I do love Spotify as a product, however I don't think it will scale the same way Netflix does. Spotify is at the mercy of major record labels, and as their books become more transparent the record labels will squeeze every dollar they can for licensing. That is, unless they find a way to upend the record industry entirely.<p>Spotify has a unique position with their amazing discovery/recommendations engine- they could potentially start their own "label" and promote their own artists that sign on. Small/independent musicians could see more exposure and Spotify can deliver more music tailored for individual tastes. I've personally found myself listening to lots of small/indie artists as a result of their algorithms, to the point that these now make up the majority of my listening experience.<p>I think getting into concert tickets/streams, merchandise etc could help them potentially capture quite a bit of value in the future as well.<p>I know the comparison is similar to original content & Netflix - but keep in mind there's an opportunity cost with media (one can only consume X amount of shows/songs within a period of time). The more attention Spotify can divert away from the major record labels the better.
And in Sweden, home of Spotify, the other big news is that NYSE raised Switzerland's flag.<p><a href="https://www.thelocal.se/20180403/spotify-swiss-or-swedish-whatevs-says-new-york-stock-exchange-flies-the-wrong-flag" rel="nofollow">https://www.thelocal.se/20180403/spotify-swiss-or-swedish-wh...</a>
Maybe my perception is off, but it seems like we're getting lots of tech IPO's in a relatively short time. Stitch Fix, Dropbox, Blue Apron, Snap, and Roku to name a few.<p>For a long time we weren't seeing too many big tech IPO's. Did something fundamentally change in the market to lead to this, or did all these companies just happen to make it to "market maturity" around the same time?
I just don't see how this can be a successful company long term. If the labels see any profit they will demand more fees at the next deal negotiation. To become music's Netflix they would have to produce their own music which people want to listen to, which is a lot easier said then done. The easiest route is probably to become Tidal and give the company away to a few big artists in exchange for exclusives.
I'm not quite clear on why people are choosing spotify over google play music - to me the google option is superior in UI and offerings (including ad-free youtube).<p>Am I missing something? Is it just one runs better on iPhones or is more hip (like why people choose snapchat over instagram or something)?
Maybe they have enough capital now to adjust the Discover Weekly algorithm, which provides a weekly recipe of 30 songs that have no basis in what I listened to or have in my playlists. I do get to discover Millennial sleepily-singing voices to a disco beat and a 'laid back' riff that promises to stay in the background (thanks to a faux garagey sound). Is that what Indy means?<p>For pre-selected music that I listen to frequently, I use playlists with Spotify.<p>For truly discovering music with algorithms that work, I use Pandora.<p>I do notice there is NOT a lot of overlap at times, due to bizarre licensing restrictions and deals.
I am a closeted hobbyist musician in a rather small niche (contemporary christian music in Spanish LOL)but I don't want to live off my music. I just want to be heard by somebody. And today, trough distrokid plus spotify this is sooo posible. Which wouldn't have been in my wildest of dreams 20 years ago when I wanted to start a band with my friends. Or even 10, when I toured with a small time ska band. And since my goal is being heard and not profit I would be glad to pay for listeners.<p>And I don't think I'm the only one.
I doubt the current $150/share is sustainable given the waste, fraud, abuse, and royalties. I'm forecasting a wave of layoffs before next quarter's earnings. I'll concede the product is good and the UX is nailed. There just isn't enough innovation or growth to support the need for 5000 employees. Those of you who were users of the product 5+ years ago. How much has really changed? None of the recent acquisitions have provided any valuable gain to the company's core competencies. The company culture is a shell of what it once was, with a leader of HR hellbent on neutering the minds of employees to hire unqualified -but- DIVERSE! candidates.
I personally have supported them since beta (when they charged more) so I will probably pick up a share or two. They are certainly worth NFLX money. Music is insanely easy to produce, it is certain they will start courting artists directly, and if they can find an acquisition that fills the DIY punk music scene that was Soundcloud they will be just fine. They need more DIY content to go along with the curated big label stuff. And by DIY I mean letting every small Bandcamp DJ and artist on there. Might as well swallow everything right?<p>The experience on the platform was always stellar and just keeps getting better the more data they collect. It's a good example where big data isn't creepy at all, it's amazing. They constantly filter my preferences and show me the key types of songs I like to listen to, impressive in itself but the song radio aping Pandora is also impressive and way more interactive than Pandora itself.<p>Basically I'm mega bullish Spotify and am not even going to front like I'm not. You don't need to buy it but I doubt it goes anywhere bad. /end-activist-investor-rant
Spotify Revenue (Euros)<p>2017 4.09 billion<p>2016 2.95 billion<p>2015 1.94 billion<p>Net Loss (Euros)<p>2017 1.2 billion<p>2016 539 million<p>Impressive revenue growth, but I can't understand the valuation given the losses.<p>I love their product though.
Can it be a problem for Spotify that it will be hard for them to increase the revenue they extract even from the most loyal customers? If streaming music becomes a commodity and price sensitive people switch to competing services what will happen? Some companies like Apple are in nice position, because they can just sell more stuff to the loyal customers. Phone, pad and watch instead of just phone. And then more expensive variants of these.<p>Is there something Spotify could do to differentiate, something that matters even for those who don't value the sophisticated playlists? Should they go the Netflix route and start producing their own music? Or would it make sense to produce some other audio content? Think programs like "Serial" [1]. Or maybe some radio drama [2]?<p>[1] <a href="https://serialpodcast.org/" rel="nofollow">https://serialpodcast.org/</a>
[2] <a href="https://en.wikipedia.org/wiki/Radio_drama" rel="nofollow">https://en.wikipedia.org/wiki/Radio_drama</a>
Contrasting this offering, where there were no underwriters and things proceeded spectacularly, with the Dropbox IPO, where the underwriters added negative value, speaks profoundly to the future role of private markets in the capital markets for technology companies.<p>Disclaimer: I bet my career on private markets supplanting public ones, in respect of certain technology companies, many years ago.
biggest jump ball: Apple/Google/Amazon competing services. spotify deserves real credit for changing how people consume music, and I think that story will serve them well in the short-term, but their biggest risk is Apple/Google/Amazon who provide competing services that don't have any current pressure to turn a profit - Tim Cook basically said "we don't plan to make money"[1], a bad thing to hear from your primary competitor who also happens to be the most valuable company in the world. as i've said before on diff threads, I would not be surprised if Apple announces a big price decrease or other apple music news right before Spotify's first or second earnings report.<p>still, impressive for them to make it this far, if they can really find a path to profitability that also fairly compensates artists, I wish them the best! I think it's more likely that as apple/google/amazon force them to continue to operate at a loss, downward pressure on their stock will make them a good acquisition target for one of the big tech companies looking to compete with Apple Music (Amazon seems like a real possibility here - a spotify acquisition feels similar in size and scope to their recent WF acquisition, essentially another double-down on their "everything store" vision/story).<p>[1] <a href="https://www.fastcompany.com/40525409/why-apple-is-the-worlds-most-innovative-company" rel="nofollow">https://www.fastcompany.com/40525409/why-apple-is-the-worlds...</a>
1/ Spotify is not Netflix. There won’t be a Netfix for music.<p>2/ Netflix, with almost 118 million subscribers worldwide, has allayed concerns about its slowing growth by reminding analysts there are more than 700 million broadband households. Spotify, with 71 million paying users, touts an even larger number in its filing: 1.6 billion payment-enabled smartphone owners expected by 2021. #Growth<p>3/ Spotify delivers more than 70 percent of its sales to music rights holders, despite efforts to improve profit margins.<p>4/ Universal Music Group, Sony Music Entertainment, Warner Music Group, Merlin (the representative for many independent labels), which own 87% of the music on Spotify as measured by streams.<p>5/ It seems highly unlikely Spotify’s Cost of Revenue will improve much in the short-term: those record deals are locked in until at least next year.<p>6/ It means once the growth of Spotify starts to slow even a bit, it will has very serious trouble.<p>7/ Netflix is building its own studio to produce shows on its own. Spotify says it has no interest in signing artists, or paying for artists to record. (They don’t have the capital)<p>8/ However, it has another plan to reduce its reliance on its main suppliers: by making them less relevant. “The old model favoured certain gatekeepers. Artists had to be signed to a label,” chief executive Daniel Ek wrote in a letter included in the filing.<p>“They needed access to a recording studio, and they had to be played on terrestrial radio to achieve success. Today, artists can produce and release their own music. Labels, studios, and radio still matter, but in a cluttered landscape, artists’ biggest challenge is navigating this complexity to get heard. We believe Spotify empowers them to break through.”<p>(Ref 4/: Those labels own 85% of the music on Spotify as measured by streams. Progress of empowering: 15%.)<p>9/ This goal sounds like “the Podcast model” started in 2005, unfortunately, by their biggest competitor: Apple.<p>Spotify's Dilemma: <a href="https://allenleein.github.io/brains/2018/03/spotifys-dilemma" rel="nofollow">https://allenleein.github.io/brains/2018/03/spotifys-dilemma</a>
Not enough people talking about this: The fundamental challenge for Spotify is they have to make money while Apple Music doesn't.<p>Apple Music can run break-even as a platform feature, like the App Store was (at least in the early days). Or they could pay artists more with that margin and get more exclusives. Either way, it's a <i>fundamental long term competitive disadvantage</i> for Spotify.
Congrats to them, but I don’t think I’ll ever understand renting music. I can understand Netflix’s success because movie content is much less replayable and more expensive, but music is relatively cheap to own your own collection. I love music, but I don’t understand the appeal of Spotify and Pandora—I’d rather take the cost of subscription and build out my library over time.
I'm afraid about what will happen as more of these streaming services compete. It seems to be mirroring the Netflix/Hulu/Disney battleground -- subscription platforms which start differentiating themselves by owning exclusive content. Spotify has started this, and Jay-Z & Co have refused to give streaming rights to their competitors, such that Spotify doesn't have access to any Jay-Z, or, oddly enough, any Metallica.<p>The problem here is that I purchase these subscriptions so that I can have access to all of the music I haven't decided that I want to own forever yet. If this trend continues and streaming platforms become more and more exclusive, I will likely cancel my subscriptions, buy my music from the artists directly, and say goodbye to renting rather than owning music.
> The company says that in 2018, shares traded on the private markets between $90 and $132.50.<p>> Losses for last year were 1.2 billion Euros ($1.47 billion), which compares to 539 million Euros ($661 million) the year before.<p>Well, there's the short of the year.
Nothing to celebrate. My CDs from twenty years ago still work. Why would I invest time in Spotify when one day all the music just disappears, or they raise prices, etc.?<p>If this is the future it doesn’t feel like progress.
As of writing this the market price is $150, dropping from $165. But almost surely this is a win for employees who derail the 6 month lockup uncertainty.
I wonder how you'd value Google Play Music alone based on this type of comp. Anyone have an idea of what the number could be like w/ rationale?
Let the buzz fade away... wait for it to drop below $100 then look at your options. I don't understand why people still want to jump and buy shares the same day a private company goes public considering the hype, etc. Why would you lose that much that fast?
So i bought in, who knows where this will go though :)<p>One of my hopes it that just like NFLX, once the company focuses on producing / licensing it's own content they can do really well.<p>I'm interested in hearing what others have to say on this! Did you buy, will you buy? Why?
I don't get it. They don't own the IPR so at best it's a thin revenue model on giant cashflow to agencies. All it's got is cost side risk and a thin skin of ui advantage.<p>Maybe it's me. I have no track record identifying winners or losers.
Since this is just shares changing hands and not bringing money into the company - what is the impact for Spotify? Does the company itself own shares? How much money has Spotify in the bank these days?
Their product is a lot more powerful than Soundcloud's (even though the target users might slightly differ).<p>I really hope they have a solid roadmap and wish them the best.
im curious why spotify does not enable artist sell merchandise and tickets on its platform. as a free user I would prefer to see ads for merch and events happening near my town from my favorite artists rather than annoying ads of products and services I have 0 interest in.
today at the gym i heard some awesome songs so i asked what it was and they said "spotify radio". its impossible for me to recreate that list.