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Spotify raises $1B in debt with devilish terms to fight Apple Music

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Re: Spotify raises $1B in debt with devilish terms to fight Apple Music

#71

Post by beatpanda »

ibnaks wrote: post #65

Can anyone honestly enlighten me as to why Spotify matters? I've used it once and never got past finding anything to listen to while on SoundCloud I was drawn in without even thinking about it and have nearly 60 songs that I wouldn't have found otherwise. Not trolling, I want to find what they offer since I hear about them in the news way more than SoundCloud.

They have everything I want to listen to with very few exceptions and their Discover section is gold. I've found several of my recent favorite artists through Spotify. And being able to listen to any music, any time, is amazing. Soundcloud is mostly unknown artists and amateurs, and I feel like that's great if you're an artist and you need a dsitribution paltform, but that's too much crap to wade through for me.

Re: Spotify raises $1B in debt with devilish terms to fight Apple Music

#72

Post by ohitsdom »

I have no idea about financial terms so not commenting on that, but as a product Apple Music doesn't even compare with Spotify. Apple Music is garbage. I made it 3 days into their free 3 month trial before moving on to try Google Play Music. Google's isn't bad, but for me Spotify is clearly the best of the bunch (curated playlists, great discoverability, lots of variety). Apple Music was really buggy both on an iPhone and Windows PC using iTunes. You can't just play all top songs nonstop, playback randomly stops, it's slow and just feels clunky navigating around.

Only reason I tried out competitors is to try and save money, but after my trial with Google Play Music I'll just commit to Spotify at full price.

Re: Spotify raises $1B in debt with devilish terms to fight Apple Music

#73

Post by criley2 »

iMiiTH wrote: post #64
criley2 wrote: post #56

Earlier quoted context omitted.

The modern desktop app is at a point where it's pretty solid, but I still miss that old 0.80.x branch or whatever the final non-chromium verison was. But you know what? Google doesn't have a desktop app for Google Music. Amazon doesn't have a desktop app for Amazon Prime. Apple doesn't have a desktop version... so yeah, despite the fact that Spotify's only-one-in-the-business desktop app isn't perfect, it does exist.…

The desktop app is nothing special, just another web-view. Put Amazon or Google Music into Fluid and you have the same functionality minus media key control.

That's not true at all. It's more than a web view as it supports more functionality, for example the open.spotify.com website does not supported a nested folder structure, but, on desktop I create something like http://i.imgur.com/pOMwTeB.png. It also has the integration between phone and multiple devices, unlike web, so I can control my desktop app from my phone (full control of desktop from phone, and vice versa)

Re: Spotify raises $1B in debt with devilish terms to fight Apple Music

#74

Post by ohitsdom »

ibnaks wrote: post #65

Can anyone honestly enlighten me as to why Spotify matters? I've used it once and never got past finding anything to listen to while on SoundCloud I was drawn in without even thinking about it and have nearly 60 songs that I wouldn't have found otherwise. Not trolling, I want to find what they offer since I hear about them in the news way more than SoundCloud.

Spotify is the best streaming option IMO. Absolutely great discovery with curated playlists.

Re: Spotify raises $1B in debt with devilish terms to fight Apple Music

#75

Post by beatpanda »

It's going to be a huge bummer if Spotify goes out of business -- I pay for Spotify Premium, I absolutely love it, and their clients for Linux and Android are fantastic. I have a strong suspicion that Apple is not going to let me listen to music on the devices I own.

Re: Spotify raises $1B in debt with devilish terms to fight Apple Music

#76

Post by mrharrison »

themartorana wrote: post #38
Negative1 wrote: post #15

This is significant. It shows a do or die attitude and a fact that many companies at this level are not self-aware enough to recognize; that their competition (Apple) will kill them, or, they will dominate this space. Will be interesting to see how this plays out.

It helps that Apple Music has been relatively terrible from the start. I fully expect them to get significantly better, but after Rdio died (RIP, and I got over my mourning) I did the Apple Music trial plus a couple months. Both the wife and I found it incredibly difficult to navigate and understand. Spotify has been much, much better. That said, Apple Music is only going to get better, and fast.

My friends, family and I have had a completely opposite reaction. We have all ditched Spotify for Apple music because it integrates with our apple tv, and other devices so well. Beats radio is also pretty good for music discovery, with Deadmau5 and Pharrell having their own DJ spots.

Re: Spotify raises $1B in debt with devilish terms to fight Apple Music

#77

Post by joshjkim »

mrep wrote: post #51
joshjkim wrote: post #40

Earlier quoted context omitted.

Good point - it's all or nothing for Spotify, they are not profitable at current scale and need critical mass re: subscribers + defense against Apple, and if they don't get there, then they are dead anyhow.

> they are not profitable at current scale How? They are making approximately a 1 billion dollars a year (30 million subscribers * $10/month * 12 months/year * 30% cut). Their engineers are probably paid less too since they are not based in the US. The only thing i can suspect that they are blowing that much money on is marketing but even that just seems ridiculous unless they are losing that much on the freemium use…

There's a couple answers here - as you mentioned, marketing is a huge cost, and they have to support a massive global ad sales organization as well to support the free tier.

IMO, what's really more problematic and complicated is their economic arrangement with the major labels, which, while ostensibly "70/30" is actually way more complicated than that. The article does a decent job of explaining it: http://www.theverge.com/2015/5/19/8621581/sony-music-spotify...

TL;DR: to induce a major label to sign, Spotify had to give them a sweetheart deal, including minimum per stream payments, minimum % of ad revenue, and free ad space.

The really tricky things to consider are: usage-based and per subscriber minimums. Hard to determine exactly, but it's highly possible that Spotify is much worse off than the 30/70 spotify/label split.

Also, note that there's a good chance the contract is already re-negotiated since that was published, and given Apple Music, likely not in Spotify's favor.

Re: Spotify raises $1B in debt with devilish terms to fight Apple Music

#78

Post by mdorazio »

mrep wrote: post #51
joshjkim wrote: post #40

Earlier quoted context omitted.

Good point - it's all or nothing for Spotify, they are not profitable at current scale and need critical mass re: subscribers + defense against Apple, and if they don't get there, then they are dead anyhow.

> they are not profitable at current scale How? They are making approximately a 1 billion dollars a year (30 million subscribers * $10/month * 12 months/year * 30% cut). Their engineers are probably paid less too since they are not based in the US. The only thing i can suspect that they are blowing that much money on is marketing but even that just seems ridiculous unless they are losing that much on the freemium use…

We won't know for sure until they file for IPO and release their financials, but remember that Spotify doesn't own any music. Every stream they play they have to pay the artists/labels for, so their margins on subscriptions are probably slim to start with. LinkedIn also tells me they have over 2,200 employees, which to me is insane. Even if their salaries are merely market average, that is a huge chunk of change they are paying in labor costs. Add in office space, marketing spend, server/bandwidth fees, etc. and you get to where they are today.

Re: Spotify raises $1B in debt with devilish terms to fight Apple Music

#79

Post by adzm »

jsprogrammer wrote: post #31

Why would Spotify need $1B? Is most of this money used to license content?

> ... [out of] €1.08bn of revenues, €882.5m (£636m) was spent on royalties and distribution costs.

http://www.theguardian.com/technology/2015/may/11/spotify-fi...

Re: Spotify raises $1B in debt with devilish terms to fight Apple Music

#80

Post by philliphaydon »

criley2 wrote: post #56
philliphaydon wrote: post #50

Spotify waste so much money on their employees, who effectively do very little. I know a designer who has been there 2 years, basically sits in meetings and gets sent to different countries, and has added nothing to their portfolio. Yet gets reviews and raises and bonuses... Then there's all the parties they host for their employees, etc. It's not a company I would invest in if I had any money to begin with. Also tha…

The modern desktop app is at a point where it's pretty solid, but I still miss that old 0.80.x branch or whatever the final non-chromium verison was. But you know what? Google doesn't have a desktop app for Google Music. Amazon doesn't have a desktop app for Amazon Prime. Apple doesn't have a desktop version... so yeah, despite the fact that Spotify's only-one-in-the-business desktop app isn't perfect, it does exist.…

I closed my account about 3 months after they changed the desktop app. Haven't tried since. May give it another to.
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