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Spotify have reached 40M paying subscribers

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Re: Spotify have reached 40M paying subscribers

#51

Post by jasode »

k-mcgrady wrote: post #48
jasode wrote: post #13

Earlier quoted context omitted.

>So that's like ~$400M of income per month? Friendly fyi... if we're talking about a company's financials instead of a human's salary, the precise term would be "revenue" instead of "income" . Income would be revenue minus costs. Spotify doesn't have any positive income.[1] >Their expenses are mostly royalties and those are probably spare change compared to that income. No, it's not "spare change". In fact, the unfav…

>> "In fact, the unfavorable licensing terms" According to the source you posted Spotify has been given favourable license terms since it started whereas competitors like rdio have had to pay more and have since went bust.

>According to the source you posted Spotify has been given favourable license terms

I can see why that report's statement is confusing.

To clarify, that sentence was only comparing Spotify's "better" licensing terms to Rdio. It's about the licensing costs relative to a competitor.

However, in absolute numbers, it's a licensing cost percentage that's still too expensive. Spotify wants to renegotiate the percentage to be less than 50%. Spotify's "better" rate of 55% compared to Rdio 60% did not meet this more favorable threshold to turn a profit.

The "favorable licensing terms" I was talking about was in absolute terms (company profitability) and not relative terms (compared to another competitor).

Re: Spotify have reached 40M paying subscribers

#52

Post by dyeje »

k-mcgrady wrote: post #45
helthanatos wrote: post #9

Spotify has achieved what no normal entity could. Go them for having a relatively decent free to play with, I'm assuming, a good pay to play model as well.

Free to play won't be around long imo. Since Spotify first launched for me in 2009 the free offering has got progressively worse. The second the labels can drop freemium they will and I don't think we're too far away from that.

How has the free offering gotten worse?

Re: Spotify have reached 40M paying subscribers

#53

Post by k-mcgrady »

jasode wrote: post #51
k-mcgrady wrote: post #48

Earlier quoted context omitted.

>> "In fact, the unfavorable licensing terms" According to the source you posted Spotify has been given favourable license terms since it started whereas competitors like rdio have had to pay more and have since went bust.

>According to the source you posted Spotify has been given favourable license terms I can see why that report's statement is confusing. To clarify, that sentence was only comparing Spotify's "better" licensing terms to Rdio. It's about the licensing costs relative to a competitor. However, in absolute numbers, it's a licensing cost percentage that's still too expensive . Spotify wants to renegotiate the percentage to…

I still don't think referring to it as (un)favourable makes sense. It's simply the cost of doing business. If Spotify can't convince enough people to pay them enough money to cover the costs of acquiring the content that's their problem. If I can't afford rent on my shop because not enough customers are coming in that's my problem not the landlords. I can try to renegotiate a lower price as can Spotify but given how much competition they have it'll be difficult and if they can't get a lower price it's not unfair.

Re: Spotify have reached 40M paying subscribers

#54

Post by k-mcgrady »

dyeje wrote: post #52
k-mcgrady wrote: post #45

Earlier quoted context omitted.

Free to play won't be around long imo. Since Spotify first launched for me in 2009 the free offering has got progressively worse. The second the labels can drop freemium they will and I don't think we're too far away from that.

How has the free offering gotten worse?

I haven't used Spotify free in a long time but originally the only difference between free and premium was ads and offline mode. AFAIK there are many more limits on free now.

Re: Spotify have reached 40M paying subscribers

#55

Post by kcherukuri23 »

bearcobra wrote: post #33

I wonder how many of these 40M users are like me and are searching for other options. I'm using Spotify because of an intro offer, and my Google Play account exists almost solely for the discount on other content. Both have enough annoying design quirks that I've also tried Tidal and Apple Music, but their recommendation engines left me wanting more. Based on my love of Rdio, I'm really hoping Pandora's rumored new s…

I think one of Apple Music's main strategic points is to sign a lot more upcoming and big-name artists like Drake, DJ Khaled, etc. and push toward more exclusive content to draw subscribers

Re: Spotify have reached 40M paying subscribers

#56

Post by bearcobra »

k-mcgrady wrote: post #43
bearcobra wrote: post #33

I wonder how many of these 40M users are like me and are searching for other options. I'm using Spotify because of an intro offer, and my Google Play account exists almost solely for the discount on other content. Both have enough annoying design quirks that I've also tried Tidal and Apple Music, but their recommendation engines left me wanting more. Based on my love of Rdio, I'm really hoping Pandora's rumored new s…

Take a look at Apple Music again. They just started doing two personal weekly playlists (like Spotify's Discover Weekly). One is full of tracks you haven't listened to before (it seems pretty good so far) and the other is a weekly 'favourites' mix which seems to be 90% stuff in your library and 10% stuff not in your library but by artists you like (e.g. new releases). It's really good. I was using a mix of Spotify an…

I'll take another look. One of the things I miss most about Rdio was an option to pick how "adventurous" I wanted my personalized playlists to be, so that favorites option would be a nice switch from the Discover Weekly model

Re: Spotify have reached 40M paying subscribers

#57

Post by solaxun »

bearcobra wrote: post #33

I wonder how many of these 40M users are like me and are searching for other options. I'm using Spotify because of an intro offer, and my Google Play account exists almost solely for the discount on other content. Both have enough annoying design quirks that I've also tried Tidal and Apple Music, but their recommendation engines left me wanting more. Based on my love of Rdio, I'm really hoping Pandora's rumored new s…

I know it's easy for me to be an armchair quarterback but I have to say it. Although I am currently and somewhat reluctantly paying for it (for now), Spotify's UI makes me want to strangle someone every time I use it. I can never remember exactly what ridiculous combination of screens I need to cycle through in order to get where I want to go. It feels like I'm trying to enter a fucking launch code for a nuclear submarine just to play a damn song. God forbid I'm running and hit the wrong screen, then I have to stop, fiddle for 3 minutes, and start again.

Also the stations are incredibly shallow. If you pick a station on Pandora, you will have 100+ songs that are generally well selected in my experience. If you pick one on Spotify, you get maybe 20-30 songs.

The one major benefit to Spotify is that you can pick any song you want, you're not forced into stations. However, if you pick a genre, you're likely to be inundated with shitty cover bands that you have to painfully sift through in order to find the actual playlist your looking for, because '70's hits' could be anything from Led Zepplin to your next door neighbours cover band.

TLDR - incredibly over complicated UI, shallow stations, too much spam music.

Re: Spotify have reached 40M paying subscribers

#58

Post by nicolas_t »

JTon wrote: post #12
helthanatos wrote: post #9

Spotify has achieved what no normal entity could. Go them for having a relatively decent free to play with, I'm assuming, a good pay to play model as well.

In Canada, one of the major wireless providers offers Spotify premium accounts bundled in with mid and high tier data lines (i.e. 2 years of Spotify premium "for free"). So I wonder what other providers around the world do this, and how many of the 40mm are part of this group.

I have accounts on both Deezer and Spotify because of bundled accounts on wireless providers. So far I prefer Spotify but only because of the Discover Weekly feature.

Re: Spotify have reached 40M paying subscribers

#59

Post by jasode »

k-mcgrady wrote: post #53
jasode wrote: post #51

Earlier quoted context omitted.

>According to the source you posted Spotify has been given favourable license terms I can see why that report's statement is confusing. To clarify, that sentence was only comparing Spotify's "better" licensing terms to Rdio. It's about the licensing costs relative to a competitor. However, in absolute numbers, it's a licensing cost percentage that's still too expensive . Spotify wants to renegotiate the percentage to…

I still don't think referring to it as (un)favourable makes sense. It's simply the cost of doing business. If Spotify can't convince enough people to pay them enough money to cover the costs of acquiring the content that's their problem. If I can't afford rent on my shop because not enough customers are coming in that's my problem not the landlords. I can try to renegotiate a lower price as can Spotify but given how…

>I still don't think referring to it as (un)favourable makes sense. It's simply the cost of doing business. If Spotify can't convince enough people to pay them enough money

Got it and I totally understand exactly what you're saying. It's a matter of perspective and what you said is also true.

That said, let's put some context and boundaries around "unfavorable terms" when it's used to analyze Spotify's financial situation.

If we use an alternative perspective of measuring how Spotify can compete with Apple who has solidified an anchor price[1] of $9.99, it means that Spotify is heavily pressured to not be more expensive than that.

Yes, Spotify could theoretically charge more such as $11.99 to cover the higher licensing percentages of 55% or 58% but they probably feel that it kills their demand curve.

Spotify's pricing has to work in between "free" (piracy) and Apple's $9.99. They don't have the leverage or differentiation to convince consumers to pay $11.99.

So one perspective is that Spotify needs to increase subscription prices to whatever level they need to in order make a profit and to hell with losing millions of customers to Apple's $9.99 deal. Possible eventual outcome is that Spotify dies in bankruptcy because of dwindling user accounts.

The other perspective is that $9.99 is a too much of a consumer-ingrained psychological price so don't bother fighting it. The better chance of survival is to renegotiate with the record labels for more "favorable terms" so it's possible to make a profit at $9.99.

So far, the digital music streaming business can't figure out the money puzzle to make everybody happy. Many consumers already think that $120 a year is too much to pay. At the same time, many artists believe they get too little money[2].

tldr; Spotify can't lose a price war

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

[2]http://www.digitalmusicnews.com/2015/09/24/my-song-was-playe...

Re: Spotify have reached 40M paying subscribers

#60

Post by boodm »

odabaxok wrote: post #15
exmuslim wrote: post #2

So that's like ~$400M of income per month? Their expenses are mostly royalties and those are probably spare change compared to that income. Not bad!

Here it is 5.99 EUR (~6.8 USD) / month. So, based on that price, it should be like ~$270M. Also, you can have a family subscription for 6 people for 8.99 EUR (~10.1 USD). I wonder, if such subscriptions are counted as one, or for every member separately.

$4.99 for US students: https://www.spotify.com/us/student/
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