Spotify loss widens despite higher revenue
mediadecoder.blogs.nytimes.com
Spotify loss widens despite higher revenue
1–10 of 21 posts
Re: Spotify loss widens despite higher revenue
#2I can only wonder how much of the costs are fees to the music companies. Is there any way to figure out at all what Spotify , Rdio, etc have to pay to provide their selection?
Re: Spotify loss widens despite higher revenue
#3I can only wonder how much of the costs are fees to the music companies. Is there any way to figure out at all what Spotify , Rdio, etc have to pay to provide their selection?
I think it's 3 cents per a stream. 33 songs for a dollar. 330 for 10 dollars. Let's say 11 hours of music for $10 a month?
I think they're losing money on how many songs people listen to vs subscription cost. The advertisement isn't offsetting it.
Re: Spotify loss widens despite higher revenue
#4Spotify is a really bad deal from an investment point of view. For each dollar they stand to make profit, the record companies will up their license fees a dollar. Thus, there's no room for profit in companies like Spotify.
Re: Spotify loss widens despite higher revenue
#5As far as I understand it, each music subscription service negotiates it's own rates with the labels. There isn't an industry standard fee. So unless the fees have been publicly disclosed, it's a guess.
Re: Spotify loss widens despite higher revenue
#6I can only wonder how much of the costs are fees to the music companies. Is there any way to figure out at all what Spotify , Rdio, etc have to pay to provide their selection?
I think it's 3 cents per a stream. 33 songs for a dollar. 330 for 10 dollars. Let's say 11 hours of music for $10 a month? I think they're losing money on how many songs people listen to vs subscription cost. The advertisement isn't offsetting it.
I would have to think people paying the $5 or $10 subscription fee would be listening to more than 11 hours. Why would they price themselves so far under what it would take to turn even a tiny profit?
Re: Spotify loss widens despite higher revenue
#7Spotify is a really bad deal from an investment point of view. For each dollar they stand to make profit, the record companies will up their license fees a dollar. Thus, there's no room for profit in companies like Spotify.
That is exactly their problem. Spotify owns neither the customer nor digital contents.
They can play their "music discovery arbitrage" game till it grows big enough that their partners have enough incentive to step in and take over their business.
No different than what happened to Facebook app makers. Even Zynga's profit outlook is questionable as it is crystal clear from their latest filing...
Spotify's best bet is to sell themselves at the peak. But they are pretty expensive already.
Re: Spotify loss widens despite higher revenue
#8Spotify is a really bad deal from an investment point of view. For each dollar they stand to make profit, the record companies will up their license fees a dollar. Thus, there's no room for profit in companies like Spotify.
You are describing the classic example of a parasite that is so virulent it kills its host.
A more pragmatic music label will charge as much in license fees as they possibly can without killing Spotify.
Re: Spotify loss widens despite higher revenue
#9Spotify is a really bad deal from an investment point of view. For each dollar they stand to make profit, the record companies will up their license fees a dollar. Thus, there's no room for profit in companies like Spotify.
You are describing the classic example of a parasite that is so virulent it kills its host. A more pragmatic music label will charge as much in license fees as they possibly can without killing Spotify.
But... Spotify is the parasite and the record labels are the host.
Re: Spotify loss widens despite higher revenue
#10How can a company have income like that and still be that far in the hole? Where are the costs coming from? Obviously bandwidth is going to cost, but I can't imagine it takes that big a hunk of their profits. Obviously the top expense is going to be licensing which tells me the studios are really the ones killing Spotify. Does anyone else find it odd that the ones who determine how much of a profit or loss the company incurs are also the ones watching the business to see how well it does? Is this a case of the left hand having no clue what the right hand is doing, or are the studios intentionally trying to kill Spotify to make some kind of point? Maybe they're trying to make it seem like a streaming service can't succeed because of "rampant piracy", and use that as an excuse to get new legislation? Maybe the goal is something else entirely. All I know is I'd really like to see a breakdown of their monthly expenses.