A brilliant CEO in Elk and an unfortunate industry. It will be interesting to see how they face marginalization. The risk factors of Apple being able to retain 100% of their revenue while Spotify being forced to give away 30% back to Apple is kind of sad. It really does feel like there's continuously diminishing opportunities for companies to get in front of consumers without facing some sort of platform tax.
Spotify Form F-1
31–40 of 382 posts
Re: Spotify Form F-1
#32Earlier quoted context omitted.
If you'd have to bet, do you think it's going to go significantly up or down within the first few days?
I think taking either side of this bet would be foolish. You can usually (but not always!) bet on a Day 1 bump for a normal IPO, but there's no historical data for a direct listing of this size, and Spotify might overprice it just because, hey, why not, they get more money and without underwriters the strong incentive to underprice disappears. If you're not working for a huge bank, stay away from this until it stabil…
> Spotify might overprice it just because, hey, why not, they get more money and without underwriters there are no clients to disappoint
Spotify isn't pricing it, they aren't even selling shares. The initial pricing will come directly out of the order book whenever it lists. It's really unusual. Read the plan of distribution section:
https://www.sec.gov/Archives/edgar/data/1639920/000119312518...
Re: Spotify Form F-1
#33Earlier quoted context omitted.
I think taking either side of this bet would be foolish. You can usually (but not always!) bet on a Day 1 bump for a normal IPO, but there's no historical data for a direct listing of this size, and Spotify might overprice it just because, hey, why not, they get more money and without underwriters the strong incentive to underprice disappears. If you're not working for a huge bank, stay away from this until it stabil…
> Spotify might overprice it just because, hey, why not, they get more money and without underwriters there are no clients to disappoint Spotify isn't pricing it, they aren't even selling shares. The initial pricing will come directly out of the order book whenever it lists. It's really unusual. Read the plan of distribution section: https://www.sec.gov/Archives/edgar/data/1639920/000119312518...
Presumably they'll still have an initial Ask price though? Unless I'm misunderstanding something.
Re: Spotify Form F-1
#34A few early thoughts:
I think about half of their 2017 net loss was due to something to do with Convertible Notes, that they're explaining on pages F-43 and F-44.
I'm trying to calculate patio11's "fundamental equation of SAAS" ( https://twitter.com/patio11/status/965985835790184448 ) for the numbers for churn, subscribers, and ARPU on pages 67 to 70ish. Will update if I actually figure it out.
Ok, here is my attempt for their premium service:
pp68, 2017 ARPU = 5.32 EUR/mo.
pp69, 2017 Churn = 5.5%/mo.
pp79, 2017 Customer Acquisition, 48 Million at end of 2016, 71 Million at end of 2017. (71 - 48) / 48 * 100% = 48%. To convert to monthly, if I just divide by 12 it is 4%/month. If I do (1.48)^(1/12) it is 3.3%. I guess this is net of churn, So their fresh acquisition I would estimate at 5.5% + 3.3% = 8.8%.
I'll leave the math as an exercise to the reader, partly because I don't know what is being summed over in the formula.
I'd be curious to know at what number of users do they break-even if their cost of revenue, sales, and marketing are linear to users and their other non-financial costs remain fixed.
Re: Spotify Form F-1
#35They've gone from 28 million to 71 million premium subscribers in 3 years with a declining, single digit, churn rate. I'm impressed. I'm a happy Spotify customer, I hope they continue their growth and become a pillar of the music industry.
Same. I'm a Spotify lifer unless something catastrophic happens to their service or media availability. The only alternative service I even debated about was Apple Music when they first announced their streaming service, but there is no clear advantage to their service and I hate the Apple Music UI. I hope they find a way to help a bigger % of the revenue get into the hands of artists and start cutting out the big re…
I was an Apple music since launch(till a month back). But once I tried Spotify and the playlists, I switched instantly. While Apple Music is a competitor, it's not everywhere like Spotify is and their recommendations are horrible. In all time using them, I discovered 2 songs that I liked. With 4 weeks on Spotify, I'm already at 25!
Re: Spotify Form F-1
#36They've gone from 28 million to 71 million premium subscribers in 3 years with a declining, single digit, churn rate. I'm impressed. I'm a happy Spotify customer, I hope they continue their growth and become a pillar of the music industry.
Same. I'm a Spotify lifer unless something catastrophic happens to their service or media availability. The only alternative service I even debated about was Apple Music when they first announced their streaming service, but there is no clear advantage to their service and I hate the Apple Music UI. I hope they find a way to help a bigger % of the revenue get into the hands of artists and start cutting out the big re…
I really don't want to change this discussion into a "which is the best music streaming service" debate, but I am really curious, why haven't your considered Google Play Music? Interface? Songs count? Price?
I am subbed to GPM for a few years now. I did it first because Spotify was and still isn't available in my country, but I don't think I would switch if they become available tomorrow.
Re: Spotify Form F-1
#37Earlier quoted context omitted.
Excuse me, but Spotify is not profitable, or I miss something? "For the years ended December 31, 2015, 2016, and 2017, we incurred net losses of €230 million, €539 million, and €1,235 million, respectively" How is it better than Twitter?
I haven't reviewed yet but from the synopses above, it sounds like they are generating FCF / are cashflow positive? "Profitability" can mean many things (FCF, NI, EBIT, EBITDA, OIBA, GAAP-figures, non-GAAP, etc)... But cash is king in reality so FCF generating isn't a bad meaning here.
Their net cash flow from operations is increasing, but they have negative cash flow from some investing activities (licensing music? buying startups?), which makes total cash flow negative.
EBIDTA is also negative.
Re: Spotify Form F-1
#38I really hope Spotify succeeds. I've mentioned this before on Hacker News, but as an artist, the algorithmic playlists are amazing. On a good week I get ~4,000 new listeners. It's incredible. Discovery Weekly drives the most but Release Radar and Radio also send a good chunk. Apple Music on the hand hasn't even verified my artist profile— which I need in order to view analytics. So I don't even know if people listen…
I also hope Spotify succeeds because this is not an area where Google, Apple, and Amazon bring anything unique or need to succeed.
Re: Spotify Form F-1
#39Earlier quoted context omitted.
> Spotify might overprice it just because, hey, why not, they get more money and without underwriters there are no clients to disappoint Spotify isn't pricing it, they aren't even selling shares. The initial pricing will come directly out of the order book whenever it lists. It's really unusual. Read the plan of distribution section: https://www.sec.gov/Archives/edgar/data/1639920/000119312518...
Presumably they'll still have an initial Ask price though? Unless I'm misunderstanding something.
I guess it depends on whether they're issuing new shares, or just allowing the trading of any existing shares already held by people.
Re: Spotify Form F-1
#40I really hope Spotify succeeds. I've mentioned this before on Hacker News, but as an artist, the algorithmic playlists are amazing. On a good week I get ~4,000 new listeners. It's incredible. Discovery Weekly drives the most but Release Radar and Radio also send a good chunk. Apple Music on the hand hasn't even verified my artist profile— which I need in order to view analytics. So I don't even know if people listen…
On the other side of this, I love how easy it is to find new music on Spotify! Every week, the "Discover Weekly" playlist nets me at least one or two new artists I end up loving.
I've found I almost exclusively listen to "Discover Weekly" and "Release Radar" during my commutes, and every now and then grab a song for some playlists for other times.
I do wish there were better ways to shape what songs end up in there as sometimes it can be a bit of a miss.