Spotify have reached 40M paying subscribers
thenordicweb.com
thenordicweb.com
Also the stations are incredibly shallow. If you pick a station on Pandora, you will have hundreds of songs that are generally well selected in my experience. If you pick one on Spotify, you get maybe 20-30 songs.
The one major benefit to Spotify is that you can pick any song you want. However, if you pick a genre, you're likely to be inundated with shitty cover bands that you have to painfully sift through in order to find the actual playlist your looking for, because '70's hits' could be anything from Led Zepplin to your next door neighbours cover band.
TLDR - incredibly over complicated UI, shallow stations, too much spam music.
Spotify is far better at actually playing under the same conditions. If anything it is too eager (there was that time I had to tell it to stop 4 times). However it is a huge pain if you want it to just play music without having to babysit what it plays.
Any spotify peeps reading this wtf?
I really like two things about Spotify:
* Curated Playlists: Their mood/genre playlists have a human touch (and very good taste) and I can also follow playlists created by some of my favorite artists
* Social/Sharing: I like seeing what my friends are listening to in the sidebar and I know enough people on Spotify that I can reliably send Spotify links to my friends and know they'll be able to listen to a song/album. I would reconsider if that network effect shifted and more people were on Apple.
Also the stations are incredibly shallow. If you pick a station on Pandora, you will have 100+ songs that are generally well selected in my experience. If you pick one on Spotify, you get maybe 20-30 songs.
The one major benefit to Spotify is that you can pick any song you want, you're not forced into stations. However, if you pick a genre, you're likely to be inundated with shitty cover bands that you have to painfully sift through in order to find the actual playlist your looking for, because '70's hits' could be anything from Led Zepplin to your next door neighbours cover band.
TLDR - incredibly over complicated UI, shallow stations, too much spam music.
Obviously that's a very demanded feature so they must have a strong reason not to have it anymore (legal issues probably).
I personally used it all the times for improvised karaokes so I'm very upset to not have lyrics on demand anymore.
[1]: https://support.spotify.com/us/using_spotify/search_play/beh...
Does anyone know how to see if my anectdote is a trend?
Perhaps they lost some contracts with major labels, or perhaps there is a way to probe their search API to estimate their library size.
- A startup negotiates contracts with most/all content providers
- said startup becomes a sensation
- Google, Apple & Amazon enter the market, signing similar deals
- Content providers realize the value of their material and negotiations become more complicated
- The services want need differentiation and it can't be price because they all have more or less the same lower bound of licensing costs
- The startup's contracts are up for renewal. They don't have the financial background of Apple/Google/Amazon and loose a few contracts
- There are now 5-10 services and each one has some exclusive content, overlap in the libraries keeps shrinking
- I go back to bit torrent because 10$/mo is already more per year than I paid for music in the first 25 years of my life total.
* length: about 3 years or as it's commonly called "A good Netflix"
So many artists that I like were missing albums or songs on Apple Music for some reason. One group that I particularly like was missing over 3/4 of their music at Apple. All available in iTunes of course, but I don't feel like paying for individual songs on top my subscriptions. Worth noting that I'm in Canada and I'm talking about mostly Electronic, Metal, and Jazz tracks.
If there was any machine learning at all going on at that place it should have picked out that peculiarity by now.
Reference: http://www.billboard.com/articles/business/6875477/spotify-3...
1) I can't play it on multiple devices at the same time like every other service I subscribe to (Netflix, Hbo, Hulu). If I ever upgrade to a"family" account, I have to make new accounts for each person (including my kids).
2) The UI sucks. I can never find the queue list, so I never know what is playing next. Adding items to a playlist is should be easier.
3) The web app is really broken. You have to install the Spotify software to use the service.
4) Offline playlists randomly decide they have not been downloaded yet.
5) Nothing by the Beatles. Like every other music service, the only way is to rip your old CDs or torrent them.
One feature I do like, listening to local music files on the Spotify software. Like, for example, the Beatles.
I really wish Grooveshark was still around!
[edit] Now that I read that Spotify (and similar companies) are actually losing money I realize that I shouldn't be so hard on them.
https://open.spotify.com/special/thebeatles
It make a lot of headlines when it happened. http://www.recode.net/2015/12/22/11621674/the-beatles-are-co...
Though I may misunderstand what you're asking for, as I don't quite get the Last.FM comment.
Friendly fyi... if we're talking about a company's financials instead of a human's salary, the precise term would be "revenue" instead of "income". Income would be revenue minus costs. Spotify doesn't have any positive income.[1]
>Their expenses are mostly royalties and those are probably spare change compared to that income.
No, it's not "spare change". In fact, the unfavorable licensing terms[2] to the record labels (58% payment) are preventing Spotify from turning a profit. (Keep in mind that so far, Spotify has never turned a profit.)
They also took on $1 billion in new debt with exploding terms[3] which pressures them towards an IPO. A bad timing of the IPO wouldn't help them at all.
I don't see how the financial numbers work in favor of Spotify. It looks like the only companies that can afford to stream music would be Amazon/Apple/Google.
Digital music streaming is a brutal business and all 3 major streaming companies Spotify/Pandora/Rhapsody have been losing money for years.[4] It's now 2016 and nobody has found a way to make profits. Their subscriber growth numbers keep making the headlines so people mistakenly assume those companies are financially successful when they're not.
[1]http://www.statista.com/statistics/244990/spotifys-revenue-a...
[2]http://www.musicbusinessworldwide.com/spotify-contract-three...
[3]http://www.fool.com/investing/2016/06/17/will-spotify-have-a...
According to the source you posted Spotify has been given favourable license terms since it started whereas competitors like rdio have had to pay more and have since went bust.
I can see why that report's statement is confusing.
To clarify, that sentence was only comparing Spotify's "better" licensing terms to Rdio. It's about the licensing costs relative to a competitor.
However, in absolute numbers, it's a licensing cost percentage that's still too expensive. Spotify wants to renegotiate the percentage to be less than 50%. Spotify's "better" rate of 55% compared to Rdio 60% did not meet this more favorable threshold to turn a profit.
The "favorable licensing terms" I was talking about was in absolute terms (company profitability) and not relative terms (compared to another competitor).
Got it and I totally understand exactly what you're saying. It's a matter of perspective and what you said is also true.
That said, let's put some context and boundaries around "unfavorable terms" when it's used to analyze Spotify's financial situation.
If we use an alternative perspective of measuring how Spotify can compete with Apple who has solidified an anchor price[1] of $9.99, it means that Spotify is heavily pressured to not be more expensive than that.
Yes, Spotify could theoretically charge more such as $11.99 to cover the higher licensing percentages of 55% or 58% but they probably feel that it kills their demand curve.
Spotify's pricing has to work in between "free" (piracy) and Apple's $9.99. They don't have the leverage or differentiation to convince consumers to pay $11.99.
So one perspective is that Spotify needs to increase subscription prices to whatever level they need to in order make a profit and to hell with losing millions of customers to Apple's $9.99 deal. Possible eventual outcome is that Spotify dies in bankruptcy because of dwindling user accounts.
The other perspective is that $9.99 is a too much of a consumer-ingrained psychological price so don't bother fighting it. The better chance of survival is to renegotiate with the record labels for more "favorable terms" so it's possible to make a profit at $9.99.
So far, the digital music streaming business can't figure out the money puzzle to make everybody happy. Many consumers already think that $120 a year is too much to pay. At the same time, many artists believe they get too little money[2].
tldr; Spotify can't lose a price war
[1]https://en.wikipedia.org/wiki/Anchoring
[2]http://www.digitalmusicnews.com/2015/09/24/my-song-was-playe...
Also, you can have a family subscription for 6 people for 8.99 EUR (~10.1 USD). I wonder, if such subscriptions are counted as one, or for every member separately.
Gross Margin = Gross Revenue - COGS.
We're down to under $160M.
Spotify has (or had) 1600+ employees. If these were US (CA) based, we'd estimate higher, but since Europeans are relatively "cheaper", let's call it $75K/employee all-in (taxes, benefits, etc.). That's probably light, and doesn't take into account rent or data centers or any expenses, and that costs them ~$120M.
That leaves $40M for "everything else". Assuming that their employees are indeed "as cheap" on average as guesstimated above.
Conclusion: they are surely losing money.