make an announcement that they will be holding their shares, or be prepared to buy into a company while the people on the inside are getting out of.
As a user, I'm really excited for them, as an investor not so much. Hopefully they'll release some good news leading up to their IPO which could be as early as March.
I guess as an investor, I don't see why I'd buy Spotify shares from an existing shareholder -- my "investment" is not going to the company, it's a bit like buying shares on the market of a mature company, except Spotify isn't that -- it's a money-hole with a highly questionable future. Is there any reason for someone to buy existing shares to expect things to turn around? They aren't getting a capital infusion, it's business as usual except with the additional burden of being a public company.
Of course, if everyone has too optimistic a view on Spotify's future success (could well be the case, I don't have an informed opinion) then buying the stock is a bad idea. But there is not necessarily anything sinister going on when founders/early investors cash out. From Spotify's point of view, they have an inventive to keep these people happy, balanced against the greater regulatory/oversight costs that you highlight.
Spotify is going public largely due to terms they agreed to in previous funding rounds, but they are probably not raising money because they either don't need it or believe they can get better funding terms.
If anything, this should be a signal that the company thinks the public stock is under-priced.
How are these two comparable? When Apple IPO'd back in 1980 you were buying stock from Apple.
>"...but they are probably not raising money because they either don't need it or believe they can get better funding terms."
They lose hundreds of millions of dollars year over year, why would they not need it? Also why would they believe that they can get better funding now when they resorted to selling debt with unfavorable term intheir last round of financing?
One of the conditions of their recent debt financing was that they IPO within a certain time frame. If they believe that they don't need additional funding at the moment or can get better terms then they are simply fulfilling criteria #2 and #3 with their unique IPO. I imagine Spotify can get decent debt financing terms b/c they have such a steady and predictable source of revenue (though not necessarily profit).
Spotify is not IPO’ing. They are direct listing their stock. Because of a simple drafting error on part of TPG et al Spotify is side-stepping the bulk of the delayed IPO penalties.
>" I imagine Spotify can get decent debt financing terms b/c they have such a steady and predictable source of revenue (though not necessarily profit)."
Again if this true, why would they raise a billion dollars in convertible debt?
Because debt is often a better instrument?
I have no comment on their actual business, just that I don't see them not selling shares as a negative signaling issue.
People would make the same arguments regardless of whether they were selling stock or not.
This allows them to cash out and then go sue Spotify for all the stuff they were previously lenient with.
They will no longer have vested interest in the company and no reason to protect it.
Maybe it'll scratch your itch, figured I'd share.
Fingers crossed history doesn't repeat itself w/ 3rd party apps build on Spotify. If you have any feedback or ideas that have been simmering please hit me up (email is at the bottom of the website).
That and the abysmal queue handling make me wish rdio was still around.
Their App is tricky to use (easy to skip, rather than enque a song, or accidentally skip while looking at meta data, or searching for tracks to queue).
They have offline working, half-decent play lists (but still too easy to accidentally make a new list, rather than augment an existing one).
However - "everyone" knows it, and knows favourite songs on it, and have an active account - so it's nice at parties, or for sharing tracks in person or via messages, tweets/statuses etc.
The only other thing I'd like to see was a steam/sdk integration for soundtracks in games. Everyone listens to their own music with any (mmo) game worth playing - but it'd be nice to have Spotify cross-fade to the "scary/dramatic" playlist in a fight, and "moody" when the game calls for quiet mood etc.
Seems really hard to build a sustainable music-streaming business when all major competitors can simply subsidize this rather complementary part of their business (AZ, Apple, etc.).
I'm not convinced they can do anything else successfully to be honest. At least I'm not impressed with some of the newest stuff like podcasts.
Has spotify really been playing these major artists without permission? Or is there more to the story?
Not unusual to file for 10x what you think you might collect in the end. If there really are damages, will Spotify just give them 160 million in stock?
Like say if the lawsuit cleans them out, does being a publicly listed company vs a private one make for a different outcome?
Looking to hear from someone who’d have some domain knowledge on this stuff.
EDIT: Or possibly the other way around, does this allow them to finance the costs of the lawsuit?
Amazon, Facebook, Alibaba are some popular examples you might want to read about.
No domain knowledge btw, just seen it happen a couple of times before
For comparison, Vivendi/Universal is at $35B (based on its share price) with 20K+ employees in multiple divisions vs. Spotify in just the music streaming business with 1600 employees.
More artists are publishing their music independently. I think the negotiation power of older records owned by record labels will diminish because the next generation of independently owned records will outweigh them.
The thing I'm unsure of is how Apple Music vs Spotify is going to play out. I feel that Spotify is currently an overall better product but Apple has had major cultural impact with its curation which IMO is more valuable than building software.
I had an offer on the table from them in 2011 but decided to go with Amazon instead. I'm always curious how the road not taken would have turned out.
From both my experience and that of folks I've spoken with, the last year or two has been quite good for us. That said, you're probably much better off financially if you accepted an offer from a FAANG-type company around the same time and stuck with them.
This comment could be a lot more substantial. You might want to check out the commenting guidelines here: https://news.ycombinator.com/newsguidelines.html
It sounds like you're not a paying customer and go to great efforts to remain a non-paying customer. I'm not sure why they should be prioritizing your use case.
> They added really bad limits, like a limit on how many hours you could listen every month.
> They forced you to create Facebook accounts to register
Also completely wrong.
> which means I had to create tons of Facebook accounts to overcome the hours/month limit.
This is also wrong because the previous two statements were also wrong.
> And some other things I don't remember.
And some things you flat out don't understand. Please avoid commenting on stories like this and spreading false information. It does no good.
"Meanwhile a new free version called Spotify Open allows Europeans who had not been invited to sign up for free accounts in the past to join without being invited – however, they can only stream up to 20 hours of free music per month, with advertisements."
This is what the client looked like when you were out of hours: https://spotify.i.lithium.com/t5/image/serverpage/image-id/1... (notice the bar at the top right. dakika = hours I suppose. I can't find a better screenshot)
Facebook required: https://www.cbsnews.com/news/facebook-login-required-for-spo...
"Unfortunately you will need a Facebook account to access Spotify from now on, unless you already have an account set up"
So please just because you weren't there to see it don't say it's a lie
Can't say much about music being removed. I don't remember what they removed and don't have any citations. But I remember it happening.
Not releasing it as planned could very well be worse. It could easily be seen as an implicit acknowledgment that the plaintiff has legal standing, and that their claims have merit. This could then lead to a situation where an IPO would have to be delayed, potentially for years until it all has been played out in court.
I'm quite sure most potential investors will assume that this particular suit is likely to be timed based on rumors of the IPO to interfere maximally with it. Maybe in the hope of either a quick settlement or to effectively create an out-of-court punishment via lowered IPO valuation to deterr others from trying to manuever the legal terrain in a similar way as Spotify is claimed to do. Whether the plaintiff has standing or not.
Going forward without deviating from schedule, or even quicker than schedule, sends what is probably the strongest possible message that could be sent to bolster the IPO and minimise value loss. It says: "We're not afraid of this suit"
Risk estimates in preparation for an IPO regarding a company like Spotify almost certainly includes assesment of risks by various actors that might want a piece of the cake through legal action.