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So Apple has enough money coming in from other businesses that, if they want to (and maybe they do), they can simply operate their Apple Music service at a loss

So Apple has enough money coming in from other businesses that, if they want to (and maybe they do), they can simply operate their Apple Music service at a loss. Forever. Spotify can't do that so how do you combat against Apple, one of your biggest competitors? Burying in the search rankings and not being featured doesn't seem like a good way to handle it. If those artists are among people's favorites if they can't find them as easily on Spotify AND if they can get exclusives with Apple, why wouldn't they just jump ship to Apple Music? Obviously I don't understand all of the nuances of the music business so I could be completely off base here but it feels like, to me, this would have the opposite affect that they intend.

notJim 10y ago
Yeah I don't get this strategy either. It also seems like it would hurt Spotify's relationships with these artists, which doesn't help Spotify either.
bogomipz 10y ago
"So Apple has enough money coming in from other businesses that, if they want to (and maybe they do), they can simply operate their Apple Music service at a loss. Forever. Spotify can't do that ..." But Spotify can and is also operating at a loss. They are just doing it with VC money instead of their own. The numbers for 2015 were a loss of almost 200 million dollars!
- zaidf 10y ago
  ...they can simply operate their Apple Music service at a loss. Forever. The keyword is "forever" or at least for the next decade or two. It applies to Apple but not Spotify.
- aroman 10y ago
  That VC money is given to Spotify on the expectation that eventually Spotify will stop operating at a loss. Otherwise there is no reason to give them money at all. If and when that expectation no longer holds, the money will stop.
  - bogomipz 10y ago
    Sure, I understand that but its but its still able to operate at a loss for 10 years now.
  - x0x0 10y ago
    But what, exactly, does Spotify bring to the table that justifies more than a couple of percent operating fee? They don't own the content; they're just middlemen. The labels / rights holders can continually raise their prices to just below (or perhaps above, if VCs want to subsidize forever) Spotify's income. Spotify's app works at best ok (I'm on android). But even a good app plus recommendations probably gets you amazon-sized margins.
    - nicky0 10y ago
      Well I guess nobody would mind if Spotify goes bust then.
- electroly 10y ago
  Apple could lose $200 million every year for a thousand years and not run out of money. These are not remotely comparable situations.
- r00fus 10y ago
  Spotify still has incredible mindshare, but exit via acquisition seems more likely if VC monies can't be recouped by market dominance. Just imagine if Amazon or Microsoft bought Spotify... instant marketshare tied in with a larger ecosystem.
balabaster 10y ago
Plus, Apple has Parental Controls which despite the community railing against Spotify to get this implemented for the past 4 years(!!!), there's still no response. Shameful really considering so many people are complaining about it. ... and they tried to promote themselves as a family friendly company.
- ryanlol 10y ago
  Parental controls for music? This is an entirely new concept to me, why?
  - kalleboo 10y ago
    https://en.wikipedia.org/wiki/Parental_Advisory https://en.wikipedia.org/wiki/Parental_Advisory
    - ryanlol 10y ago
      How very American.
  - balabaster 10y ago
    Because you don't want your 8 year old streaking monologues full of "motherf this" "f* that" "n* what?" etc. etc. in front of Grandma - it's just not couth. While that's okay in private or whatever, you just don't want to promote that that kind of language is okay in civilized company - and you certainly don't want a radio station that you listen to at work to suddenly start cussing and swearing about life.
guelo 10y ago
Spotify has the biggest network advantage which gives them some power over the artists. They need to use that power now in order to fend off Apple or it's curtains for them.
benashford 10y ago
I'm no expert on the streaming industry either, but I'd guess it's because Spotify has much larger numbers of casual listeners (the free tier), which provides a long-tail for popular songs that aren't new enough for "exclusives". So it's essentially Spotify's way of saying "if you don't want our customers to listen to the album when it's new, don't rely on us for listeners when it's old". Although these claims are going to be essentially impossible to prove. Who's to say what should or shouldn't be in a playlist, for example?

notJim 10y ago

Yeah I don't get this strategy either. It also seems like it would hurt Spotify's relationships with these artists, which doesn't help Spotify either.

bogomipz 10y ago

"So Apple has enough money coming in from other businesses that, if they want to (and maybe they do), they can simply operate their Apple Music service at a loss. Forever. Spotify can't do that ..." But Spotify can and is also operating at a loss. They are just doing it with VC money instead of their own. The numbers for 2015 were a loss of almost 200 million dollars!

zaidf 10y ago
...they can simply operate their Apple Music service at a loss. Forever. The keyword is "forever" or at least for the next decade or two. It applies to Apple but not Spotify.
aroman 10y ago
That VC money is given to Spotify on the expectation that eventually Spotify will stop operating at a loss. Otherwise there is no reason to give them money at all. If and when that expectation no longer holds, the money will stop.
- bogomipz 10y ago
  Sure, I understand that but its but its still able to operate at a loss for 10 years now.
- x0x0 10y ago
  But what, exactly, does Spotify bring to the table that justifies more than a couple of percent operating fee? They don't own the content; they're just middlemen. The labels / rights holders can continually raise their prices to just below (or perhaps above, if VCs want to subsidize forever) Spotify's income. Spotify's app works at best ok (I'm on android). But even a good app plus recommendations probably gets you amazon-sized margins.
  - nicky0 10y ago
    Well I guess nobody would mind if Spotify goes bust then.
electroly 10y ago
Apple could lose $200 million every year for a thousand years and not run out of money. These are not remotely comparable situations.
r00fus 10y ago
Spotify still has incredible mindshare, but exit via acquisition seems more likely if VC monies can't be recouped by market dominance. Just imagine if Amazon or Microsoft bought Spotify... instant marketshare tied in with a larger ecosystem.

balabaster 10y ago

Plus, Apple has Parental Controls which despite the community railing against Spotify to get this implemented for the past 4 years(!!!), there's still no response. Shameful really considering so many people are complaining about it. ... and they tried to promote themselves as a family friendly company.

ryanlol 10y ago
Parental controls for music? This is an entirely new concept to me, why?
- kalleboo 10y ago
  https://en.wikipedia.org/wiki/Parental_Advisory https://en.wikipedia.org/wiki/Parental_Advisory
  - ryanlol 10y ago
    How very American.
- balabaster 10y ago
  Because you don't want your 8 year old streaking monologues full of "motherf this" "f* that" "n* what?" etc. etc. in front of Grandma - it's just not couth. While that's okay in private or whatever, you just don't want to promote that that kind of language is okay in civilized company - and you certainly don't want a radio station that you listen to at work to suddenly start cussing and swearing about life.

guelo 10y ago

Spotify has the biggest network advantage which gives them some power over the artists. They need to use that power now in order to fend off Apple or it's curtains for them.

benashford 10y ago

I'm no expert on the streaming industry either, but I'd guess it's because Spotify has much larger numbers of casual listeners (the free tier), which provides a long-tail for popular songs that aren't new enough for "exclusives". So it's essentially Spotify's way of saying "if you don't want our customers to listen to the album when it's new, don't rely on us for listeners when it's old". Although these claims are going to be essentially impossible to prove. Who's to say what should or shouldn't be in a playlist, for example?