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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

#101

Post by danieltillett »

jrowley wrote: post #91
spriggan3 wrote: post #88

Earlier quoted context omitted.

> Spotify waste so much money on their employees, who effectively do very little Plenty of businesses waste money on some employees who effectively do very little, like diversity officers, equality consultants and such useless positions ... The problem isn't them , the problem here is Spotify unstustainable business model, period. They will go down, sooner or later. The fact that they had to take a loan means they ca…

A diversity officer isn't necessarily a waste of money. They can be crucial for ensuring a solid company culture that levages talents from a diverse pool of people. If you make your company inhospitable to groups of employees based on their race or religion you are only hurting your bottom line.

You shouldn’t need a diversity officer to stop your business being inhospitable to employees on the basis of background - this should be core to your business culture. It is like having a come-to-work-and-get-stuff-done officer.

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

#102

Post by danieltillett »

owenversteeg wrote: post #10

Jesus Christ, that's not clickbait, those really are devilish terms. It's debt, they lose $200MM of shares at the time of IPO, and they very well could end up paying 15% interest yearly on this. And when the IPO happens, if it follows the general IPO trend and tanks at first, it's very possible TPG and Dragoneer will want to get out -- dumping 1.2 billion of Spotify onto the market and absolutely destroying the share…

What I don’t understand is why they are raising this money? Do they expect that they are about to get into an all out war with Apple?

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

#103

Post by jrowley »

danieltillett wrote: post #101
jrowley wrote: post #91

Earlier quoted context omitted.

A diversity officer isn't necessarily a waste of money. They can be crucial for ensuring a solid company culture that levages talents from a diverse pool of people. If you make your company inhospitable to groups of employees based on their race or religion you are only hurting your bottom line.

You shouldn’t need a diversity officer to stop your business being inhospitable to employees on the basis of background - this should be core to your business culture. It is like having a come-to-work-and-get-stuff-done officer.

Well I agree, ideally this should be automatic and inherent to a business, but when a company gets to a certain size you need people to be really thoughtful and consciously focused about this stuff, otherwise it can slip. So sometimes growth necessitates a dedicated person thinking about these issues.

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

#104

Post by p4wnc6 »

jevinskie wrote: post #97
estreeper wrote: post #49

This doesn't seem that surprising. 2014 Revenue: $1.3 billion (up 45% from 2013) 2014 Net Loss: $197 million (up from $68 million loss in 2013) That's a lot of money to be bleeding and losses are increasing even as revenue grows. If you wondered why they got terms like this, that would explain it. You can call it getting "strategic resources" if you like, but I call it running out of cash. http://www.nytimes.com/2015…

Is this because their product offering is not as good as their competitors? I switched to Spotify over services like streaming radio (Pandora) and cloud music storage (Amazon Music) a couple of years ago. Haven't looked at the competition much since. I heard that Apple Music, the one potential competitor I was considering switching to, was buggy. I've been frustrated with Spotify bugs in the past but have found that…

I discontinued my Spotify service about 18 months ago because I went through the process of deleting my Facebook account, and the backend Spotify account was linked to it.

It turned into a pretty unexpected ordeal, I had to call Spotify customer service, they asked me if I could reactivate my Facebook account just for this, have them "fix" it, then deactivate again, etc. At the time Spotify Linux support wasn't very good either (don't know about now).

Anyway, I switched to Amazon Prime Music because I was already a Prime customer and figured that paying nothing beyond the Prime subscription was perhaps better than paying $8 or whatever Spotify's rate was then.

I am really glad that I did it. Amazon Prime Music has consistently worked extremely well for me on iPhone and iPad and in browser. With standard AT&T 4G service, even here in rural Indiana, I have no trouble streaming from Amazon when I go running.

The major downside is that their music catalog is not as comprehensive as Spotify. But I've found that there are only a handful of artists that I really love which I can't listen to yet on Amazon (Beirut being the one that I really miss).

The catalog is very large though. They have any type of music you're looking for, from country-western to African to the latest and greatest unheard-of indie artist. They just don't have exhaustive coverage of all of them.

If you are an extreme audiophile type and you really need to have completely exhaustive coverage of every possible artist, then Amazon won't work for you. But if you try out Amazon and find that it mostly covers the artists you enjoy and you don't really need the exhaustive coverage, and you happen to subscribe to Prime, then it's a great option.

Full disclaimer: I am not a fan of Amazon in general, but I am a fan of good products, and for casual music streaming from most, but not all, artists, I think Amazon is probably the best service available right now.

The way I break it down:

Spotify --> You require on-demand access to absolutely every imaginable artist, you enjoy heavy integration with social media clients.

Apple --> You may want to purchase the music, house it in iTunes, and own fully offline copies (not just caching, which other services can do too).

Amazon --> You're more casual about it than either of the above cases and you already have Prime. You either mostly listen to Top 40 stuff, or else for the less common stuff, you verify ahead of time that Amazon offers a catalog in that area that's good enough for you. You probably don't care about owning the music, but you still can purchase it via Amazon if you want to.

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

#105

Post by barumrho »

chvid wrote: post #61

Would Spotify able to at some point simply just pay off the debt by issuing more stock or raise money from an alternative source?

Sounds like that doesn't seem likely. They are just going to wait for IPO to happen so that the debt converts, effectively deferring valuation to the market.

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

#106

Post by thirdsun »

jevinskie wrote: post #97
estreeper wrote: post #49

This doesn't seem that surprising. 2014 Revenue: $1.3 billion (up 45% from 2013) 2014 Net Loss: $197 million (up from $68 million loss in 2013) That's a lot of money to be bleeding and losses are increasing even as revenue grows. If you wondered why they got terms like this, that would explain it. You can call it getting "strategic resources" if you like, but I call it running out of cash. http://www.nytimes.com/2015…

Is this because their product offering is not as good as their competitors? I switched to Spotify over services like streaming radio (Pandora) and cloud music storage (Amazon Music) a couple of years ago. Haven't looked at the competition much since. I heard that Apple Music, the one potential competitor I was considering switching to, was buggy. I've been frustrated with Spotify bugs in the past but have found that…

Rather a sidenote: Surprisingly enough I think that none of the current services, including Spotify, hold a candle to what rdio, now shutdown, had to offer. I was shocked to learn just how far behind Spotify, Apple Music, Tidal, Deezer or Google Music were when I had to look for an alternative. It's really bad. That was a very common reaction among ex-rdio users.

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

#107

Post by p4wnc6 »

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…

I've always been very put off by their rah rah support for Agile. In many ways, I think Spotify cargo cults on the Netflix culture document, but they don't actually have a tech culture identity that they've created for themselves, they just make a big fuss about Agile, oppressive open-plan spaces, and fancy parties.

I think Spotify is a great example of why job candidates should look before they leap when it comes to agreeing to be managed in an Agile process or made to work in an open-plan office.

Unfortunately, I agree with you that these types of situations can be good for unproductive employees who want to hide somewhere within a company that might look good on the resume.

I can't say it definitively about Spotify since I have never worked there. All I can say is that the mixture of status signalling open-plan office + needless opulence + Agile strongly suggests dysfunction.

It's further discomforting that they plan to use this money for marketing according to the article. That seems like a big gamble. It's somewhat of a signal that they fundamentally believe what they have engineered is good enough and satisfies customers, and now they just need to generate spam to get more customers.

For a company at their stage and market penetration, I'm not sure this makes a lot of sense. I think Spotify might actually do better by creative innovative new engineering features and improvements, rather than just trying to lever up the number of subscribers for what will more or less be the product they have right now.

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

#108

Post by p4wnc6 »

jrowley wrote: post #103
danieltillett wrote: post #101

Earlier quoted context omitted.

You shouldn’t need a diversity officer to stop your business being inhospitable to employees on the basis of background - this should be core to your business culture. It is like having a come-to-work-and-get-stuff-done officer.

Well I agree, ideally this should be automatic and inherent to a business, but when a company gets to a certain size you need people to be really thoughtful and consciously focused about this stuff, otherwise it can slip. So sometimes growth necessitates a dedicated person thinking about these issues.

More often, the person is just a token hire who functions more to ensure legal deniability on the company's part for anything that might pop up related to a diversity issue.

I hope more companies hire diversity officers for the sake of thinking hard about how to ensure that policies and company behaviors aren't harmful.

But for me it's a "I'll believe it when I see it" sort of thing. The default belief has to be that it's just a token position for the sake of legal deniability, just as most of HR has evolved into.

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

#109

Post by x0x0 »

danieltillett wrote: post #102
owenversteeg wrote: post #10

Jesus Christ, that's not clickbait, those really are devilish terms. It's debt, they lose $200MM of shares at the time of IPO, and they very well could end up paying 15% interest yearly on this. And when the IPO happens, if it follows the general IPO trend and tanks at first, it's very possible TPG and Dragoneer will want to get out -- dumping 1.2 billion of Spotify onto the market and absolutely destroying the share…

What I don’t understand is why they are raising this money? Do they expect that they are about to get into an all out war with Apple?

All out war for streaming customers with apple and google.

Someone is going to collect $10 (plus $1 or $2 increase every couple years) per month for a huge segment of the music listening population for basically the rest of our lives. Spotify want it to be them.

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

#110

Post by x0x0 »

thirdsun wrote: post #106
jevinskie wrote: post #97

Earlier quoted context omitted.

Is this because their product offering is not as good as their competitors? I switched to Spotify over services like streaming radio (Pandora) and cloud music storage (Amazon Music) a couple of years ago. Haven't looked at the competition much since. I heard that Apple Music, the one potential competitor I was considering switching to, was buggy. I've been frustrated with Spotify bugs in the past but have found that…

Rather a sidenote: Surprisingly enough I think that none of the current services, including Spotify, hold a candle to what rdio, now shutdown, had to offer. I was shocked to learn just how far behind Spotify, Apple Music, Tidal, Deezer or Google Music were when I had to look for an alternative. It's really bad. That was a very common reaction among ex-rdio users.

What do you miss?
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