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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

#111

Post by Splines »

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…

Both Spotify and Pandora are losing money on a consistent basis. IMO streaming music is a losing business, and the only way a provider is going to stay in the market is because they have other services that complement the music.

I love Spotify and am a daily user but honestly it's going to take a lot of work to turn things around for them.

Content acquisition costs are killer and are not something that can go away.

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

#112

Post by Splines »

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 majority of their costs come from buying content. In 2014 they spent 70% of their revenue on labels and artists.

Fundamentally they have a bad business model. Good on them for ditching Taylor Swift - while she is very popular the financials likely showed the ROI for having her on the platform was negative.

IMO Spotify is going to either need to change how their business works or make some painful cuts to become sustainable.

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

#113

Post by ghaff »

x0x0 wrote: post #109
danieltillett wrote: post #102

Earlier quoted context omitted.

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.

And Amazon which doesn't have as good a library but which includes it for "free" for Prime customers and which now has an Echo device that is gaining some attention?

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

#114

Post by rokhayakebe »

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…

But if they cut down spending 10-15% they could be profitable.

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

#116

Post by danieltillett »

x0x0 wrote: post #109
danieltillett wrote: post #102

Earlier quoted context omitted.

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.

Is there any reason to think that this market is a winner take all? The labels will do anything to prevent another Apple arising including backing any upstart that wants to challenge the big players. When you are just a middle man it is hard to create a monopoly.

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

#117

Post by mbrock »

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.…

Pretty solid is a bit of an exaggeration in my case.

About once a day, my MacBook's fans start spinning like crazy. By now I know... oh, it's "Spotify Helper" stuck in a loop again, lemme force quit it.

Before I reinstalled, instead Spotify would show me "there's a new version!" every single day, seemingly without upgrading anything.

These serious quality issues, plus the horrifying visual ads (for playlists and new albums) make Spotify a product I kind of love to hate.

I mostly dig the iOS version though.

But I'm still angry with how these services transform the idea of "music player" into "streaming client hooked into the commercial music industry."

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

#118

Post by bentlegen »

rdli wrote: post #57

Not sure why it's so devilish. They basically raised $1B in cash on a 20% discount, no valuation cap. Basically, they're agreeing with the investors that they can't figure out a valuation for the company -- so they're deferring that until an IPO and have the public market sets the valuation. There's a lot of bellyaching here about the dilution for the existing shareholders. But I don't see how that's any different fr…

> the reality is that no institutional investor can sell a 10% (or whatever) stake in a public company overnight

They can, however, sell much of it during the 3 month head start they will have over everyone else.

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

#119

Post by bentlegen »

x0x0 wrote: post #110
thirdsun wrote: post #106

Earlier quoted context omitted.

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?

I was an Rdio subscriber from 2010 until it shut down, and I've been a Spotify subscriber since. I can name a few things:

1) Discovery. Rdio would inform me when new albums are out by artists I listen to. Spotify doesn't. Rdio's "Artist Stations" were also much better – not only did they not repeat (like Spotify's do), they also let you choose whether you wanted to hear "more" or "less" of the artist themselves while listening to their station.

2) Social. I miss seeing my friends faces next to albums, letting me know that they'd listened to it. I also miss the "Network Heavy Rotation" view, that showed trending albums by friends/users I follow. I miss that a user's profile would show you what albums they've been listening to frequently lately. Spotify only tells you what track a friend is listening to right now, and their profile shows you what artists. So, awesome, you know your friend is listening to Bowie, but you don't know which of Bowie's 20 albums they're into.

3) Your collection. Rdio had no upper bound on saved albums (that I'm aware of). I've already peaked the maximum number of saved songs in Spotify – it literally won't let me "save" anything else without going through my existing albums and choosing something to remove.

4) Playlist searching. Spotify by default names your playlist according to the first song you've added. You have to go out of your way to give it a different name. This means there are TONS of playlists in Spotify that are named "Nirvana" purely because that was the first song in the playlist. It massively pollutes searching and makes finding good playlists tough. Also, there's no sensible ranking of playlists – Rdio would at least tell you which were the most popular, which was usually good enough.

There are about another dozen things I could name, but I'll stop here. Spotify has felt like a giant step backwards from Rdio, and I think I'm going to explore alternatives soon.

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

#120

Post by deepakg »

bentlegen wrote: post #119
x0x0 wrote: post #110

Earlier quoted context omitted.

What do you miss?

I was an Rdio subscriber from 2010 until it shut down, and I've been a Spotify subscriber since. I can name a few things: 1) Discovery. Rdio would inform me when new albums are out by artists I listen to. Spotify doesn't. Rdio's "Artist Stations" were also much better – not only did they not repeat (like Spotify's do), they also let you choose whether you wanted to hear "more" or "less" of the artist themselves while…

> Rdio would inform me when new albums are out by artists I listen to. Spotify doesn't.

Spotify does, but you need to follow the artist from the artist page. I get a push a notification on the iPhone and a notification on the Mac desktop app. That said, sometimes an album being out doesn't necessarily mean it being available on Spotify in your country.

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