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Comment by jzb | Hacker News Reader

I dunno, maybe if Spotify wasn't spending hundreds of million on podcast deals and actually focusing on what its users want, they wouldn't need to lay people off.

Any way you slice it, there's no way that the Rogan deal pays for itself. Spotify is stingy AF with the artists that drove people to the service, and then firehoses Rogan with cash and tries to shove podcasts down people's throats. I was a happy Spotify subscriber for a long time but they just kept making the service worse while ratcheting up prices.

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> I dunno, maybe if Spotify wasn't spending hundreds of million on podcast deals and actually focusing on what its users want, they wouldn't need to lay people off.

One of the people specifically called out is Chief Content Officer Dawn Ostroff, who "decided to depart," which is how you phrase C-level firings when they coincide with layoffs.

I imagine that the disastrous podcast deals with the royals and Obamas had something to do with that.

That's good but hardly good enough. No way they drove those deals without the CEO's buy-in.

I confess I don't get the big ticket podcast exclusives. But, then, I basically never listed to any of the "big name" talk radio shows either (and even actively avoided them).

What's weirder to me is how I can't remember even seeing them advertised within Spotify. I know there are some really need content Spotify is producing, but the ones I'm aware off I've generally found by accident somewhere on the Internet, never through their own UI.

Can we switch accounts?

I have listened to exactly 1/2 of one episode of a podcast on Spotify and now have to actively navigate away from the main page of the app if I want to do what I do the other ~99.9% of the time, which is listen to one of a handful of playlists or try to find other similar music.

I forget where I heard this, I think it was on Breaking Points, but I think Rogan's audience is bigger than CNN, MSNBC, and Fox News combined. I doubt they regret the Rogan deal.

Apropos of little, I cancelled my family Spotify plan because of the Joe Rogan deal and moved to Apple Music. Totally forgot that’s the reason I moved us until your comment.

I moved when Rogan hosted Roger Waters, who kept saying anti-semitic things with no push back at all.

Spotify aligning themselves with content, any content, made them a publisher and not a software company. That's their biggest mistake.

But Spotify doesn't pay the artists directly, the deals are with the record companies.

The real issue here seems to be over-hiring and a lot of acquisitions for all sorts of marginal stuff like video podcasts, audiobooks, etc.

> Any way you slice it, there's no way that the Rogan deal pays for itself.

Especially when you still get ads on podcasts. Listening to any podcast on Spotify is so frustrating because I pay for the service and STILL get a half dozen ads an episode.

Blame music publishers. They are the ones raising prices and paying artists pennies. Spotify has no power to change this.

Spotify is/was spending heavily on podcasts to try to create a new revenue stream with better economics.

Spotify has plenty of power to change this and it's disingenuous to argue otherwise. Spotify has lobbied hard to affect royalty rates for music / songwriters and keep them low. Certainly the music publishers / labels are also to blame, but Spotify isn't innocent.

Also - Spotify wanted Podcasts so they went to the podcasters and made deals. Spotify is apparently paying to create royalty free music it can insert into playlists. Spotify could just as easily be making direct deals with, say, indie music artists or wooing bands away from major labels if it wanted to focus on music.

It's not. It's aiming for the streaming service equivalent of reality TV instead but paying big money for them instead of to musicians.

Not to mention their podcast deals are bad for the consumer- Spotify was and is great because people _wanted_ to pay a monthly fee for access to (nearly) unlimited music instead of buying albums.

Podcasts on the other hand already worked great before Spotify started taking them exclusive.

Right, it seemed like a greedy move. Apple podcast app is just fine imo.

Streaming music has always been a very bad business. No matter how much Spotify grows, it will only make 30% gross margins. Almost the definition of a tech company is one that has high fixed costs and low to almost 0 marginal cost and can take advantage of scale. Spotify doesn’t have that.

At least with podcasts, they don’t have to pay a third party for each additional user.

Spotify suffers from the “Dropbox problem”. Streaming music is a feature not a product.

Anyone can build and add Dropbox-like functionality to their product suite (and I was even involved in a couple such efforts a while back)... but Spotify is not at all like that, in that not only is having the music licenses they have more than just some engineering work, people bring their music to Spotify, and so you can't even have a few ins and a major investor and then try and quickly get the same licenses to have the same service as you would still be missing essentially all of the music I listen to on Spotify.

Very few actually feel good about bringing their music to spotify.

Other than the very few giant artists getting the sweetheart deals with guaranteed payouts most feel like they're forced to bring their music to spotify even though they know the whole thing is just bad.

I don't understand how this detail changes anything: you still can't just build a competitor to Spotify and magically have all of its music.

You don’t need all of its music.

You need the three major music producers and the rest will come.

But that’s not the point. The “feature not a product” saying means that a major company has your entire reason for existing as a feature in their product.

Streaming music is already just a feature for Apple and Amazon.

Just like today, you wouldn’t create a separate spell checker application like in the 80s.

> You need the three major music producers and the rest will come.

This isn't how the market works. I know musicians, and they don't care that you are playing licensing monopoly/bingo and have 3 key squares and now they clearly are going to waste their time uploading their music to your service. You need to essentially already have the subscriber count to provide them a new revenue source that is greater than the pain of dealing with you... which forms a brutal catch-22.

This is similar to why live video also isn't just a feature and YouTube is having to go to war with them to bring streamers to their platform (though as Twitch isn't really about a "back catalog", Spotify is actually in a much better position than Twitch). Social networking is another example of a thing that isn't just a feature you can throw together, even if it looked like that to a lot of companies.

Essentially, anywhere there is either a catalog or a network effect to be had (these are related concepts), you have to provide something that isn't just equivalent but fundamentally new to build a user base that can pull in the new market participants, or people are going to keep using the old service even if they hate it because it has a better library.

(The alternative is you have to do something explosively better for the content producers, enough that they want to get on the ground floor. The most obvious way to do that is by just handing them free money with massive subsidies due to VC raises, which was certainly a lot easier a few years ago than it is today.)

I was the developer behind a major content marketplace that had tens of millions of users and which was able to operate for over a decade despite tons of people trying to build competitors. Hell: my software was open source! I only shut it down because the entire market I was in stopped being technologically viable (resulting in my lawsuit against Apple), and it still took years for the content to become stale enough for people to move on (which doesn't happen as quickly for music). I am speaking from direct experience.

> Just like today, you wouldn’t create a separate spell checker application like in the 80s.

Spell checking, like Dropbox, has no network effect and no first mover advantage.

> This isn't how the market works. I know musicians, and they don't care that you are playing licensing monopoly/bingo and have 3 key squares and now they clearly are going to waste their time uploading their music to your service. You need to essentially already have the subscriber count to provide them a new revenue source that is greater than the pain of dealing with you... which forms a brutal catch-22.

You keep acting as if there aren’t two trillion dollar market cap companies that don’t already have streaming services that don’t have to be profitable.

You also act like the day that Apple announced “Apple Music” every musician wasn’t scrambling to get on the platform.

> Spell checking, like Dropbox, has no network effect and no first mover advantage.

If Facebook announced tomorrow that they were going to release “Facebook Streaming” they already have an audience. We aren’t talking about Joe Bobs Music streaming service.

That’s not the concept behind “a feature not a product”. The entire idea is that a major company can add streaming as a bullet point to their ecosystem - like Apple and Amazon - and doesn’t need to be profitable by itself.

That is the “DropBox problem”. DropBox is trying to be a sustainable company while Apple, Microsoft, Google, Adobe and Amazon just throw it in as a feature in their portfolios.

This is the same with the movie studios in 2023. In 2006 when Apple first approached the movie studios, the idea of VOD digitally was new. Now the studios have a standardized process for it. There are a dozen VOD services with the same library because the industry has standardized licenses.

VOD = Video on Demand where you pay to rent or buy each individual film.

There are only three major record labels and if you can get deals with those, you cover most of the music people care about.

The smaller labels will come along

The business of Spotify isn't "streaming music": it is "music licensing"; and, even there, it isn't like most of the music was due to Spotify going out of their way to contact people and get their music on their service: people--not even "labels", but people--upload their music directly to Spotify.

You can compete with that, but it is a massive uphill battle; it is similar to trying to create a new app market competitor from scratch and assuming that all of the apps which exist on someone else's platform--many of which might not even be maintained by people who give a shit anymore--are somehow going to appear on your platform.

> There are a dozen VOD services with the same library because the industry has standardized licenses.

This is entirely untrue... hell: Apple doesn't even have a lot of the content that exists out there anymore, as numerous titles now can only be purchased from Amazon, as it was essentially uploaded directly. I wish I could obtain all of the movies/TV I consume from Apple, but that just isn't how this industry operates.

> There are only three major record labels and if you can get deals with those, you cover most of the music people care about.

This wouldn't be sufficient to cause most users to switch from Spotify. It certainly wouldn't get me to switch from Spotify, and I don't even like Spotify!

> The smaller labels will come along

The long tail of music doesn't even involve "labels" :/.

Why are you even arguing this? There already exist two major competitors that are treating streaming music as just an insignificant portion of a multibillion dollar business - Amazon and Apple. Also to a lesser extent Google/YouTube.

As far as the content that’s unavailable - it doesn’t matter.

The long tail theory has been debunked decades ago (https://mackinstitute.wharton.upenn.edu/2018/long-tail-theor...). You can’t make money at scale with out having the most popular content.

> This wouldn't be sufficient to cause most users to switch from Spotify. It certainly wouldn't get me to switch from Spotify, and I don't even like Spotify!

You’re a geek posting to HN (as am I) you don’t represent the mainstream and it doesn’t matter if people switch or not. Spotify needs to be profitable as an ongoing concern and it isn’t and will never be extremely profitable. Its competitors don’t have to have a profitable streaming service.

> Amazon, as it was essentially uploaded directly. I wish I could obtain all of the movies/TV I consume from Apple, but that just isn't how this industry operates.

Again, a successful business doesn’t depend on the long tail - that’s been debunked by every single market - app stores, music, movies, etc. the vast majority of money is made from hits.

You’re also failing to realize that Spotify’s issue of trying to be profitable just streaming music while its competitors can sell at cost to prop up other businesses.

> Why are you even arguing this? There already exist two major competitors that are treating streaming music as just an insignificant portion of a multibillion dollar business - Amazon and Apple. Also to a lesser extent Google/YouTube.

Amazon, Apple, and Google (to their lesser extent due to YouTube) are also in the content licensing business... the same business Spotify is in. Are you saying that iTunes, or Amazon.com, is also a shitty business? I'm betting you aren't. If you are, I recommend looking at how much money Apple makes on iTunes: it is sufficient to have let them subsidize sales of the iPod.

The reason Spotify is in a bad place is because they have bad contracts for their core content (vs. Apple) and a lack of vision for how to change up their business model (maybe by having a feature similar to Amazon Prime / Hulu where you have to pay for add-on subscriptions for various artists), not because "music streaming is a feature": their business isn't "music streaming".

> Again, a successful business doesn’t depend on the long tail - that’s been debunked by every single market - app stores, music, movies, etc. the vast majority of money is made from hits.

I am not saying the vast majority of revenue comes from the long tail, I am saying having access to a large catalog matters and prevents even large companies from being able to just shut you off as I do believe that people--yes, actual people, like my customers--actually care about access to the long tail, even if it isn't most of their usage or where you book your revenue.

> You’re also failing to realize that Spotify’s issue of trying to be profitable just streaming music while its competitors can sell at cost to prop up other businesses.

They aren't, though! iTunes is profitable. It has tried (and succeeded!) to add Spotify as a feature, but Spotify can and should respond by adding track sales or artist-specific subscriptions as a feature. There are tons of things they could be doing--because their business is not music streaming: their business is content licensing--to become profitable. Why don't they at least have a built-in Patreon mechanism where people can pay arbitrarily more for their subscription and have it (after they take a cut) doled out to their streamed artists?! They are just dumb.

They certainly aren't Dropbox: Dropbox's entire business is just a technological feature and fundamentally continued to be a feature forever. There is no real reason to use their feature over someone else's implementation of that feature except code quality (and I have a queued article to write about how Dropbox is broken ;P). There absolutely is a moat that Spotify has here, and to ignore that is extremely strange. They may be squandering their ability to compete, but they aren't "just a feature". Being a dumb company that needs better leadership to establish a better business model is not the same as being a feature.

> Are you saying that iTunes, or Amazon.com, is also a shitty business? I'm betting you aren't.

Yes, it is a shitty standalone business. The purpose of iTunes was to sell more iPods - the whole “commoditize your complements”.

The purpose of Apple Music was to be a “feature” to sell high margin Apple Watches, AirPods, HomePods, to integrate tightly with Siri, etc.

> If you are, I recommend looking at how much money Apple makes on iTunes: it is sufficient to have let them subsidize sales of the iPod.

That’s not what happened. SJ himself said that the purpose of iTunes was just to break even to sell iPods. iPods were high margin businesses. By the time Apple paid the labels 70% and then paid the credit card processing fees, it wasn’t make much selling 99 cent songs.

Sorry but how's Spotify's service worse?

If they don't have enough work for their workforce, would you still say they're morally obligated to keep writing paychecks?

>If they don't have enough work for their workforce, would you still say they're morally obligated to keep writing paychecks?

Where does OP say that Spotify is "morally obligated to keep writing paychecks"?

He didn't, hence why my comment has a question mark.

>He didn't...

>... would you still say...

What does a recession have to do with the amount of work you have for employees to do? If a recession causes 5% of their subscribers to cancel, it’s not like there’s 5% less work to do company wide.

If the company hired more people than they have work for, it likely has little to do with a possible recession.

In the case where it is true that they have too many employees, I think there is a moral responsibility to attempt to find profitable work for those employees. Or to at least ride it out and make a smaller profit in the lean years if it doesn’t seriously endanger the health of the company.

Corporations aren’t merely groups of people, they have been granted additional legal rights like limited liability. I’m fine with laws that say something to the effect that in exchange for limited liability, corporations over a certain size must give some consideration to the employee welfare. Many countries require that workers have board representatives.

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