Spotify files for its IPO

I’ve binge-watched a few series’ through several times.

I don't see the scales to be tipped as heavily as you're suggesting. Spotify alone can make or break an artist, even a "Big 3" one. If you want listenership, you absolutely need to be on Youtube, Apple or Spotify (or a platform like Soundcloud). There are zero relevant distribution channels for today's young listeners that are not streaming services.

Chance The Rapper is one of the biggest names in hip hop, and a relatively big personality in pop culture as a whole. He's fully independent. He signed an "exclusive" 2-week-long distribution deal with Apple for his last album, Coloring Book. Apple got exclusive streaming rights (for 2 weeks), and the artist got $500,000 cash – not an advance – as well as free marketing via Apple. This is the type of deal and the type of artist that will start changing things for the better.

There is a great report published by stat trackers BuzzAngle Music[0] from the past year. Here are some important numbers:

• Song Consumption for 2017 YTD was up 29.5% over 2016 YTD (1.5 billion song project units in 2017 YTD vs. 1.2 billion song project units in 2016 YTD).

• Audio streams reached 179.8 billion, up 58.5% over 2016 YTD.

• Subscription streams grew 69.3% and accounted for 78.6% of total audio streams in 2017 YTD, up from 73.6% in 2016 YTD.

• Overall album sales were down 13.9% compared to 2016 YTD (74.0 million in 2017 YTD vs. 86.0 million in 2016 YTD).

• Digital album sales in 2017 YTD were down 24.3% over the previous year (34.5 million in 2017 YTD vs. 45.6 million in 2016 YTD).

• Song sales (downloads) in 2017 YTD were down 23.8% compared to 2016 YTD (313.3 million in 2017 YTD vs. 410.9 million in 2016 YTD).

So now say you're a Sony exec and you're looking at these numbers. Can you afford to have ANY of your top talent pulled from Spotify? Consumption and streaming are rising and pure sales are falling. Megastars like Taylor Swift and Ed Sheeran are immune from these trends, basically, but if you want to stay culturally significant you will soon need streaming more than streaming needs you. That's my opinion.

0. http://www.buzzanglemusic.com/us-2017-ytd-report/

>"Spotify alone can make or break an artist, ..."

Really? Name one artist that Spotify has broken exclusively.

>"Chance The Rapper is one of the biggest names in hip hop, and a relatively big personality in pop culture as a whole. He's fully independent."

That's great but until there are enough Chance the Rappers Spotify needs the big 3's catalogs.

I'n not sure why you felt compelled to list all those statistics, nobody is suggesting streaming hasn't grown in popularity.

>"Can you afford to have ANY of your top talent pulled from Spotify?" Yes you certainly can. The streaming markets has no shortage of players now - Amazon, Google, Apple, Pandora, Deezer etc. Spotify needs the labels more than they need Spotify.

>Really? Name one artist that Spotify has broken exclusively.

You're really gonna have to go easy on me and realize I'm using the name Spotify as a means to blanket address all streaming services. Artists break on streaming almost exclusively these days, and I feel like you are with me on that. But in the interest of specific artists:

Spotify's playlist RapCaviar catapulted rapper Lil Uzi Vert from the underground into the stratosphere[0]:

“XO Tour Llif3” also made history on the May 6 Billboard Hot 100 as one of five hip-hop songs in the top 10, only the second time that Billboard’s preeminent chart featured five rap songs (Kendrick Lamar’s “Humble” was No. 1; Lamar’s “DNA” No. 4; Future’s “Mask Off” was No. 5; Kyle’s “iSpy” featuring Lil Yachty No. 6; and “XO Your Llif3” No. 10). Strikingly, these songs were getting little to no airplay on the nation’s hit-driven radio stations, traditionally, along with sales, the most powerful factor in determining a song’s Hot 100 placement. “Let’s be honest,” says a top major-label executive: “No cool kid is listening to top 40 radio.” Instead, those kids are glued to streaming services."

An underground hit on SoundCloud first, and then Spotify single-handedly turned this kid into a superstar. Lil Uzi Vert became one of the hottest rappers of 2017 due to Spotify's featuring of his single on a highly influential in-house playlist.

And more about streaming breaking artists, in general, from the same article:

"And in numbers that sometimes strain belief, users are opening their Spotify or Apple Music apps and streaming hip-hop and R&B tracks at nearly twice the rate as the next most popular genre (rock), according to the research company Nielsen."

>Amazon, Google, Apple, Pandora, Deezer etc. Spotify needs the labels more than they need Spotify.

People don't subscribe for the catalogues. The catalogues between services are so similar as to be completely negligible. If you pull your catalog from one service, you don't hurt the service you hurt yourself – all those subscribers simply won't listen to your music. Those are your customers now, whether you like it not.

I guarantee this is how a conversation goes between two people, one with Apple and one with Spotify, when talking about a new song rising in popularity:

A: Hey, did you hear That New Song by Artist? B: No, is it on Spotify? A: Nope, they are a Sony artist and only on Apple now. B: Oh, okay, have fun.

Artist – That New Song now has 0.5x listenership. Meanwhile, Universal is still streaming on both services and will completely own the charts.

Labels aren't in competition with streamers, they are in competition with each other. If one major pulls their catalogue from 1 of the big streaming services, they will lose any semblance of relevancy as now the other 2 major labels will own all charts and social listening. That's IMO.

0. http://www.vulture.com/2017/09/spotify-rapcaviar-most-influe...