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Comment by guelo | Hacker News Reader

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.

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Or purchase some existing labels. Warner, which is about 20% of the global market, was worth $3.3b -- 11% of spotify -- in 2011 [1]

If I read that correctly, it implies the bulk of the recording industry is worth less than Spotify.

1. https://www.reuters.com/article/us-warnermusic/blavatniks-ac...

People tend to overestimate the size of the music and movie industries, apple and google could buy them outright with change from their couch cushions.

What that says about Spotify's valuation is another thing

This is something that has been bothering me. Doesn't it seem like stock prices are getting out of whack?

Yes although this mostly just applies to consumer tech companies.

Nearly all companies I’ve researched on the exchanges have historical highs going back a couple years. This is across multiple industries (tech, utilities, real estate, grocers). It’s a significant trend. As for whether it’s substantive (ie not likely to correct), well, I’ve seen many economists suggesting a correction “soon” for years.

The more worrying thing is the consumer reports I’ve read. They said people aren’t saving money in 401ks, nor even savings accounts. This could indicate high confidence in the market. Or, it could indicate a lack of income to save. I’ve read reports indicating the later and not the former - specifically reports of people working multiple jobs to afford the basics.

If that’s the case then luxury goods and services should be commensurately lower valued. But they’re they are not.

With a decade of low interest rates, people have been investing in the stock market hoping for a better return on their capital.

At some point all bubbles burst.

There aren't enough IPOs and companies to invest into, so the public markets are chasing anything they can get their hands on. Do these companies have value? Absolutely. Is the demand arbitrarily high because there's supply? Absolutely.

Meant to say "because there's limited supply"

Yeah, that makes sense I suppose. I just don't see the growth path for Spotify. Yeah, they have an excellent music service, but whats next?

Edit: and I as about growth, because I don't see how Spotify is currently worth 30B.

*ask

Apple and Google could, but I doubt Spotify has a few billions around to make any acquisition.

Well, as of today, one could seriously consider an all-stock acquisition and the numbers probably could be made to work.

That would be fun to watch if they tried.

More than likely it won't come to this. Most musicians want their music everywhere, and give it away for (almost) free. Spotify/radio/etc are the marketing, and concerts/festivals/movie licensing/etc are the product. Unlike movies, there's insane repeatability of music, meaning it can be everywhere.

I wouldn't be surprised, though, if less-popular tracks for artists moved to another service. You want to hear The Chainsmoker's radio singles? Play them non-stop on Spotify! But if you're a huge fan and want to hear back tracks, demos, etc, you can pay them $10/mo on a Patreon-like site. Basically, charging more for a closer relationship to studios you like, while their more popular music is released for free.

>To become the 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.

What Spotify has going for it is that indie artists can easily (or at least relatively easily) put their music up on Spotify, which bypasses the record labels. Now, not all of that music is going to be good but that is a way they are already bypassing record labels.

The labels have a large stake in Spotify. Your assessment misses this crucial fact. Getting into the production biz is still an open opportunity, though.

> According to Spotify's F-1 filing, 85 per cent of their streamed music is owned by the three major labels -- Universal, Sony and Warner -- and Merlin, a network for independents. The major labels also hold a sizable equity position in Spotify, as much as 18 per cent back 2009. This gave Spotify some help when it was renegotiating licensing deals last year. [0]

[0] https://ftalphaville.ft.com/2018/03/26/1522056334000/Canvass...

> To become music's Netflix they would have to produce their own music which people want to listen to

Which would make them (like Netflix) one exclusive content provider (potentially among many) which is fine for them if they can get good content, but not great for users who may find music fragmented like streaming video. The great thing about Spotify now is that they have access to nearly everything. Netflix has a decent streaming library of TV series, but their movie archive is terrible compared to the red envelope DVD.com option (or Blockbuster in its prime). It would be a shame for that to happen to music, too.

I would not be surprised if the long term goal is to not just produce but to be THE market place for all music. They already promote tickets to concerts, why stop at promotion, they could easily displace ticketmaster, and with ticketmasters lack of goodwill I am sure lots of people would be happy for this to happen.

Start off by offering no fees for Spotify Premium members. Charge the event organizers the fee, or take it as a loss leader initially. The value add of Spotify is an unique avenue for promotion (e.g. visual displays of upcoming concerts when playing similar songs, which users are unlikely to see as intrusive ads).

They could look at purchasing Bandcamp, which has done a great job of promoting and selling independent music.

Bandcamp lets me download lists of people who've bought my music and of people who follow my profile. This is because they understand the business is mine, and they're simply a service provider for that business. Even their subscription system runs right through the musician's own Stripe account, so you can always take your subscriptions elsewhere.

I don't have any reason to trust that a VC-fueled monster like Spotify understands this. If Spotify bought Bandcamp, I would remove my music from it.

VC-fueled behemoths like to make people dependent on them. I can't trust my business to a company that gets most of its money from outside investors instead of the people who use the service. Their incentives are fundamentally misaligned with my interests.

Apologies if I come across as harsh but as a consumer, I would prefer my consumption activities to remain as private as possible. In light of FB news, I don't think even some Options > Privacy Settings on Bandcamp would be sufficient since most people wouldn't do it. I hope Bandcamp is opt-in for this info.

It is opt-in if you pay for it, but almost no one leaves it unchecked. There's also the option to not require an email for free downloads.

Often these are people I've sent from somewhere else, and we talk regularly. It's not like with Facebook where it's a faceless corporation unless you're spending enough on ads to get an account specialist.

They generally knew me before they gave me money. I'm not collecting any data on them other than the email. I don't even run analytics on web pages I control. I wouldn't even know what to do with it that would tell me anything I don't already know, or that I couldn't get by just asking.

It's opt-out, I normally leave it checked, you get the option clearly when purchasing music/items. The artist can then send updates/you get follow notices, the volume is pretty low at the moment for me at least.

That's still generally seen as opt-in among marketing types, though I can understand the perspective where pre-checking the opt-in is a kind of opt-out.

Please dear god no.

Bandcamp is maybe one of the few examples of a service/shop that actually benefits artists and fans. Having them bought out by some VC tech behemoth will almost certainly see their offering ruined.

Off topic.

Bandcamp's site loooks like it was designed by a schizophrenic person.

A lot of music sites in general seem to prefer form over function IMHO.

Discogs.com is a notable exception of course.

The goal is to make the labels need them too. Plenty of people just won't listen to music if its not on spotify.

Thats fair, but accessing free music is a lot easier than free tv. If they can get people to pay anything for music, thats at least better than zero for labels.

I think the music industry still isn't quite sure what to do about pirating. Seems their solution is "send spec-op soldiers to kick down doors of people in other countries" still.

The equivalent would be to start their own label and sign artists. It's hard, sure, but not impossible. They have the same advantage Netflix did - an intimate knowledge of people's musical tastes and habits. Plus they have already shown willingness to diversify into other areas - merch, concerts, original shows, videos etc.

The thing is, Netflix now is very different from Netflix 5 years ago -- most of the content is the one they produce. Music doesn't work this way, many people just want to listen to old music while it's rare for people to rewatch old shows and movies. There are many albums I have listened to tens of times, and I don't think I have ever watched a film more than three or four times. If the labels pull the artists to make their own Spotifies, Spotify will be left with pretty much nothing, in a situation much worse than Netflix

>To become music's Netflix they would have to produce their own music which people want to listen to

Didn't Starbucks try something like that? I think it was called Hear Music.

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