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

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

#211

Post by hkmurakami »

ericwood wrote: post #101
albertgoeswoof wrote: post #16

Earlier quoted context omitted.

Are blue apron and stitch fix tech companies? I thought they were just sending out boxes of stuff to subscribers, with a website/app for taking orders?

I used to work at Blue Apron...sending people boxes of perishables is actually a very tough problem to solve and there was extensive tech powering the warehouse side of things. We had a fairly large engineering team working on these problems. At the end of the day who really cares what is and isn't a "tech company"? Every company has a tech aspect to it these days.

It matters because of the multiples you get on the market.

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

#212

Post by whatok »

fspacef wrote: post #194
toomuchtodo wrote: post #148

Earlier quoted context omitted.

Spotify could then turn into a label + live music organizer, giving artists more of a cut and cutting out labels entirely.

This. The money in the game doesn't come from just direct sales and hasn't for quite sometime. In the same vein an artist can get a million streams and still make >$5000. [1] In recent years artists like Drake have started their own labels and collaborated directly with tour organizers to generate different sources of income and cut out middlemen. While it's difficult to imagine Spotify generating hit music at the sa…

> In recent years artists like Drake have started their own labels and collaborated directly with tour organizers to generate different sources of income and cut out middlemen.

Drake starting his own "label" is not a new innovation he came up with (rappers been doing that since the 90s) and still comes with just as many middlemen. Emphasis on last sentence in quote.

>During the composition of Nothing Was the Same, Drake started his own record label in late 2012 with producer Noah "40" Shebib, and business partner, Oliver El-Khatib. Drake sought for an avenue to release his own music, as well helping in the nurturing of other artists, while Shebib and El-Khatib yearned to start a label with a distinct sound, prompting the trio to team up to form OVO Sound.[297] The name is an abbreviation derived from the October's Very Own moniker Drake used to publish his earlier projects. The label is currently distributed by Warner Bros. Records.

https://en.wikipedia.org/wiki/Drake_(musician)#OVO_Sound

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

#213

Post by decacorn »

andromedaworld wrote: post #197
_zachs wrote: post #168

Earlier quoted context omitted.

Starting their own label is exactly what they need to do to remain competitive. It's exactly what Netflix ended up doing and I think it's turning out pretty well for them. I wouldn't be surprised if Spotify tried poaching higher-level strategy people from Netflix.

The problem with this approach is that there's so much music out there because it is way cheaper to make music than it is to make films and shows. Even if spotify was somehow able to sign the top artists, they just couldn't keep up with the influx of new artists coming up every single day. Music lovers also tend to be very particular and nuanced about their taste in music. Therefore, if I as a consumer don't find my…

same could be said about movies and tv shows. and netflix had no problem exploiting a market opportunity (produce actual quality content unlike the plethora of vapid crap currently pumped out on the mainstream media networks). so not hard to believe spotify can take the same approach. whether they can be successful is the big question.

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

#214

Post by mfoy_ »

andromedaworld wrote: post #197
_zachs wrote: post #168

Earlier quoted context omitted.

Starting their own label is exactly what they need to do to remain competitive. It's exactly what Netflix ended up doing and I think it's turning out pretty well for them. I wouldn't be surprised if Spotify tried poaching higher-level strategy people from Netflix.

The problem with this approach is that there's so much music out there because it is way cheaper to make music than it is to make films and shows. Even if spotify was somehow able to sign the top artists, they just couldn't keep up with the influx of new artists coming up every single day. Music lovers also tend to be very particular and nuanced about their taste in music. Therefore, if I as a consumer don't find my…

Also I can listen to the same album over and over for hours on end, but once I've watched a TV series or movie I am unlikely to revisit it again for a decade. So exclusive TV/movie content has a "novelty appeal" that music doesn't.

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

#215

Post by cheshire137 »

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)?

I tried Google Play Music for a time, kept having trouble where songs would stop playing in the middle. Sometimes it would stop playing one song and skip to another track, other times it would just stop playing entirely. I don't want to hunt down the app and try to massage it into playing the song I want, it just needs to work, which Spotify gives me.

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

#217

Post by komali2 »

POTUS wrote: post #206
kgwgk wrote: post #153

Earlier quoted context omitted.

> Spotify was first for on-demand streaming in the modern era I guess that’s true if you define the “modern era” as “starting with Spotify”.

Help me out, I genuinely can't think of a music streaming service that came before Spotify. I vividly remember being blown away by their product when it came to market. I remember because I had never seen anything like it and literally didn't believe it could be done at that time. I was waiting for a train and could just search for any song and play it right away from my phone, no downloading, no waiting, just instan…

Pandora radio started in 2000 : https://en.wikipedia.org/wiki/Pandora_Radio

Myspace was a popular way to share music, if limited.

Youtube, again though this doesn't fully fit the definition.

Anybody know about soundcloud? I know I was using that before I heard of spotify but I'm not sure if it came out beforehand.

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

#218

Post by wilsonnb »

ChuckMcM wrote: post #74
synaesthesisx wrote: post #27

I do love Spotify as a product, however I don't think it will scale the same way Netflix does. Spotify is at the mercy of major record labels, and as their books become more transparent the record labels will squeeze every dollar they can for licensing. That is, unless they find a way to upend the record industry entirely. Spotify has a unique position with their amazing discovery/recommendations engine- they could p…

> Spotify is at the mercy of major record labels For now. They have a large enough reach to essentially "become" a major record label, all they need is to start signing artists to contracts.

Starting their own label is not going to make the labels that they depend on very happy, and as such would be a very bad idea until it's impossible for the labels to survive without Spotify.

Spotify definitely doesn't have enough market share for that to be true, and it's not clear that they ever will. Youtube has always had more free listeners than Spotify and Apple Music is set to surpass Spotify in number of paid listeners sometime this summer.

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

#219

Post by adventured »

exclusiv wrote: post #202
adventured wrote: post #116

Earlier quoted context omitted.

It's very doubtful that Disney is or could be an serious issue for Netflix now. Netflix is approaching - or already larger than - the size of Disney's comparable entertainment business, and Netflix is growing relatively fast whereas Disney's business isn't growing much or at all. Disney's studio division does $8.3 billion in sales. Their media networks arm, which includes ABC & ESPN, does $23 billion. Netflix will hi…

Yeah I agree that Disney won't be a serious issue for Netflix. You may see some users cut Hulu or Prime out and add Disney but Netflix is still in a good place. > Apples to apples in terms of where they compete, Netflix will be comparable to or larger than Disney in size in 2018 or 2019. For share of streaming wallet yes; but they hover at only about 5% of net income. So Disney doesn't need to be anywhere near the su…

> they hover at only about 5% of net income. So Disney doesn't need to be anywhere near the subscriber amount to reinvest heavily in content and acquisition

That's not quite the context. Netflix is rapidly growing sales and plowing its potential income into content expansion.

Disney has zero sales growth, with a large traditional investor base that expects profits to at a minimum not contract. That traditional investor base holds Disney to a particular standard that Netflix doesn't have to suffer (for now). Disney can't reinvest any more of their existing sales & profit toward content creation without subtracting from the profit figure they report. If they do that at any meaningful scale, the stock will crater.

Disney's situation is actually even worse than that, as the erosion of cable is eating into their solidly profitable TV business (especially ESPN). So they're facing a declining context on sales, profit and margin, and they can't afford to redirect a meaningful share of their existing profit.

Simply put, right now Disney has no sales growth to direct at new content investment. They have existing profit that is already allocated to placating investors that expect the net income statement to look great and expect the dividend to remain or increase. This is why Disney is looking to spend a vast sum to buy business expansion with Fox, to perhaps placate shareholders a while longer (how long will they tolerate zero growth otherwise?).

Netflix gets to operate on different terms of shareholder expectations than what Disney does.

Otherwise, Netflix would have a market cap about 90%-95% lower than it is right now, if Netflix (~220 PE) were being judged on a more near-term profit basis as Disney is (~14-15 PE). It's the exact same growth expectation benefit that is being given to Amazon ($3b net income) vs Walmart (~$14b net income).

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

#220

Post by epicide »

andromedaworld wrote: post #197
_zachs wrote: post #168

Earlier quoted context omitted.

Starting their own label is exactly what they need to do to remain competitive. It's exactly what Netflix ended up doing and I think it's turning out pretty well for them. I wouldn't be surprised if Spotify tried poaching higher-level strategy people from Netflix.

The problem with this approach is that there's so much music out there because it is way cheaper to make music than it is to make films and shows. Even if spotify was somehow able to sign the top artists, they just couldn't keep up with the influx of new artists coming up every single day. Music lovers also tend to be very particular and nuanced about their taste in music. Therefore, if I as a consumer don't find my…

I think we might be seeing a shift in how people consume music that Spotify is (better?) positioned to take advantage of.

First and foremost, I agree that Spotify will struggle if they try to compete with other services on providing all artists.

It seems like listeners (or perhaps a subset) are listening by genre rather than by artist. I know genres and waves of music are nothing new, but with the lower barriers to creation as well as to consumption [1], we are seeing the number and frequency of new genres and sub-genres increase dramatically.

Anecdotally, I find myself using radio based music a lot more. E.g. I have a Synthwave station on SoundCloud that I listen to. I think this style is further exemplified with the popularity of sharing Spotify playlists. This is also why I think Spotify in particular are ahead -- the very people who would listen to Spotify published content are the people that already use Spotify.

In fact, I think this style better fits a lot of people who would use a streaming service in the first place. A lot of the people who want to listen to their favorite artists question the idea of paying for a subscription to maintain access to their favorite albums.

Of course, if Spotify goes this route, they are not alone. They would have to compete with services like SoundCloud and BandCamp. I think they could find success by toeing the line between major label content and indie content.

[1]: e.g. a "bedroom musician" can make their album over the course of a few weeks and then that album gets bought and listened to by someone thousands of miles away within minutes/hours of release. No printing copies, shipping, stocking, ticket purchasing, etc.

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