4 ms·

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!

nerdponx 10y ago
Maybe now they can start building basic quality of life features like offline Last.FM scrobbling that have been in demand for 4+ years!
- bpicolo 10y ago
  They already have offline for anybody with premium. It's a slider on any playlist to download it to disk. Though I may misunderstand what you're asking for, as I don't quite get the Last.FM comment.
  - gaadd33 10y ago
    He's asking to have offline plays saved and submitted to Last.FM when you go back online vs attempting to send them to Last.FM even when offline
- dominotw 10y ago
  I imagine, they want people to do all their music listening on spotify, implementing scrobbling would seem counter to that goal.
  - ablation 10y ago
    They've already implemented scrobbling, I think the previous poster was asking for offline plays to be scrobbled too.
    - dominotw 10y ago
      Oh I didn't know that. thanks.
- bouk 10y ago
  I doubt a significant number of people use that feature to make it worth for them to spend time implementing it
- rco8786 10y ago
  I use offline all the time?
jasode 10y ago
>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 unfavorable licensing terms[2] to the record labels (58% payment) are preventing Spotify from turning a profit. (Keep in mind that so far, Spotify has never turned a profit.) They also took on $1 billion in new debt with exploding terms[3] which pressures them towards an IPO. A bad timing of the IPO wouldn't help them at all. I don't see how the financial numbers work in favor of Spotify. It looks like the only companies that can afford to stream music would be Amazon/Apple/Google. Digital music streaming is a brutal business and all 3 major streaming companies Spotify/Pandora/Rhapsody have been losing money for years.[4] It's now 2016 and nobody has found a way to make profits. Their subscriber growth numbers keep making the headlines so people mistakenly assume those companies are financially successful when they're not. [1]http://www.statista.com/statistics/244990/spotifys-revenue-and-net-income/ http://www.statista.com/statistics/244990/spotifys-revenue-a... [2]http://www.musicbusinessworldwide.com/spotify-contract-three-major-labels-wants-pay-less/ http://www.musicbusinessworldwide.com/spotify-contract-three... [3]http://www.fool.com/investing/2016/06/17/will-spotify-have-an-ipo-in-2016.aspx http://www.fool.com/investing/2016/06/17/will-spotify-have-a... [4]http://www.digitalmusicnews.com/2014/02/18/profitless/ http://www.digitalmusicnews.com/2014/02/18/profitless/
- k-mcgrady 10y ago
  >> "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.
  - jasode 10y ago
    >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).
odabaxok 10y ago
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.
- matthewking 10y ago
  Where is that? EU wide? In the UK its £9.99 which I've always found too expensive compared to services like Netflix, NowTV, Amazon Video etc. Personally I feel the price point should be around £5 or less, otherwise I can buy an album every other month on iTunes and own it forever, so for me at least this price point doesn't work.
  - odabaxok 10y ago
    It is in Czech Republic, but I see now, that you can change the country in the footer and you will see different pricing.
    - k-mcgrady 10y ago
      Yeah Spotify pricing varies pretty drastically from country to country.
- boodm 10y ago
  $4.99 for US students: https://www.spotify.com/us/student/ https://www.spotify.com/us/student/
ci5er 10y ago
COGS is going to be ~60% of revenue. That's the royalties. Gross Margin = Gross Revenue - COGS. We're down to under $160M. Spotify has (or had) 1600+ employees. If these were US (CA) based, we'd estimate higher, but since Europeans are relatively "cheaper", let's call it $75K/employee all-in (taxes, benefits, etc.). That's probably light, and doesn't take into account rent or data centers or any expenses, and that costs them ~$120M. That leaves $40M for "everything else". Assuming that their employees are indeed "as cheap" on average as guesstimated above. Conclusion: they are surely losing money.

nerdponx 10y ago

Maybe now they can start building basic quality of life features like offline Last.FM scrobbling that have been in demand for 4+ years!

bpicolo 10y ago
They already have offline for anybody with premium. It's a slider on any playlist to download it to disk. Though I may misunderstand what you're asking for, as I don't quite get the Last.FM comment.
- gaadd33 10y ago
  He's asking to have offline plays saved and submitted to Last.FM when you go back online vs attempting to send them to Last.FM even when offline
dominotw 10y ago
I imagine, they want people to do all their music listening on spotify, implementing scrobbling would seem counter to that goal.
- ablation 10y ago
  They've already implemented scrobbling, I think the previous poster was asking for offline plays to be scrobbled too.
  - dominotw 10y ago
    Oh I didn't know that. thanks.
bouk 10y ago
I doubt a significant number of people use that feature to make it worth for them to spend time implementing it
rco8786 10y ago
I use offline all the time?

jasode 10y ago

>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 unfavorable licensing terms[2] to the record labels (58% payment) are preventing Spotify from turning a profit. (Keep in mind that so far, Spotify has never turned a profit.) They also took on $1 billion in new debt with exploding terms[3] which pressures them towards an IPO. A bad timing of the IPO wouldn't help them at all. I don't see how the financial numbers work in favor of Spotify. It looks like the only companies that can afford to stream music would be Amazon/Apple/Google. Digital music streaming is a brutal business and all 3 major streaming companies Spotify/Pandora/Rhapsody have been losing money for years.[4] It's now 2016 and nobody has found a way to make profits. Their subscriber growth numbers keep making the headlines so people mistakenly assume those companies are financially successful when they're not. [1]http://www.statista.com/statistics/244990/spotifys-revenue-and-net-income/ http://www.statista.com/statistics/244990/spotifys-revenue-a... [2]http://www.musicbusinessworldwide.com/spotify-contract-three-major-labels-wants-pay-less/ http://www.musicbusinessworldwide.com/spotify-contract-three... [3]http://www.fool.com/investing/2016/06/17/will-spotify-have-an-ipo-in-2016.aspx http://www.fool.com/investing/2016/06/17/will-spotify-have-a... [4]http://www.digitalmusicnews.com/2014/02/18/profitless/ http://www.digitalmusicnews.com/2014/02/18/profitless/

k-mcgrady 10y ago
>> "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.
- jasode 10y ago
  >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).

odabaxok 10y ago

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.

matthewking 10y ago
Where is that? EU wide? In the UK its £9.99 which I've always found too expensive compared to services like Netflix, NowTV, Amazon Video etc. Personally I feel the price point should be around £5 or less, otherwise I can buy an album every other month on iTunes and own it forever, so for me at least this price point doesn't work.
- odabaxok 10y ago
  It is in Czech Republic, but I see now, that you can change the country in the footer and you will see different pricing.
  - k-mcgrady 10y ago
    Yeah Spotify pricing varies pretty drastically from country to country.
boodm 10y ago
$4.99 for US students: https://www.spotify.com/us/student/ https://www.spotify.com/us/student/

ci5er 10y ago

COGS is going to be ~60% of revenue. That's the royalties. Gross Margin = Gross Revenue - COGS. We're down to under $160M. Spotify has (or had) 1600+ employees. If these were US (CA) based, we'd estimate higher, but since Europeans are relatively "cheaper", let's call it $75K/employee all-in (taxes, benefits, etc.). That's probably light, and doesn't take into account rent or data centers or any expenses, and that costs them ~$120M. That leaves $40M for "everything else". Assuming that their employees are indeed "as cheap" on average as guesstimated above. Conclusion: they are surely losing money.