Spotify opens on NYSE, valuing company at almost $30B • Hacker News Board

Re: Spotify opens on NYSE, valuing company at almost $30B

#81

Post by TremendousJudge » Tue, Apr 03, 2018, 5:53 PM UTC

paxy wrote: post #52

guelo wrote: post #23

I just don't see how this can be a successful company long term. If the labels see any profit they will demand more fees at the next deal negotiation. To become music's Netflix they would have to produce their own music which people want to listen to, which is a lot easier said then done. The easiest route is probably to become Tidal and give the company away to a few big artists in exchange for exclusives.

The equivalent would be to start their own label and sign artists. It's hard, sure, but not impossible. They have the same advantage Netflix did - an intimate knowledge of people's musical tastes and habits. Plus they have already shown willingness to diversify into other areas - merch, concerts, original shows, videos etc.

The thing is, Netflix now is very different from Netflix 5 years ago -- most of the content is the one they produce. Music doesn't work this way, many people just want to listen to old music while it's rare for people to rewatch old shows and movies. There are many albums I have listened to tens of times, and I don't think I have ever watched a film more than three or four times. If the labels pull the artists to make their own Spotifies, Spotify will be left with pretty much nothing, in a situation much worse than Netflix

Re: Spotify opens on NYSE, valuing company at almost $30B

#82

Post by [deleted] » Tue, Apr 03, 2018, 5:54 PM UTC

chimeracoder wrote: post #69

JumpCrisscross wrote: post #43

Earlier quoted context omitted.

> Spotify was under contractual requirements to go public, due to the terms of their last fundraising round Spotify was under obligation to do an IPO. Part of the motivation for this structure was avoiding that penalty language.

> Spotify was under obligation to do an IPO. Part of the motivation for this structure was avoiding that penalty language. To be specific: they did a DLP, not an IPO. Underwriters make sense for IPOs, because the company is raising money. There's no point to an underwriter in an DLP, because the company isn't raising money. They were not under requirements to hold an IPO; they were required to provide public liquidit…

[deleted]

Re: Spotify opens on NYSE, valuing company at almost $30B

#83

Post by occamrazor » Tue, Apr 03, 2018, 5:54 PM UTC

pure_ambition wrote: post #61

How is Spotify raising capital from this if it's not selling shares directly? Will it wait until later to offer stock directly to the markets?

They aren’t raising any capital. This is an opportunity for the shareholders (and maybe for employees with stock options) to cash out.

Re: Spotify opens on NYSE, valuing company at almost $30B

#84

Post by JumpCrisscross » Tue, Apr 03, 2018, 5:55 PM UTC

chimeracoder wrote: post #69

JumpCrisscross wrote: post #43

Earlier quoted context omitted.

> Spotify was under contractual requirements to go public, due to the terms of their last fundraising round Spotify was under obligation to do an IPO. Part of the motivation for this structure was avoiding that penalty language.

> Spotify was under obligation to do an IPO. Part of the motivation for this structure was avoiding that penalty language. To be specific: they did a DLP, not an IPO. Underwriters make sense for IPOs, because the company is raising money. There's no point to an underwriter in an DLP, because the company isn't raising money. They were not under requirements to hold an IPO; they were required to provide public liquidit…

> They were not under requirements to hold an IPO; they were required to provide public liquidity to their shareholders

No, their SHA specifically said they paid penalties if the IPO happened after a certain date (roughly speaking). If no IPO ever happens, no penalty is owed. It's cheeky, but apparently it works. (In any case, nobody will sue after today's performance.)

Re: Spotify opens on NYSE, valuing company at almost $30B

#85

Post by samfriedman » Tue, Apr 03, 2018, 5:56 PM UTC

whatok wrote: post #72

whitepoplar wrote: post #55

Earlier quoted context omitted.

Discover Weekly

Who is listening to all of this self-published music to get training data for Discover Weekly?

I'd imagine that the self-published music gets discovered by a few people and put into playlists, then more people who follow those playlists discover those songs, and then they percolate upwards through layers of algorithmic and editorial Spotify playlist generation including Discover Weekly.

There's also the Fresh Finds playlists, which work a little differently by surfacing unknown songs that "tastemakers" have been listening to.

Re: Spotify opens on NYSE, valuing company at almost $30B

#86

Post by fortythirteen » Tue, Apr 03, 2018, 5:57 PM UTC

ttul wrote: post #64

fortythirteen wrote: post #9

> The company says that in 2018, shares traded on the private markets between $90 and $132.50. > Losses for last year were 1.2 billion Euros ($1.47 billion), which compares to 539 million Euros ($661 million) the year before. Well, there's the short of the year.

May I introduce you to the Efficient Market Hypothesis ( https://en.wikipedia.org/wiki/Efficient-market_hypothesis ).

So nobody turned a profit by correctly shorting TWIT or FIT as soon as possible or by jumping in on FB when it plummeted to Tech stocks are regularly IPO'd on pure hype, and the market will regularly turn on them when they don't understand the business model.

Re: Spotify opens on NYSE, valuing company at almost $30B

#87

Post by Thrymr » Tue, Apr 03, 2018, 5:58 PM UTC

guelo wrote: post #23

I just don't see how this can be a successful company long term. If the labels see any profit they will demand more fees at the next deal negotiation. To become music's Netflix they would have to produce their own music which people want to listen to, which is a lot easier said then done. The easiest route is probably to become Tidal and give the company away to a few big artists in exchange for exclusives.

> To become music's Netflix they would have to produce their own music which people want to listen to

Which would make them (like Netflix) one exclusive content provider (potentially among many) which is fine for them if they can get good content, but not great for users who may find music fragmented like streaming video. The great thing about Spotify now is that they have access to nearly everything. Netflix has a decent streaming library of TV series, but their movie archive is terrible compared to the red envelope DVD.com option (or Blockbuster in its prime). It would be a shame for that to happen to music, too.

Re: Spotify opens on NYSE, valuing company at almost $30B

#88

Post by Nullabillity » Tue, Apr 03, 2018, 5:59 PM UTC

komali2 wrote: post #47

I'm not quite clear on why people are choosing spotify over google play music - to me the google option is superior in UI and offerings (including ad-free youtube). Am I missing something? Is it just one runs better on iPhones or is more hip (like why people choose snapchat over instagram or something)?

For me it's:

- Better discovery

- Much cheaper (150kr/mo for 6 subscriptions, vs 100kr/mo for one with GPM)

- A desktop client (even if it's a crappy electron one)

- YTRed isn't available here anyway

Re: Spotify opens on NYSE, valuing company at almost $30B

#89

Post by whatok » Tue, Apr 03, 2018, 5:59 PM UTC

synaesthesisx wrote: post #56

whatok wrote: post #53

Earlier quoted context omitted.

And how is anyone supposed to sift through all that garbage to find something worthwhile?

Personalized playlists, artist radios etc. The point is you don't have to sift because they do it for you.

The GP's post was implying that it's easier to bypass traditional gatekeepers (labels) by self-publishing on Spotify. I don't see how either of your recommendations solves the problem of the flood of self-published releases in a "labels are no more" scenario.

Re: Spotify opens on NYSE, valuing company at almost $30B

#90

Post by unethical_ban » Tue, Apr 03, 2018, 5:59 PM UTC

komali2 wrote: post #47

I'm not quite clear on why people are choosing spotify over google play music - to me the google option is superior in UI and offerings (including ad-free youtube). Am I missing something? Is it just one runs better on iPhones or is more hip (like why people choose snapchat over instagram or something)?

Spotify was first for on-demand streaming in the modern era, even before Google or Apple Music. Its radio/recommendations are better than Pandora, and I haven't tried others.

I think Spotify's UI is fantastic, and its multi-device awareness is functional and intuitive. To your point, Google does have ad-free Youtube, but the ads don't bother me enough/I don't watch enough Youtube for it to impact me like it does with music.

Finally, I like diversity sometimes; giving not-Google money is a plus, all other things being equal.