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

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

#291

Post by throwawayjava » Tue, Apr 03, 2018, 9:11 PM UTC

bsder wrote: post #261

WhompingWindows wrote: post #161

Earlier quoted context omitted.

You don't mention The Beatles, Led Zeppelin, and the 100's of other artists that Spotify streams millions of times. I feel DIY punk music and music that is "insanely easy to produce" is not going to make much of a dent in the massive demand for the classics/popular bands. Also, as a musician of 20 years having recorded multiple records, I don't agree good music insanely easy to make. The plethora of mediocre music ou…

Do the young really care about the back catalog anymore? I'm not just being snide. Think about Elvis. When was the last time you heard something from Elvis on the radio or in your stream?

It's definitely a sliding window. Elvis is not so important but stuff from the 1970's to the 2000's remains popular with kids.

Heuristic: parents pass on their teenage music preferences to kids but don't pass on their own parent's teenage music preferences to their kids?

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

#292

Post by seabrookmx » Tue, Apr 03, 2018, 9:12 PM UTC

lazerpants wrote: post #247

sksareen1 wrote: post #129

I wonder how you'd value Google Play Music alone based on this type of comp. Anyone have an idea of what the number could be like w/ rationale?

Apple Music and Google Play Music are each approximately half the size of Spotify (by subscriber). Assuming that the revenues for each service are similar (on a subscriber basis) and overhead would be similar if they were spun out, then you are just valuing them based on the number of current subscribers. Given the low friction in switching services, subscribers are around the same value for each service. My guess ba…

> low friction of switching services

I don't agree with this. Most people build up a catalog of songs/playlists on one platform and moving to a new one and re-discovering all your music is quite a pain in the ass. This was one of the main reasons I was a late adopter of Spotify (I work in the Music Industry).. there was no easy way for me to take local libraries/playlists and create Spotify playlists from them.

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

#293

Post by Audiophilip » Tue, Apr 03, 2018, 9:15 PM UTC

moistoreos wrote: post #282

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…

starting a new label would be a massive undertaking. maybe partner with Google and snag popular YouTube channel sign and distribute only within the Spotify ecosystem. HERE'S THE PROBLEM: Spotify doesn't pay shit to artists. They will have to increase the level of financial contribution to artists if they take this avenue.

Actually, they pay way better than most other streaming services: https://torrentfreak.com/artists-think-instead-spewing-spoti...

Quote: “I can tell you that Spotify has made me about 30% more than iTunes, Pandora, Amazon, Xbox Music, Google Play, eMusic, Rhapsody, Rdio, Deezer, MediaNet, Simky, Nokia, and MySpace Music combined in that period. Even if you tack on my checks from ASCAP to that long list, Spotify is still ahead,”

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

#294

Post by seabrookmx » Tue, Apr 03, 2018, 9:16 PM UTC

ebbv wrote: post #266

Company valued at $30 billion. Artists continue to receive almost nothing for their music being played. Something doesn't add up here.

> Artists continue to receive almost nothing for their music being played

This is kind of FUD. There's a lot of royalties flowing out of Spotify. While it's true the payouts for many artists are smaller than they should be, 90+% of artists simply get very few plays on Streaming services and thus make no money.

And Spotify isn't the only one to blame here. Most music goes through a process like this:

Artist -> Label -> Distributor -> Storefront

Spotify is only the storefront.. but both the Distributor (the "big three" labels UMG, Sony, and Warner do their own distribution) and the record label take a cut. There's also additional overhead for the artist, such as paying out to producers, writers (if they don't write themselves) etc.

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

#295

Post by armandososa » Tue, Apr 03, 2018, 9:17 PM UTC

cup-of-tea wrote: post #287

armandososa wrote: post #112

I am a closeted hobbyist musician in a rather small niche (contemporary christian music in Spanish LOL)but I don't want to live off my music. I just want to be heard by somebody. And today, trough distrokid plus spotify this is sooo posible. Which wouldn't have been in my wildest of dreams 20 years ago when I wanted to start a band with my friends. Or even 10, when I toured with a small time ska band. And since my go…

People have been able to listen to music over the Internet for about twenty years at this point. Why do you think you can only do it with Spotify?

I don't know, I'm just a happy user of Spotify. Distrokid allows me to publish on every platform with a click, most of which I have't used.

And from the big ones (Apple, Google, Amazon) I feel like Spotify is the most motivated to make the music thing work. I think discovery is the key here. For the others is a small side hobby.

And also you'd be surprised by the digital music scene in latin America. Most people still fill their android devices with pirated music. Spotify is one of the cheapest legal option.

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

#296

Post by dumbfounder » Tue, Apr 03, 2018, 9:17 PM UTC

mseebach wrote: post #288

bogomipz wrote: post #222

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." This seems to be a common refrain that Spotify can just "pull a Netflix." And this is very unlikely. Firstly no matter how much opriginal content they could create, if they don't have back catalog it's going to be a total non-starter for the mai…

Why the assumption that "to pull a Netflix", they will have to get rid of the back catalogue? Netflix has plenty of third-party content. I would assume that Spotify's music licences are highly variable cost, ie almost entirely pay-per-stream. All they need to do is to get people to stream less licenced content and more own-produced.

Because people expect broad coverage in their music service. When I ask alexa to play a song and she doesn't know it, I am like wtf? But I don't care if Netflix doesn't have every Matrix movie, I just watch something else.

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

#297

Post by rainbowmverse » Tue, Apr 03, 2018, 9:20 PM UTC

atwebb wrote: post #278

chime wrote: post #193

Earlier quoted context omitted.

Apologies if I come across as harsh but as a consumer, I would prefer my consumption activities to remain as private as possible. In light of FB news, I don't think even some Options > Privacy Settings on Bandcamp would be sufficient since most people wouldn't do it. I hope Bandcamp is opt-in for this info.

It's opt-out, I normally leave it checked, you get the option clearly when purchasing music/items. The artist can then send updates/you get follow notices, the volume is pretty low at the moment for me at least.

That's still generally seen as opt-in among marketing types, though I can understand the perspective where pre-checking the opt-in is a kind of opt-out.

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

#298

Post by ghaff » Tue, Apr 03, 2018, 9:22 PM UTC

heartbreak wrote: post #224

whatok wrote: post #72

Earlier quoted context omitted.

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

I don't know if Paul Lamere is on HN, but he's likely the best person to answer this question. Short answer: It's not all about user-fed listen data.

I've watched some of Paul's talks as well as seeing some of his early demos at Sun Labs. The bottom line is that discovery is really hard generally and, for the most part, no one has cracked it pretty much anywhere even when there aren't competing commercial interests.

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

#299

Post by headmelted » Tue, Apr 03, 2018, 9:22 PM UTC

mseebach wrote: post #288

bogomipz wrote: post #222

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." This seems to be a common refrain that Spotify can just "pull a Netflix." And this is very unlikely. Firstly no matter how much opriginal content they could create, if they don't have back catalog it's going to be a total non-starter for the mai…

Why the assumption that "to pull a Netflix", they will have to get rid of the back catalogue? Netflix has plenty of third-party content. I would assume that Spotify's music licences are highly variable cost, ie almost entirely pay-per-stream. All they need to do is to get people to stream less licenced content and more own-produced.

.. unless the music labels object to the conflict of interest.

Spotify has a lot of competitors biting at it's heels, they're certainly the largest (and IMHO, best) at what they do, but they've by no means locked up the market.

They're not exactly at the mercy of the labels, but they probably can't afford to piss them off either.

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

#300

Post by bogomipz » Tue, Apr 03, 2018, 9:23 PM UTC

sailfast wrote: post #233

bogomipz wrote: post #222

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." This seems to be a common refrain that Spotify can just "pull a Netflix." And this is very unlikely. Firstly no matter how much opriginal content they could create, if they don't have back catalog it's going to be a total non-starter for the mai…

How many shares do we think it would take to purchase a major record label at this point? What about a perpetual license to their content (since buying a label could be seen as anti-competitive)? This would certainly help avoid some of the down-side risk to the business. That said, their IPO didn't exactly help the company clear the working capital they'd need to do this.

Well there's no such things a "major record label" anymore. When people say "the Big 3" each of those three is global conglomerate. The result of years and years of consolidation.

Using the smallest of these 3 Time Warner Music Group, the company did $2.87 billion in revenue in 2013[1].

Let's say that Warner was actually interested in a sale. Let's say that the multiple they were looking for was 5x. Where is Spotify going to get the 15 billion dollars for that sale? Certainly not from this direct listing. And even if they had that cash what happens when you buy a 3,500 employee mega corporation? You actually have to run it and run it well.

[1] https://en.wikipedia.org/wiki/Warner_Music_Group