15 years as a business, 200 million subscribers globally, cumulative losses in the billions, zero profit.
How does the CEO keep his job?
How does the CEO keep his job?
> It distributes approximately 70% of its total revenue to rights holders (often record labels), who then pay artists based on individual agreements.[12]
Plenty of services are rising their prices and lowering their offerings (HBO, I am looking at you). Which is also trash, and I am allowed to make value judgements on those as well.
If you love podcasts, and need your Joe Rogan, then spotify is for you.
It's like the executives decided to force podcasts into a music player. All the podcast value adds like gap trimming, adjustable playback speed, slight rewind on restarts that last longer than a few seconds... they've omitted.
Indie artists are probably the worst off, making something like $0.003 per stream. So a modestly successful independent artist with 100,000 monthly listeners is making $300/month or $3600 a year. So why do they bother? Well, you get mixed in with more notable acts so maybe someone googles you and finds your bandcamp, where you can capture 80% of the revenue. I know artists who made more money selling cassettes on bandcamp in one month than they did on Spotify the whole year.
Either way it shouldn't take a decade fo figure out, they are not curing disease or developing spacecraft. How did Tower Records and HMV do it? They didnt have Spotify's monopoly position and had to compete against Walmart and Best Buy.
Probably forcing people to buy 15-20$ cds when all people wanted was that one 99 cent song.
$15 in 1985 is about $40 adjusted for inflation and they convinced people to buy the same music multiple times. To even find that music you liked enough to buy multiple times too you probably bought 5 albums that you thought sucked.
I can remember as a kid in the 80s too that my father and all his friends easily had 500+ vinyl albums on display in their homes. Then those started collecting dust as they bought hundreds of cds.
It is just so different now. Imagine spending $40 bucks for 10 songs and have no idea if you will even like them. That is a totally different racket.
Spotify would lose a huge portion of its userbase (nearly all) surely
but more interestingly, record labels lose that revenue (which I'm guessing has to be one of their main sources of income for their finished product: the artist's music)
How is Spotify not able to negotiate a deal better than 70% given that leverage?
The computers and software that delivers the music is the commodity with no moat, the music is copyrighted and the record label is the only place to get it from.
- 1b subscribers - after THAT: 10% profit margin
Look, spotify is still growing fast. They aim for 20% MAU growth YoY, and they are actually achieving it: they added 23M new MAU between Q2 and Q3 last year, around 40% of those new users were premium subscribers. New numbers for Q4 will be released today.
They are still trying to capture the whole market. After doing that they will flick the lever to profitability over growth. The current goals are set for 2030. Only if Ek deviates from the growth trajectory too much he will be dropped as CEO.
I can't tell is this is sarcasm ... it's sarcasm right? There is no "lever to profitability".
Is it because they aren't profitable just yet? How many more years are you willing to wait?
bam, growth -> profitability!
Very interesting, they’re doing the Uber model essentially
Ek clearly communicated this during the Q2 2022 call.
He keeps his job because he's promising that once an inflection point is reached, you become more aggressive about turning a profit. It's both your and mine guess on what that could be, but I think starting that procedure with a 200M paid subscriber base isn't the worst idea.