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Comment by pavlov | Hacker News Reader

Indeed. Many of these pirates are the most devoted fans of the music they store and distribute. They go to gigs, buy merchandise and vinyl editions, and otherwise support the artists directly.

In contrast companies like Spotify don’t care about the music at all. They would just as well sell you white noise if it would somehow give them the slightest improvement in growth or margins.

Daniel Ek, CEO of Spotify, regularly makes statements that suggest he’d rather see professional musicians disappear. Most recently:

https://www.nme.com/news/music/music-fans-and-artists-hit-ba...

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For indie artists, the vinyl release frequently comes with a download code for a digital version. Some bands even include lossless versions.

Spotify is a prime example of an amazing service (yet still no FLAC equivalent) offering with a highly developed customer base ruined by the love of money.

Spotify loves money so much it has yet to show a profit in almost 20 years.

Spotify posted €168M in profit for Q1 2024.

But executives loving money is a separate issue from whether the company is profitable or not.

Daniel Ek takes no salary but has filed to sell €165M in stock so far in 2024.

Executive compensation is part of a business’s expense, so it is not a separate issue from profit, since profit = revenue minus expense.

Also, Ek could have sold his equity years ago and made more money with less risk by sticking it in SP500. If he really loved money, wouldn’t he have gotten rid of stock in a business losing money and stuck it into something less risky?

My point is to say that Spotify is obviously in a difficult business, given the vendors it has to negotiate with, the competitors it has to compete with, and the customers it has to sell to. It is not some conspiracy or excess short term greed by executives that is hampering its success or ability to pay artists.

>Executive compensation is part of a business’s expense [...]

Right. So when you said this..

>Spotify loves money so much it has yet to show a profit in almost 20 years.

..was your point that Spotify, the company, doesn't love money, even if the executives might?

Spotify “loves” money implies that Spotify is penny pinching because it is in such a powerful position that it can afford to alienate customers, whereas my point is Spotify is probably making a calculation to reduce expenses because it is not even known if it is a viable business yet.

Spotify’s executive compensation is what it is, it is still a large organization managing 9k employees with 600M customers, so they obviously want a carrot to work. Shareholders and board members can vote on compensation they think is undeserved.

In fact, Ek hasn’t even received compensation since 2017, so he’s just been offloading his existing equity from being a founder from way back when. And since Spotify stock has lost money relative to the market for 7 years, Ek has been working for free. He literally could have more money if he had quit working years ago.

https://fortune.com/europe/2024/04/29/daniel-ek-salary-spoti...

Another point to consider is that record labels also love money and may be ruining Spotify as per PP's comment.

As long as you can invest in growth, why not spend on that? The alternative is to report a profit and have it taxed.

Amazon did the same for a long time. It’s a fine strategy if your investors don’t need the immediate returns.

If the market believed there was growth potential, their annual returns would not be trailing SP500 by 3%+ per year.

Amazon’s market cap grew by much more than the SP500, because the market (correctly) anticipated Amazon being able to earn profits.

Spotify’s ability to earn decent profits is not a given, and in my opinion, their whole business is currently being a negotiating chip between the 3 businesses that own music copyrights (Warner/Universal/Sony) and Apple/Amazon/Alphabet.

Amazon invested in selling physical things and ran a loss forever until AWS became the real money maker.

Amazon was breaking even forever, it rarely lost money. Can’t easily find a chart of it going back to 2000 though.

And yet it's tech bro founder is a multibillionaire

Why is that relevant? The organization he has lots of equity in due to his negotiations as a founder has 600M customers and 9k employees. The public markets still believe it might be worth a few billion dollars for an organization that has 600M customers with recurring revenue.

The “tech bro” founder could have had billions of more dollars if he had dumped all his Spotify shares years ago.

It does not mean the organization is making a ton of money, or has any pricing power. An alternative is Visa or Verisign of Intuit or Microsoft or Qualcomm or Apple, those businesses have fat profit margins. Those businesses get to set their prices at the highest profit margins. Spotify barely limps along hoping one day it can eke out more than a low single digit profit margin consistently.

For sure, I mean to me, what.cd was the ultimate intersection of musicphiles (as opposed to audiophiles, though there's an overlap) and torrenters.

Spotify might not care as much about the music and the artists as pirates, but they sure pay the artists more.

Barely. Some artists outright tell you to pirate their music since most of their money comes from touring/merch.

I discover stuff on Spotify more than i would ever from pirating and only then i can go watch their live stuff and buy their merch. If I want a Flac i go to Bandcamp though

Makes me wonder if artists would see the same benefit then if piracy were legal and someone made a nice Spotify-like frontend for it. I think about how places like library genesis have to be so weirdly arranged because of how illegal they are.

Wasn't that essentially what Grooveshark was?

Ooh possibly! The name is familiar but I’ve forgotten entirely what it was like.

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