Spotify doesn't make profit from music streaming, despite having over 400M monthly active users, because it pays two-thirds of all its revenue to the rights holders.
Spotify doesn't make profit from music streaming, despite having over 400M monthly active users, because it pays two-thirds of all its revenue to the rights holders.
Despite being the king of music streaming, Spotify is struggling financially, but why?
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Sometimes, I see some of the takes on here, and it's hardly surprising that the fediverse isn't particularly popular.
Spotify are somewhat responsible for their current position. They hired too many people, extended into markets they didn't need to enter, and have a CEO that has blown money in places that didn't need it. Let's not forget that Spotify spent $300m on sponsoring FC Barcelona, which could have allowed Spotify to employ ALL of the employees it laid off for 1-2 years. Spotify had no need to give $200m to Joe Rogan, either! That's half a billion spunked up the wall on decisions that have done nothing for the company but cause grief. Instead, they could have focused their efforts on paying more out to smaller artists that provide the long tail for their service, while also making deals to promote merch and tour dates where possible.
With that being said, if you think that Spotify didn't play a huge part in making music streaming accessible you're just being contrarian for no reason. They provided (at the time) a solid application, good connectivity with services like last.fm, and had the social connection sorted from the start. Once phones took off, Spotify removed the need for mp3's for the majority of people, largely killing iTunes. Spotify was the winner of the music streaming wars.
Frankly, a lot of people were praising Spotify for their "good" severance package, but IMO shareholders should be livid, and should be calling for a new person at the helm.
removed the need for.mp3s
Im not sure this was a win
It didn't buy the format and then cancelled it, it did it purely by providing a more convenient way of listening to music than downloading mp3s, so yes, it's a win
I personally think mp3's are more convinient. I don't have to use multiple subscriptions to access to platforms exclusivities , i don't need to worry about songs becoming unavailable. I have a big playlist on spotify with a lot of grayed out songs. Also, local music players are a lot better than any streaming service player.
Yeah, people often forget about the gray ones, even on yt music my music playlist that works fine on the video app, has some songs greyed out when I tried to listen to it inside yt music.
Also it hasn't, because having your actual collection on a streaming service is leagues less convenient than a bunch of mp3s on a hard drive.
I doubt Joe Rogan and Barcelona has only caused grief. There’s a reason huge companies throw absurd amounts of money on advertising and right deals. It’s often lucrative and worth it.
As we don’t have the numbers we can only speculate in what return they got on those deals. But it was most definitely not 0.
Tour deals, merch and independent artists are great, but you do not reach critical mass when it comes to a general audience that way. It’s basically like trying to advertise on the Fediverse versus advertising on Reddit.
Marketing like that doesn't have solid numbers. Did sponsoring FC Barcelona cause people to signup to Spotify? How many? How much revenue did they get from each one?
Even when people fill in the "where did you hear about us?" option during signup, the data there is murky, at best. You can try to do tracking like "we saw a 20% increase in signups during and immediately after FC Barcelona games", but that's still just a proxy measure. Maybe it isn't 20%, but more like 2%, and that could easily be noise.
These deals tend to have an amorphous "increase in brand awareness" that has little hard data to back it up.
I can take your word for it, or I can consider the fact that basically every major company in the world does it. Somehow I don’t think it’s totally useless.
Yeah, that dude's take reads just like climate science denial and flat earth conspiracies.
People who are good at marketing have convinced people with money to do it, yes.
Yeah spotify did wind up how most people listen to music, and podcasts. They had what people wanted and made it cheap. Then they also made a lot of decisions that wasted money. Dont know for certain but i doubt the exe there stopped geting big bonuses or pay cuts over those decisions
In it's whole history, Spotify only made profits in two quarters and if I'm not wrong the other streaming services aren't profitable either so it doesn't looks to me that the problem is just over hiring but the nature of streaming business itself You also underestimate the power of sponsorship especially sponsoring sport. I'm sure a lot of people are using Spotify just for that. Investing in podcast make sense because it's more profitable than music, Spotify need to diversify it's revenues. You said that Spotify have good connectivity with lastfm but that's not true. Most of issues lastfm users have with lastfm is related to Spotify.
Spotify has a lot of Blockbuster energy, but with a mixture of something far worse, since they did indeed stand by Rogen and profit off him.
IMO shareholders should be livid
Why? Shareholders gave Spotify billions of dollars - they expect the company to spend that money. Shareholders are quite capable of depositing their own money in a bank if they didn't want it to be spent.
My take is Spotify hired over 5,000 employees over 2020 and 2021 when the economy looked great. Then Russia Invaded Ukraine in 2022 screwing the global economy and particularly Europe which is Spotify's biggest market. They've laid off about half the people they hired, which is unfortunate... but it's understandable. The couldn't have foreseen the economic shift.
Spotify removed the need for mp3’s for the majority of people, largely killing iTunes
Huh? Apple's music service has about a hundred million users. Up from eighty million a few years ago. Spotify has more than twice that, but iTunes is hardly dead.
Apple Music the music subscription service is different from iTunes the music purchasing store. When’s the last time you heard of anyone buying an individual song / album on iTunes?
I still buy music on iTunes. I prefer having my collection available on CD, but if I only want a single track or two, I just go to iTunes and buy the songs. This year, I think I bought 4 songs. It isn't ton, but it is still in my mind.
When’s the last time you heard of anyone buying an individual song / album on iTunes?
I’m yet to hear a first time, and I remember when mp3s first became a thing.
You’ve never heard of someone buying music on iTunes?
Genuinely, never. It wasn’t that popular in my country.
I hear people buying music from Bandcamp everyday
R.I.P. Bandcamp
What happened to Bandcamp?
It was purchased by Epic Games a year ago, who recently sold it to Songtradr, a licensing platform for background/'mood' music. Songtradr only retained 50% of existing Bandcamp staff (the rest were laid off a few weeks after the sale AFAICT, with the worst affected departments including Bandcamp's editorial team and customer support. Epic Games handled the severance package, for some reason.)
People are pretty upset about the editorial team being laid off because it provided exposure for smaller/niche artists in a weekly publication. I've never checked it out personally checked it out because I never knew it existed - wishing I had now
Such a large layoff so quickly by the new owner feels like a sign of darker times ahead for Bandcamp IMO, seeing that it's apparently been profitable since 2012 (Wayback link, new owners have nuked this from the site?). No need to milk the cow even more when the bucket is full...
Yarrrrrr
This is the way
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Sometimes, I see some of the takes on here, and it's hardly surprising that the fediverse isn't particularly popular.
You genuinely think the reason the fediverse isn't popular is because people have negative opinions of Spotify? As if these opinions wouldn't also be prevalent on Reddit? As if having to see opinions you didn't agree with was ever holding reddit back to begin with?
And yeah, Spotify made music streaming accessible, but the overall problem is they did what all tech companies at the time did: burned money to establish themselves hoping the profit would come later.
You're praising them for killing iTunes, but maybe iTunes didn't need to be killed. Maybe breaking markets with a type of streaming that wasn't profitable and fucked over artists has given us a few years of good streaming, but the honeymoon is coming to an end, and we'll all be worse off when the stockholders start demanding profit.
Same thing that happened with YouTube, basically. Company runs something at a loss for so long they've effectively broken the market and now that it's time to make money, we're all fucked over.
No it's not because people here don't like Spotify, but the stupid ass takes y'all have that lead to Spotify hate bleed through in half the other content on here that people don't like either.
That fact that you thought ops comment was about disliking Spotify specifically reinforces it.
This problem existed on reddit too but it seems concentrated here, like all the people with shit takes who got ignored on reddit came here so there voice could be heard.
I wish the fediverse the best but at this point it feels like it'll never progress past the few hundred thousand point due to the highschool level analysis of socioeconomic problems.
Exactly. The amount of insufferable people with absolute shit takes that wouldn't stand in the real world is amazing here on lemmy
YouTube is fucking you over because they're trying to get rid of freeloaders? How entitled.