Hacker News new | comments | show | ask | jobs | submit login
[flagged] Spotify’s Fatal Flaw Exposed: My Closed-Door Meeting Ended in a Shouting Match (googleusercontent.com)
49 points by deegles 11 months ago | hide | past | web | favorite | 51 comments

Utter, utter garbage. Please do not waste your time reading this.

> 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!".

> Spotify doesn’t make anything... television and film industries aren’t up in arms over Netflix the way music makers are up in arms about Spotify... because Netflix makes stuff. Great stuff... Meanwhile, Spotify pockets 30% of all the revenue they collect––and they don’t make anything.

I forgot that Netflix was a charity from its inception in 1997 until its first original content launched in 2013.

This article sounds almost childish.

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.

How is that either childish or pedantic. It just took you 7 lines to describe your interpretation of the definition of product in this case.

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.

>when at Starbucks, people are ordering a coffee, not a starbucks.

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.

Maybe I'm missing your point a little, however for me today Starbucks is not like McDonalds when I was a kid.

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?

For me, it is my "adult" McDonalds. I have 5 artisan coffee shops in a two block radius yet I mostly go to starbucks 3 blocks away for a few reasons:

- 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.

I'd say Starbucks business model is coffee distribution, their product is coffee, unless I have to pay an entrance fee for Starbucks. It's a good example, and the article flawed as it might be does highlight the concerns of content creators. Platforms tend to drive down the share of revenue passed on to providers and reduce their bargaining power, this is not specific to Spotify but an unfortunate reality.

The more I think about it Starbucks is a weird example for him to have picked. Dunkin Donuts sells coffee, Starbucks absolutely sells Starbucks.

Let's not forget this gem:

>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.

Reading that fight-over-semantics-because-words-have-meaning-and-etc reminds me what you learn from Ordinary Language Philosophy: that words have meaning in specific context and we as humans spend inordinate amounts of time arguing with one another over what we THINK are topics of substance, but are ACTUALLY coming from different contexts. Different 'language games'. Example: the musician argues that 'users' are not the 'listeners' of music but are in fact the executives. For a software engineer / product manager / CEO a user is someone who uses their software. For the musician, a user is one who 'uses' people nefariously. There were a number of other language game situations where people talked through one another in that article.

I see your line of logic here and acknowledge the distinctions you make. But I agree with the main point of the author which I read as - A music delivery system that loses access to musicians isn't much of anything. And, Spotify is apparently alienating musicians.

Yes and no. The App is nothing without the music. Spotify's ability to populate the app with works from artists is integral. If they made record players then i would agree. But they really do sell music.

They don't even sell music. They provide access to music for free, and charge you for access to that music without ads.

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.

Pedantisn stops when you realise your life's work is being sold at a massive profit and you're getting crumbs to survive on, or not.

Nice catchphrase, meaningless, but nice.

>“And by the way,” I added, “Stop calling your subscribers ‘users.’ They’re not ‘users,’ they’re listeners––our listeners in fact. You’re the ‘user.’ You’re using our music to monetize our listeners for your profit.” 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.

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.

And then the whole bus clapped!

That Blake's name? Albert Einstein...

That was extremely entertaining, thank you lol

It seems this sort of debate goes on continuously with ideologues.

Statements like

> 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.

Yup, I also don't think it's Spotify's responsibility to make sure recording artists are making a "fair living".

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.

I think you'd confusing business with product. It's a common conflation because with many companies it's the same thing.

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.

There's probably room for semantic interpretation here.

> 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.

Ah, yes - the Spotify app is a product of work within the company but it's not the product.

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.

It's interesting the different standards we have for ownership of entertainment media versus our own work product. There are zero programmers who feel Intel owns a stake in our work because without their computers, we wouldn't be able to make programs. But even though musicians in fact can create music that people will pay to listen to without instruments, you just tried to take them down a peg from us by suggesting that they're just another rung on a ladder of value that I suppose starts with, what, logging to get the wood for the instruments?

A fair criticism. I did not intend to imply that musicians were in any way less valuable than instrument makers, recording studios, distributors, et al. My statement would better have been expressed as "guitarists wouldn't make guitar music if nobody made guitars."

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.

> What I don’t love is how little musicians get paid for all that streaming. It’s not fair––not even close. What’s more, middle-class music makers are the ones who are hit hardest, whose businesses are threatened, and whose families are put at risk.

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.

There's also just somewhat of a path-dependent reality. If you want to offer an all-you-can-eat music streaming service you pretty much have to offer the best/most menu you can under the constraint of a $10ish subscription fee.

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.

I find it surprising that Spotify isn't pursuing its own label. Netflix proves that if your biggest risk factor is other's companies content, you have to move to host your own content before the competition wisens up.

A lot of record labels are part owners. That's how they are "getting away with it". Musicians are the only ones getting screwed by spotify.


Interestingly, listing publicly as they're about to do, will release them from that binding over time. The ownership position will be majority non-label and non-insiders with a modest amount of time. Large investment funds will demand they make appropriate choices specifically to benefit the Spotify business, even if that includes building their own label to compete with the major labels. Assuming Spotify thrives over time, it would seem inevitable they'll pull a Netflix. It makes far too much business sense given their between very low and negative margins in the business as it is today (wherein the labels persistently squeeze them nearly to death).

I would think they have the scale at this point to do it. It simply may be very expensive and difficult to lure the musicians away from their existing label infrastructure. If it's not done right, it ends in disaster for the artist and they'll get frozen out by the labels in the future.

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 wonder if it has to do with the economics of running a label. When you make a movie people and people watch it, you make money. If you make an album you might get a little bit of money but you have to then sell a concert tour and merch to make it worthwhile.

> “Wait,” I said, “Listen, it’s music. Your product is music. The reason I know that is because if we went out into the street right now and asked a thousand people what Starbucks’ ‘product’ is, they’d all say coffee. Not a single person would say ‘Starbucks’ product is Starbucks.’ Right?”

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.

> Meanwhile, Spotify pockets 30% of all the revenue they collect––and they don’t make anything

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.

Why bring up that uTorrent technology was part of Spotify? Clearly guilt by association and a bit of ad hominem on Daniel Ek. Had really hard to take the article seriously after that.

Spotify and power dynamics in the music industry is fascinating, but there has to be better treatments in the topic. Any tips?

Is this meant to be satire cause I can't understand the OP's logic at all?

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).

I'm pretty sure it takes more than three minutes of work to compose, record, mix, and master a song.

> This was the year people started to connect the dots about how 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.

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?

This bloke is fatally and arrogantly wrong! Spotify's product is not the music, it is the product of the musicians! As a musician he should know this fundamental fact very well like alphabet - especially when thinking about his copyright. When I buy a Sony Walkman from Amazon that is not the product of Amazon - if we want to stick to the stupid analogy stream started by the author at Starbucks. The Spotify's product is the delivery system and that's it! Which is very important! I listen to music for many decades now, I love music and to date Spotify is the best form to carry it out and unleash the experience. Much less bound by physical medium and the unavoidable maintenance cost and effort. It is allowing us to use existing generic infrastructure (computer or other gadgets, internet) and access virtually infinite amount of products. The same is not true for vinyl, CD, not even right managed files which all need to be bought, stored and delivered to the right special gadgets. From a fragmented set of stores in various ways. Need to go and buy manually again, and again - I bought so many music repeatedly just because the media got outdated or lost that it is unfair towards me, the listener. The Spotify form of delivery is something important for listeners, the end clients of the musicians, musicians should be much more respectful what is good for their audience. Without proper delivery methods their music was lost in the space!

If he is dissatisfied I urge the author to do better! For all of us!

I feel for musicians, but to say that Spotify does not make anything is BS.

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.

As far as whether or not Spotify is good to musicians, or takes too big of a cut, or distributes revenue fairly, I don't know. It's certainly possible that there's a better payment structure that would be better for musicians that results in no difference to the consumer.

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.

The product, besides co-opting the artists' music, is playing a centralized kingmaker, from whom artists or their labels can purchase influence. Now it's starting to go beyond music though.

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 love Spotify. For me its a music discovery service. I dont care if you call me a user or a listener, all I know is that last year I listened to 1800+ artiste/bands. A few years ago I was stuck listening to the same 20-30 bands that I knew about or someone recommended. I now know about artists (possibly OP is one of them) that I would have never come across otherwise. I think that is their product and they do a pretty great job of it.

Horse shit. Fatally flawed article. But I see the comments pretty much have that covered.

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.

What did I just read?

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.

Why was this article taken down by HuffPo?

Because it is a childish rant about someone being uselessly pedantic for the sake of being pedantic and confrontational.

I guess that's too low even for HuffPost!

>music is your product

And podcasts are what..?

Guidelines | FAQ | Support | API | Security | Lists | Bookmarklet | Legal | Apply to YC | Contact