> Spotify’s founder, Daniel Ek, made his initial fortune. At 23, he was the CEO of uTorrent, a pirate platform that became BitTorrent (arguably the largest rights-infringing platform in the world). He and their developers then used identical rights-infringing software in order to build his new golden goose: Spotify.
This is misleading, as BitTorrent Inc purchased uTorrent in 2006 to replace their own BitTorrent client. But uTorrent was just one client for this "pirate platform".
> Meanwhile, Spotify pockets 30% of all the revenue they collect––and they don’t make anything.
I suppose he has no issue with labels then?
> Spotify’s in trouble because Spotify doesn’t know what their product is.
> “No no…sorry,” I said, shaking my head in disbelief. “Your product isn’t ‘Spotify.’” He continued to stare at me. I said, “Sir, your product is music.”
What a muppet, going from "Spotify doesn't make anything!" to "Spotify's product is music".
This is especially dumb because it's like saying "supermarkets don't make any food, they just sell it!".
I forgot that Netflix was a charity from its inception in 1997 until its first original content launched in 2013.
Spotify (the app) is Spotify's (company) product.
Music is the musician's product.
Spotify's (the company) product (the app) is a music delivery system.
People who have a Spotify (the app) account are Spotify's users.
People who listen to music are the artist's listeners.
Someone signed in to Spotify but who never played anything is a user but not a listener.
Someone listening to a song being played on Spotify but without a spotify user account is a listener but not a user.
Going to a meeting and being pedantic about such details shows nothing but your own lack of understanding. And to be honest, a complete lack of maturity as well.
I think it's a reasonable point to discuss. The author's example was good: when at Starbucks, people are ordering a coffee, not a starbucks.
To me, this was an interesting point, not pedantic, because it's not true for all businesses. Unlike Starbucks, when I was a kid, McDonalds wasn't just french fries and a milkshake, the playstructures and happy meal toys made it seem like more than a place for food.
That distinction seems quite relevant to a discussion about how much 'value' Spotify (company) is adding when they take media created by artists and put it on their computers for users/listeners to download/love.
Except that is not true, they decieded to get their coffee at Starbucks. The Starbucks product isn't coffee its "coffee distribution", Just like Spotifys product is "music distribution". Both Starbucks and Spotify provide a distribution channel to attract users, now this doesn't mean reasonable quality coffee/music isn't important to them, but thats not the whole story.
So both are just like McDonalds IMHO, not different as you suggested, its just that their value adds are different.
Starbucks is interchangeable with any of the many coffee chains. The service is fast, prices won't be insanely high, yet it won't be stale coffee sitting for days in a warmer.
So I'll choose Starbucks over a boutique artisan coffee house and over a gas station. But Starbucks vs Other_Coffee_Chain means nothing to me.
EDIT: What I mean is I don't "decide to get my coffee at Starbucks". I decide I want to go for a walk and get coffee and I'll probably stop at the closest coffee chain.
Anyways, to bring this analogy back, what is the Spotify value add? The technical competence to host files on the internet? Putting a front end on CDN hosted media?
- I can order online and have the order ready for pickup when I get there
- I actually prefer their latte
- They never mess it up
It was similar on my last Asia trip. While I try to avoid any sort of non-local food/restaurant while traveling, I enjoy the familiarity and quality I get at Starbucks and frequent it wherever I go.
>The average salary at Spotify is $14,000 per month
Yeah... because execs make outrageously more than the median salary.
This article is beyond childish. It should be linked in the Wikipedia article about the Dunning-Kruger effect, and in the dictionary.com entry for arrogance.
Amazon's (the company) largest product is Amazon (the marketplace).
Amazon (the marketplace) allows Amazon to sell products to users, but also allows 3rd party merchants to sell products to users.
Then all of the very famous musicians in the room walked up to me and said "Wow, Blake! You sure did show that nasty Spotify executive!" They began to shower me with praise and small tokens of affection. Everyone was in awe of my wit.
Beyonce said "Blake - those words you've said were the most beautiful that I've ever heard. Will you write the lyrics for my next album?" And I said, "Beyonce - I'm honored. Ordinarily, I would say no, but because #IRespectMusic so much, I can't refuse this opportunity."
Next, Tegan and Sara came up to me. "Wow, Blake," said Tegan. "That was so amazing. I can't believe how brave you are." Sara chimed in "and handsome!", giggling. We made small talk for a few minutes, before they had to run to a recording session - but first, they surreptitiously slipped me their numbers.
By the time I was done talking with Tegan and Sara, most of the other famous musicians had already thanked me and left. I turned to finally leave the building, when I saw one last hooded straggler, standing in the corner. Suddenly, he looked up at me. "Tupac?!" I said. Indeed, it was Makaveli the Don himself. He looked deep into my soul and said: "Blake... God isn't finished with you yet." Then he smiled, a mysterious smile, and faded away, just like Obi-Wan Kenobi in A New Hope.
And that was the day that I, Blake Morgan, saved music.
> Spotify doesn't make anything
> Your product is music
are flat wrong. Spotify, the company, makes Spotify, the music distribution service. Music is their deliverable.
Of course it's true that Spotify would be nowhere if musicians weren't making music, just as it's true that musician's would be nowhere if instrument-makers didn't make instruments.
Spotify, the product, is a mechanism that allows for (perhaps too) user-friendly music consumption. Artists, through whatever means, enter into music arrangements that allows Spotify to be able to do so. The relationship may or may not be predatory. Salaries at Spotify may or may not be inflated. Regardless, those are valid critiques -- but assertions that Spotify doesn't make anything, or doesn't know what their product even is are wrong, and reveal an inability to understand that different parts of an ecosystem make up the whole thing.
Comparing the average Spotify artist's earnings to a Spotify is comparing apples and oranges.
Successful artist's (except the top 5% maybe) aren't making fortunes off of streaming services. They make money from merch, touring, endorsements, and physical sales (although dwindling).
This article is a cringe filled, immature rant. The author didn't expose a flaw or put the execs in their place, he threw a tantrum in the name of justice. Work on a real solution instead of bragging about how you got invited to a closed door meeting and threw a fit.
But in this case I think it's important to note that Spotify's business is distribution via software. Their consumer product is absolutely music (via streaming).
It's no different to, say, a book publisher - their business is marketing and delivery/distribution but their product is (obviously) books.
The article is a little childish in tone (and clearly written by an interested party to one side of this argument) but his central point here is not wrong.
> an article or substance that is manufactured or refined for sale
The Spotify service is a product that is manufactured, and its purpose is to distribute music. Depending on how you parse that definition, I can see arguments that either of us is correct.
Moreover, I see a distinction between product (that they make) and product (that they distribute). I don't disagree that (as the article assets) "Starbucks is coffee", but, to be fair, Starbucks actually does make the coffee that they then also sell and distribute.
That said, I think the author's central point is that Spotify adds no value to the ecosystem, which I think is very much wrong. That isn't to say that they couldn't be replaced, but I can't think of anyone who can't be, in any industry, vertical, what have you.
Language isn't prescriptive so it's irrelevant anyhow but the problem here is you're using Google's first result (which is the awful dictionary.com results).
Using a not-awful dictionary (Merriam-Webster) gives us a much more normal (and broader) set of definitions, including:
> something produced; especially : commodity 1 (2) : something (such as a service) that is marketed or sold as a commodity.
Spotify certainly produces the software (it's their distribution method) but what they market and sell as their commodity is music. Music is, even dictionary definitionally, their product.
The flip side of the coin, of course, is that you can self-distribute music without a distributor. People have done it. As a web developer, I could build web pages that do things and distribute them via hard drives if ISPs did not exist, or I could start my own ISP. Musicians have it even easier, as they can just self-distribute on the internet --
but, whether by choice or by representative proxy, musicians have chosen to allow their product to be distributed by Spotify. They're of course free to haggle over the terms of that arrangement, and there are likely valid criticisms of Spotify, or the agents who negotiated their terms on behalf of the musicians... the only point I intended, despite whatever inartful phrasing I may have used, is that "Spotify doesn't make anything" is not a valid criticism of Spotify.
I question this. I know Taylor Swift and Jay-Z hate Spotify, but I know some of my favorite indie bands love it -- going so far as to release their new music on Spotify before anywhere else. For small, independent artists the ease of distribution and massive exposure well outweigh the lack of royalties. I think it's classic a long-tail distribution and the people exploiting the head are the ones complaining the loudest.
It's what the widespread expectation is and any artist that wants a particularly special deal will just be dropped. Even big stars probably don't have much leverage individually given that their fans can and will either buy their music or acquire it from other sources anyway.
Cartels always play very dirty when you threaten their business. And the existing position that makes them a cartel (or quasi-cartel), enables them to do that far better than your typical corporation or commercial entity.
I whole-heartedly disagree with this. Sure, people might say coffee, but Starbucks' product is really the whole package. The store design, atmosphere, music, employees, drink names, drink combos.. these were all essential in Starbucks' rise. You aren't just buying coffee at Starbucks, you are buying the experience of Starbucks, therefore, that is the product.
I think this demonstrates that the author has a very narrow understanding of what it takes to build a music app with 140M+ active users.
Sure, they could pay artists more and it's legitimate to have that talk, but taking it to such extremes makes no sense.
Spotify and power dynamics in the music industry is fascinating, but there has to be better treatments in the topic. Any tips?
While it might 380,000 streams to make 1 year at Minimum Wage, per the OP's logic, one can say they get paid for 3 minutes worth of work (or the average length per song).
Holy hell that's a lot of bad history. Bittorrent existed far before uTorrent was a thing. What are the dots that people connected? A quick glance at his Wikipedia article?
If he is dissatisfied I urge the author to do better!
For all of us!
I started listening to _more_ music on Spotify. This by itself does not necessarily pays more to the musicians that I used to listen to, compared to buying their CDs and tracks piecemeal. But I started to listen to two orders of magnitude more artists than before. I may not spend more on music, but my money are now spread over a longer tail.
What Spotify makes is a distribution and discovery product that - by itself - creates a huge value for me.
But as a long-time paying user of Spotify I disagree with the premise of the article: Spotify is the product, the music is not.
For a fixed amount of money each month I can just play almost any song, whenever I want, regardless of whether I even know I want to, with zero friction. I don't have to decide whether or not a song is worth the money, I don't have to decide exactly which songs I will play, I can have shared playlists with friends where we can listen to music from our various overlapping tastes.
The extensive collection of music is a key aspect of the platform, but short of a massive dropoff in what's available, if an album isn't on Spotify the most likely outcome isn't that I'll go somewhere else to listen to the album, it's that I'll just listen to something else on Spotify.
I've begun to notice politics creeping in to their "overview" page as well and do not like this one bit. Music (like sports, before ESPN) was/is a form of escapism and putting a 'support DACA' themed playlist on the front page damages the brand, unless they dynamically start to offer playlists targeted to your personal political beliefs, a terrible idea and one that is incompatible with Spotify's publically progressive culture.
I wonder where the other 70% is..
I wonder where the collective of artist streaming sites are..
I wonder who's making stuff..
I. Just. Wonder.
This feels like a "that happened" post:
> He looked at me as if I’d just shot Santa Claus in the face.
> “No, man! You’re wrong!” He was sweating now, and the dozen or so musicians who’d gathered around us began heckling him. He shouted, “Spotify is our product! You don’t get it at all!” He stormed off.
I guess that's too low even for HuffPost!
And podcasts are what..?