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Spotify files for its IPO

411 points by rahulchhabra07 9y ago

chollida1 9y ago
Will be interesting as not many high profile companies try this back door way of listing. This seems much more like a forced IPO to get someone cashed out than the typical IPO to raise funds. One thing to remember if you are investing, is that there will almost certainly be no restrictions on selling stock, meaning that employee's, C-level execs and early investors won't have the typical lock up period. And since they aren't using an underwriter, there is no back stop for the shares sliding on the first day of trading. This doesn't do a whole lot to inspire confidence in the company, Look for the CEO to make an announcement that they will be holding their shares, or be prepared to buy into a company while the people on the inside are getting out of. As a user, I'm really excited for them, as an investor not so much. Hopefully they'll release some good news leading up to their IPO which could be as early as March.
- nyreed 9y ago
  There is a time pressure for them to IPO given the terms of some loans they took out in 2016. It seems the loan included penalties tied to how long it takes them to IPO. Apparently for every six months thereafter till the stock lists, the interest rate will keep going up by 1%. (http://www.sramanamitra.com/2017/03/08/2017-ipo-prospects-spotify-delays-again/ http://www.sramanamitra.com/2017/03/08/2017-ipo-prospects-sp...)
everdev 9y ago
Crazy timing with them just getting hit with a $1.6B lawsuit. https://www.reuters.com/article/us-spotify-lawsuit/spotify-hit-with-1-6-billion-copyright-lawsuit-idUSKBN1ER1RX https://www.reuters.com/article/us-spotify-lawsuit/spotify-h...
- samfriedman 9y ago
  I wonder if the lawsuit was purposefully timed near the IPO announcement, in an attempt to heap extra pressure on Spotify to settle quickly.
  - harryh 9y ago
    This is almost certainly the case.
  - CPLX 9y ago
    Yes, that's precisely how lawsuit strategy works.
    - samfriedman 9y ago
      I'd be curious to know how much of the strategy on the IPO side takes this kind of "out of the woodwork" stuff into account.
  - jvanderbot 9y ago
    I think that's spot on. They are holding the stock price for ransom.
  - deleted 9y ago
    [deleted]
- bluetwo 9y ago
  I can't really figure out what the merits of the case are, or get an idea who these folks are. Not a lot written about them, even though they have been around for some time. Has spotify really been playing these major artists without permission? Or is there more to the story? Not unusual to file for 10x what you think you might collect in the end. If there really are damages, will Spotify just give them 160 million in stock?
  - sova 9y ago
    I can't imagine someone wanting stock in a company they are suing for damages, but anything is possible
- finiteloop 9y ago
  People file lawsuits when companies have filed for IPO because generally that leads to companies being in a "quiet period" in which they cannot effectively respond publicly, which increases the likelihood of settlement, etc. It is also extremely common for competitors to seed the press with negative story lines, taking advantage of the legally mandated quiet period to remove the filing company's ability to counter these stories.
  - TallGuyShort 9y ago
    My employer just went through IPO. I was really disappointed how within days of the public confirmation of the S-1, competitors were lying very openly and publicly about things they knew we couldn't refute well because of the quiet period.
pricetag 9y ago
They announced that this was coming a while ago, but I’m curious- is there any financial advantage to them IPOing now with respect to the lawsuit? Like say if the lawsuit cleans them out, does being a publicly listed company vs a private one make for a different outcome? Looking to hear from someone who’d have some domain knowledge on this stuff. EDIT: Or possibly the other way around, does this allow them to finance the costs of the lawsuit?
- mathattack 9y ago
  Lawsuits come out when you file. Delaying filing would delay the lawsuit.
- zegerjan 9y ago
  Generally companies try to settle fast before the IPO so there are less concerns to invest. No domain knowledge btw, just seen it happen a couple of times before
  - unixhero 9y ago
    Hey, better than nothing! Thanks.
- rahulchhabra07 9y ago
  I think it's pretty common to have lawsuits against companies while they are filing for IPO's. Amazon, Facebook, Alibaba are some popular examples you might want to read about.
thisisit 9y ago
The lawsuit might make it difficult for them to IPO: https://www.inc.com/jeremy-quittner/lawsuits-can-sink-an-ipo.html https://www.inc.com/jeremy-quittner/lawsuits-can-sink-an-ipo...
- krutzger 9y ago
  Or maybe the lawsuit was timed to arrive just now and or extra pressure on Spotify?
JonFish85 9y ago
Isn't the point of an IPO generally to raise funds? In this case, it's just allowing people to sell their shares to the public, right? From the company standpoint, this is almost certainly a negative: additional oversight & reporting to do, no funds raised. I guess a positive is that shareholders can cash out, but as an investor, isn't that a giant red flag? I guess as an investor, I don't see why I'd buy Spotify shares from an existing shareholder -- my "investment" is not going to the company, it's a bit like buying shares on the market of a mature company, except Spotify isn't that -- it's a money-hole with a highly questionable future. Is there any reason for someone to buy existing shares to expect things to turn around? They aren't getting a capital infusion, it's business as usual except with the additional burden of being a public company.
- Eridrus 9y ago
  I don't see how this is a negative signaling issue. When you buy Apple Stock it's not from Apple. Spotify is going public largely due to terms they agreed to in previous funding rounds, but they are probably not raising money because they either don't need it or believe they can get better funding terms. If anything, this should be a signal that the company thinks the public stock is under-priced.
  - bogomipz 9y ago
    >"When you buy Apple Stock it's not from Apple." How are these two comparable? When Apple IPO'd back in 1980 you were buying stock from Apple. >"...but they are probably not raising money because they either don't need it or believe they can get better funding terms." They lose hundreds of millions of dollars year over year, why would they not need it? Also why would they believe that they can get better funding now when they resorted to selling debt with unfavorable term intheir last round of financing?
    - Eridrus 9y ago
      > They lose hundreds of millions of dollars year over year, why would they not need it? I have no comment on their actual business, just that I don't see them not selling shares as a negative signaling issue. People would make the same arguments regardless of whether they were selling stock or not.
sova 9y ago
Spotify has been doing one feature wrong for as long as I can recall: The Previous Track button will always navigate to the previous track in the list, no matter what you played before, and if there is nothing in the playlist before that track then the button effectively does nothing. Come on! PREV stands for Previous not List Index - 1. Other than that, Spotify works well enough that I do appreciate the service, even if it smells of monopoly.
- thesumofall 9y ago
  35% [1] is a good market share but certainly no monopoly. Also, some of the competitors are extremely powerful players that are able to put up a fight [1] https://musicindustryblog.wordpress.com/2017/11/03/announcing-midias-streaming-services-market-shares-report/ https://musicindustryblog.wordpress.com/2017/11/03/announcin...
  - sova 9y ago
    True, a monopoly would be far more exaggerated, but Spotify still holds the individual largest slice of the share pie according to this report. Their revenue almost 3 times that of any other music streaming service. 'Thanks for the helpful link! I'm surprised only 140 million people subscribe to streaming music.
- Shywim 9y ago
  Isn't that the standard behavior on every music player?
  - pkd 9y ago
    On all the music players I've used, that's not the case. Easy way to verify is to not shuffle and then try pressing previous.
  - e12e 9y ago
    Don't know, but not having a useful history of tracks is really annoying. Why I've landed on cloudplayer for Android - it allows you to go back to "that nice track three songs back when I was biking down a hill" (when shuffling a large, partially unknown selection).
aceofspad4s 9y ago
Spotify was better when it was EU-only. When they started to expand to the US they ruined it all. Fight me. ;P
- Flow 9y ago
  For someone who has never used Spotify, what changed?
  - aceofspad4s 9y ago
    A lot of music was removed. They added really bad limits, like a limit on how many hours you could listen every month. They forced you to create Facebook accounts to register, which means I had to create tons of Facebook accounts to overcome the hours/month limit. And some other things I don't remember.
    - vadansky 9y ago
      This isn't true. I use spotify and I don't even have facebook, and I don't have any limits
    - urda 9y ago
      > A lot of music was removed Citations please. > They added really bad limits, like a limit on how many hours you could listen every month. Just wrong. > They forced you to create Facebook accounts to register Also completely wrong. > which means I had to create tons of Facebook accounts to overcome the hours/month limit. This is also wrong because the previous two statements were also wrong. > And some other things I don't remember. And some things you flat out don't understand. Please avoid commenting on stories like this and spreading false information. It does no good.
      - aceofspad4s 9y ago
        They removed those limits years ago. But they were added just when they launched in the US. https://www.wired.com/2010/05/spotify-adds-us-friendly-service-plans/ https://www.wired.com/2010/05/spotify-adds-us-friendly-servi... "Meanwhile a new free version called Spotify Open allows Europeans who had not been invited to sign up for free accounts in the past to join without being invited – however, they can only stream up to 20 hours of free music per month, with advertisements." This is what the client looked like when you were out of hours: https://spotify.i.lithium.com/t5/image/serverpage/image-id/14858iDAB5DE670D7EEEA8?v=1.0 https://spotify.i.lithium.com/t5/image/serverpage/image-id/1... (notice the bar at the top right. dakika = hours I suppose. I can't find a better screenshot) Facebook required: https://www.cbsnews.com/news/facebook-login-required-for-spotify-account-heres-a-little-trick-for-you/ https://www.cbsnews.com/news/facebook-login-required-for-spo... "Unfortunately you will need a Facebook account to access Spotify from now on, unless you already have an account set up" So please just because you weren't there to see it don't say it's a lie Can't say much about music being removed. I don't remember what they removed and don't have any citations. But I remember it happening.
philfrasty 9y ago
Is there anything to expect from Spotify aside from music streaming? Anything that might differentiate them in the long run? Seems really hard to build a sustainable music-streaming business when all major competitors can simply subsidize this rather complementary part of their business (AZ, Apple, etc.).
- notyourwork 9y ago
  I agree, this seems like a cash out for a market leader who will decline over time. (For context, I am a paid subscriber and still don't see how spotify remains leader over time due to cost.)
- BinaryIdiot 9y ago
  At one point I thought they were positioning themselves to be THE premier, one stop shop for all listening, when they added podcast support and were planning on more. But it's been at least a year since they added Podcast support and it's frightfully bad. I tried to use it for a week and it was just so terrible and lacked all of the basic features of any other podcast app. I'm not convinced they can do anything else successfully to be honest. At least I'm not impressed with some of the newest stuff like podcasts.
SnowingXIV 9y ago
I hope they do get funding so they can support messaging again, one of the reasons I came back to Spotify was for one of my most beloved features. Sending tracks to friends within the application, but then found out it was removed. I still subscribe to Spotify, but the "copy link" send to friend via text is so much worse than being able to just message within.
- notyourwork 9y ago
  Can I ask for more context on why you feel there is friction to this route? It seems most mobile applications are moving towards a route where you can share in app content via other messaging mechanisms (sms, gchat, iMessage, etc.)
  - SnowingXIV 9y ago
    Sure, it was a great way to message a friend specifics songs or playlists(?) and you could hit play from the message itself in spotify and have a quick dialogue on it. Super enjoyable to scroll back in time and hit play in the messages and hear the songs we've been sending. Now when I get a text of the song being shared I have to wait until I get to a computer and then copy the link and send myself an email or something? Makes it way harder and often I just won't listen to the song that my friend or colleague sent me because it's too much friction. If I do, I end up searching for it manually and then what's the point even.
- bhj 9y ago
  Yes, I would like to see more social features that aren't tied to Facebook. I know it's not their core competency, but it's odd that the Friends feature requires FB even though they support "standard" non-FB user accounts. And a timeline-esque view of who's been listening to what at-a-glance would be neat.
  - jqbx_jason 9y ago
    Maybe this isn't exactly what you were thinking but I wanted to get some social listening features added to Spotify as well so I built JQBX: https://www.jqbx.fm https://www.jqbx.fm . Maybe it'll scratch your itch, figured I'd share.
_whm1 9y ago
I don't think this is a good long term investment. Disclaimer: I worked for a Spotify competitor in the past, so i have a pretty solid understanding of how the business works. I think it is a bad investment for one simple reason: Spotify purchases its main product (music) from a oligopoly. I'd estimate that 95%+ of the tracks streamed (by total playtime) are from one of the 3 major music labels: Universal, Sony or Warner. That includes sublabels that in some cases may have a seperate deal with Spotify, but at the end of the day are still part of the big 3. Imagine you are a Sony executive, walking by a news stand and the Wall Street Journal Headline is "Spotify Q2 earnings 30% up". What are you gonna do? You will squeeze them, make them pay, just enough that they survive. And Spotify has zero negotiation power here. If Sptify fails to have a deal with any 1 of these 3 labels, they become useless overnight. People will switch to Apple Music, Amazon PrimeMusic, Tidal or any other service quickly. It doesn't matter if Spotifys app is slighty better than the competitors software if they lack 1/3 of the music.
- Exuma 9y ago
  So how do their competitors deal with this?
  - askafriend 9y ago
    They don't. Apple, Google, and Amazon can afford to lose money all day long on the music streaming services that they each offer. This is because the services bolster their broader ecosystem of services and products whose aggregate value is far greater than any individual piece on it's own. That's why Spotify is in a precarious position because streaming is it's only bread and butter. Similar to UberEats + Uber versus a standalone service like DoorDash or Postmates. Uber doesn't need to make money on UberEats in order to be a successful business. Postmates does and that's a huge problem because delivery is a brutal business.
    - cutcss 9y ago
      Exactly, the only realistic option Spotify has is to be bought by one of the big 3 (an exit), not an IPO.
blondie9x 9y ago
Wow way to try to maximize how much you can dump employee options and stock into an IPO before the lawsuit and others like it materialize. This is nuts. Lawsuit yesterday start of IPO process today.
- rrdharan 9y ago
  As others have pointed out, it's much more likely that the folks filing the lawsuit chose the timing of their filing to coincide with the predicted IPO to maximize PR exposure and increase the pressure for a quick settlement.
oh_sigh 9y ago
How will this IPO fare for, say, software developers who worked there for 5 or 6 years? I had an offer on the table from them in 2011 but decided to go with Amazon instead. I'm always curious how the road not taken would have turned out.
- rohansingh 9y ago
  As an engineer who accepted an offer from Spotify in 2011, worked there until last year, and am still holding on to a good portion of my grant... it's mixed. From both my experience and that of folks I've spoken with, the last year or two has been quite good for us. That said, you're probably much better off financially if you accepted an offer from a FAANG-type company around the same time and stuck with them.
kinkrtyavimoodh 9y ago
Anyone feel worried about an environment where your competitor products are basically all propped up by big companies who couldn't care less whether they made money as long as they fly low of the anti-competitive radar? Of course your lemonade stand can sell lemonade for a cent a cup if your rich daddy will pay the other 99 cent from his pocket. For eg. Spotify had to lower their price from $10 per month to $15 per month for 6 (family plan) because Google Play Music offered that price point along with YouTube Red. Of course, neither Google nor Apple need to make money from their music services. Funnily or sadly enough this is true for almost everything Google does other than Ads. Most people would agree that Spotify is a better music player while each of Google's music apps are bad in different ways, but online subscription services are a market where people want to nickel and dime.
- on_and_off 9y ago
  Disclaimer : I worked for one of Spotify and Google competitors. >Most people would agree that Spotify is a better music player while each of Google's music apps are bad in different ways I am not so sure about that. Spotify is on top of its game : adjusting the loudness of tracks, using ogg, .. I am however pretty sure that to almost all the users, it makes no difference. Furthermore, it is very hard to differentiate as a music service. Most of the features are present in all the services (albums, playlists, AI generated recommandations, radios, podcasts, etc) . Regarding the price, it is up to Spotify to start creating its own content in order to make it go down. Right now the real issue IMO is that the majors are dictating an extremely high monthly price for the service.
  - rzanella 9y ago
    Spotify's radio is a 10-song loop, another service w/ better radio and same price would definitely steal some users.
    - gizmo385 9y ago
      Pandora?
lerie82 9y ago
I'm not a business major but releasing their IPO while being sued for billions sounds like a bad idea. Someone please explain this to me.
- mickronome 9y ago
  My very non-qualified thoughts about this, I'm definitely out of my depth here, but it's kind of fun to think about these things :) Not releasing it as planned could very well be worse. It could easily be seen as an implicit acknowledgment that the plaintiff has legal standing, and that their claims have merit. This could then lead to a situation where an IPO would have to be delayed, potentially for years until it all has been played out in court. I'm quite sure most potential investors will assume that this particular suit is likely to be timed based on rumors of the IPO to interfere maximally with it. Maybe in the hope of either a quick settlement or to effectively create an out-of-court punishment via lowered IPO valuation to deterr others from trying to manuever the legal terrain in a similar way as Spotify is claimed to do. Whether the plaintiff has standing or not. Going forward without deviating from schedule, or even quicker than schedule, sends what is probably the strongest possible message that could be sent to bolster the IPO and minimise value loss. It says: "We're not afraid of this suit" Risk estimates in preparation for an IPO regarding a company like Spotify almost certainly includes assesment of risks by various actors that might want a piece of the cake through legal action.
coverband 9y ago
Any estimates on the market valuation? Not mentioned anywhere in this article, and the $20B number floating around sounds quite high to me. For comparison, Vivendi/Universal is at $35B (based on its share price) with 20K+ employees in multiple divisions vs. Spotify in just the music streaming business with 1600 employees.
sdnguyen90 9y ago
Record labels are already in a dynamic where the streaming services have at least equal leverage. Playlists are already taking over radio which is where the labels would give you the most value. More artists are publishing their music independently. I think the negotiation power of older records owned by record labels will diminish because the next generation of independently owned records will outweigh them. The thing I'm unsure of is how Apple Music vs Spotify is going to play out. I feel that Spotify is currently an overall better product but Apple has had major cultural impact with its curation which IMO is more valuable than building software.
partycoder 9y ago
Hot potato.

Will be interesting as not many high profile companies try this back door way of listing. This seems much more like a forced IPO to get someone cashed out than the typical IPO to raise funds. One thing to remember if you are investing, is that there will almost certainly be no restrictions on selling stock, meaning that employee's, C-level execs and early investors won't have the typical lock up period. And since they aren't using an underwriter, there is no back stop for the shares sliding on the first day of trading. This doesn't do a whole lot to inspire confidence in the company, Look for the CEO to make an announcement that they will be holding their shares, or be prepared to buy into a company while the people on the inside are getting out of. As a user, I'm really excited for them, as an investor not so much. Hopefully they'll release some good news leading up to their IPO which could be as early as March.

nyreed 9y ago
There is a time pressure for them to IPO given the terms of some loans they took out in 2016. It seems the loan included penalties tied to how long it takes them to IPO. Apparently for every six months thereafter till the stock lists, the interest rate will keep going up by 1%. (http://www.sramanamitra.com/2017/03/08/2017-ipo-prospects-spotify-delays-again/ http://www.sramanamitra.com/2017/03/08/2017-ipo-prospects-sp...)

everdev 9y ago

Crazy timing with them just getting hit with a $1.6B lawsuit. https://www.reuters.com/article/us-spotify-lawsuit/spotify-hit-with-1-6-billion-copyright-lawsuit-idUSKBN1ER1RX https://www.reuters.com/article/us-spotify-lawsuit/spotify-h...

samfriedman 9y ago
I wonder if the lawsuit was purposefully timed near the IPO announcement, in an attempt to heap extra pressure on Spotify to settle quickly.
- harryh 9y ago
  This is almost certainly the case.
- CPLX 9y ago
  Yes, that's precisely how lawsuit strategy works.
  - samfriedman 9y ago
    I'd be curious to know how much of the strategy on the IPO side takes this kind of "out of the woodwork" stuff into account.
- jvanderbot 9y ago
  I think that's spot on. They are holding the stock price for ransom.
- deleted 9y ago
  [deleted]
bluetwo 9y ago
I can't really figure out what the merits of the case are, or get an idea who these folks are. Not a lot written about them, even though they have been around for some time. Has spotify really been playing these major artists without permission? Or is there more to the story? Not unusual to file for 10x what you think you might collect in the end. If there really are damages, will Spotify just give them 160 million in stock?
- sova 9y ago
  I can't imagine someone wanting stock in a company they are suing for damages, but anything is possible
finiteloop 9y ago
People file lawsuits when companies have filed for IPO because generally that leads to companies being in a "quiet period" in which they cannot effectively respond publicly, which increases the likelihood of settlement, etc. It is also extremely common for competitors to seed the press with negative story lines, taking advantage of the legally mandated quiet period to remove the filing company's ability to counter these stories.
- TallGuyShort 9y ago
  My employer just went through IPO. I was really disappointed how within days of the public confirmation of the S-1, competitors were lying very openly and publicly about things they knew we couldn't refute well because of the quiet period.

pricetag 9y ago

They announced that this was coming a while ago, but I’m curious- is there any financial advantage to them IPOing now with respect to the lawsuit? Like say if the lawsuit cleans them out, does being a publicly listed company vs a private one make for a different outcome? Looking to hear from someone who’d have some domain knowledge on this stuff. EDIT: Or possibly the other way around, does this allow them to finance the costs of the lawsuit?

mathattack 9y ago
Lawsuits come out when you file. Delaying filing would delay the lawsuit.
zegerjan 9y ago
Generally companies try to settle fast before the IPO so there are less concerns to invest. No domain knowledge btw, just seen it happen a couple of times before
- unixhero 9y ago
  Hey, better than nothing! Thanks.
rahulchhabra07 9y ago
I think it's pretty common to have lawsuits against companies while they are filing for IPO's. Amazon, Facebook, Alibaba are some popular examples you might want to read about.

thisisit 9y ago

The lawsuit might make it difficult for them to IPO: https://www.inc.com/jeremy-quittner/lawsuits-can-sink-an-ipo.html https://www.inc.com/jeremy-quittner/lawsuits-can-sink-an-ipo...

krutzger 9y ago
Or maybe the lawsuit was timed to arrive just now and or extra pressure on Spotify?

JonFish85 9y ago

Isn't the point of an IPO generally to raise funds? In this case, it's just allowing people to sell their shares to the public, right? From the company standpoint, this is almost certainly a negative: additional oversight & reporting to do, no funds raised. I guess a positive is that shareholders can cash out, but as an investor, isn't that a giant red flag? I guess as an investor, I don't see why I'd buy Spotify shares from an existing shareholder -- my "investment" is not going to the company, it's a bit like buying shares on the market of a mature company, except Spotify isn't that -- it's a money-hole with a highly questionable future. Is there any reason for someone to buy existing shares to expect things to turn around? They aren't getting a capital infusion, it's business as usual except with the additional burden of being a public company.

Eridrus 9y ago
I don't see how this is a negative signaling issue. When you buy Apple Stock it's not from Apple. Spotify is going public largely due to terms they agreed to in previous funding rounds, but they are probably not raising money because they either don't need it or believe they can get better funding terms. If anything, this should be a signal that the company thinks the public stock is under-priced.
- bogomipz 9y ago
  >"When you buy Apple Stock it's not from Apple." How are these two comparable? When Apple IPO'd back in 1980 you were buying stock from Apple. >"...but they are probably not raising money because they either don't need it or believe they can get better funding terms." They lose hundreds of millions of dollars year over year, why would they not need it? Also why would they believe that they can get better funding now when they resorted to selling debt with unfavorable term intheir last round of financing?
  - Eridrus 9y ago
    > They lose hundreds of millions of dollars year over year, why would they not need it? I have no comment on their actual business, just that I don't see them not selling shares as a negative signaling issue. People would make the same arguments regardless of whether they were selling stock or not.

sova 9y ago

Spotify has been doing one feature wrong for as long as I can recall: The Previous Track button will always navigate to the previous track in the list, no matter what you played before, and if there is nothing in the playlist before that track then the button effectively does nothing. Come on! PREV stands for Previous not List Index - 1. Other than that, Spotify works well enough that I do appreciate the service, even if it smells of monopoly.

thesumofall 9y ago
35% [1] is a good market share but certainly no monopoly. Also, some of the competitors are extremely powerful players that are able to put up a fight [1] https://musicindustryblog.wordpress.com/2017/11/03/announcing-midias-streaming-services-market-shares-report/ https://musicindustryblog.wordpress.com/2017/11/03/announcin...
- sova 9y ago
  True, a monopoly would be far more exaggerated, but Spotify still holds the individual largest slice of the share pie according to this report. Their revenue almost 3 times that of any other music streaming service. 'Thanks for the helpful link! I'm surprised only 140 million people subscribe to streaming music.
Shywim 9y ago
Isn't that the standard behavior on every music player?
- pkd 9y ago
  On all the music players I've used, that's not the case. Easy way to verify is to not shuffle and then try pressing previous.
- e12e 9y ago
  Don't know, but not having a useful history of tracks is really annoying. Why I've landed on cloudplayer for Android - it allows you to go back to "that nice track three songs back when I was biking down a hill" (when shuffling a large, partially unknown selection).

aceofspad4s 9y ago

Spotify was better when it was EU-only. When they started to expand to the US they ruined it all. Fight me. ;P

Flow 9y ago
For someone who has never used Spotify, what changed?
- aceofspad4s 9y ago
  A lot of music was removed. They added really bad limits, like a limit on how many hours you could listen every month. They forced you to create Facebook accounts to register, which means I had to create tons of Facebook accounts to overcome the hours/month limit. And some other things I don't remember.
  - vadansky 9y ago
    This isn't true. I use spotify and I don't even have facebook, and I don't have any limits
  - urda 9y ago
    > A lot of music was removed Citations please. > They added really bad limits, like a limit on how many hours you could listen every month. Just wrong. > They forced you to create Facebook accounts to register Also completely wrong. > which means I had to create tons of Facebook accounts to overcome the hours/month limit. This is also wrong because the previous two statements were also wrong. > And some other things I don't remember. And some things you flat out don't understand. Please avoid commenting on stories like this and spreading false information. It does no good.
    - aceofspad4s 9y ago
      They removed those limits years ago. But they were added just when they launched in the US. https://www.wired.com/2010/05/spotify-adds-us-friendly-service-plans/ https://www.wired.com/2010/05/spotify-adds-us-friendly-servi... "Meanwhile a new free version called Spotify Open allows Europeans who had not been invited to sign up for free accounts in the past to join without being invited – however, they can only stream up to 20 hours of free music per month, with advertisements." This is what the client looked like when you were out of hours: https://spotify.i.lithium.com/t5/image/serverpage/image-id/14858iDAB5DE670D7EEEA8?v=1.0 https://spotify.i.lithium.com/t5/image/serverpage/image-id/1... (notice the bar at the top right. dakika = hours I suppose. I can't find a better screenshot) Facebook required: https://www.cbsnews.com/news/facebook-login-required-for-spotify-account-heres-a-little-trick-for-you/ https://www.cbsnews.com/news/facebook-login-required-for-spo... "Unfortunately you will need a Facebook account to access Spotify from now on, unless you already have an account set up" So please just because you weren't there to see it don't say it's a lie Can't say much about music being removed. I don't remember what they removed and don't have any citations. But I remember it happening.

philfrasty 9y ago

Is there anything to expect from Spotify aside from music streaming? Anything that might differentiate them in the long run? Seems really hard to build a sustainable music-streaming business when all major competitors can simply subsidize this rather complementary part of their business (AZ, Apple, etc.).

notyourwork 9y ago
I agree, this seems like a cash out for a market leader who will decline over time. (For context, I am a paid subscriber and still don't see how spotify remains leader over time due to cost.)
BinaryIdiot 9y ago
At one point I thought they were positioning themselves to be THE premier, one stop shop for all listening, when they added podcast support and were planning on more. But it's been at least a year since they added Podcast support and it's frightfully bad. I tried to use it for a week and it was just so terrible and lacked all of the basic features of any other podcast app. I'm not convinced they can do anything else successfully to be honest. At least I'm not impressed with some of the newest stuff like podcasts.

SnowingXIV 9y ago

I hope they do get funding so they can support messaging again, one of the reasons I came back to Spotify was for one of my most beloved features. Sending tracks to friends within the application, but then found out it was removed. I still subscribe to Spotify, but the "copy link" send to friend via text is so much worse than being able to just message within.

notyourwork 9y ago
Can I ask for more context on why you feel there is friction to this route? It seems most mobile applications are moving towards a route where you can share in app content via other messaging mechanisms (sms, gchat, iMessage, etc.)
- SnowingXIV 9y ago
  Sure, it was a great way to message a friend specifics songs or playlists(?) and you could hit play from the message itself in spotify and have a quick dialogue on it. Super enjoyable to scroll back in time and hit play in the messages and hear the songs we've been sending. Now when I get a text of the song being shared I have to wait until I get to a computer and then copy the link and send myself an email or something? Makes it way harder and often I just won't listen to the song that my friend or colleague sent me because it's too much friction. If I do, I end up searching for it manually and then what's the point even.
bhj 9y ago
Yes, I would like to see more social features that aren't tied to Facebook. I know it's not their core competency, but it's odd that the Friends feature requires FB even though they support "standard" non-FB user accounts. And a timeline-esque view of who's been listening to what at-a-glance would be neat.
- jqbx_jason 9y ago
  Maybe this isn't exactly what you were thinking but I wanted to get some social listening features added to Spotify as well so I built JQBX: https://www.jqbx.fm https://www.jqbx.fm . Maybe it'll scratch your itch, figured I'd share.

_whm1 9y ago

I don't think this is a good long term investment. Disclaimer: I worked for a Spotify competitor in the past, so i have a pretty solid understanding of how the business works. I think it is a bad investment for one simple reason: Spotify purchases its main product (music) from a oligopoly. I'd estimate that 95%+ of the tracks streamed (by total playtime) are from one of the 3 major music labels: Universal, Sony or Warner. That includes sublabels that in some cases may have a seperate deal with Spotify, but at the end of the day are still part of the big 3. Imagine you are a Sony executive, walking by a news stand and the Wall Street Journal Headline is "Spotify Q2 earnings 30% up". What are you gonna do? You will squeeze them, make them pay, just enough that they survive. And Spotify has zero negotiation power here. If Sptify fails to have a deal with any 1 of these 3 labels, they become useless overnight. People will switch to Apple Music, Amazon PrimeMusic, Tidal or any other service quickly. It doesn't matter if Spotifys app is slighty better than the competitors software if they lack 1/3 of the music.

Exuma 9y ago
So how do their competitors deal with this?
- askafriend 9y ago
  They don't. Apple, Google, and Amazon can afford to lose money all day long on the music streaming services that they each offer. This is because the services bolster their broader ecosystem of services and products whose aggregate value is far greater than any individual piece on it's own. That's why Spotify is in a precarious position because streaming is it's only bread and butter. Similar to UberEats + Uber versus a standalone service like DoorDash or Postmates. Uber doesn't need to make money on UberEats in order to be a successful business. Postmates does and that's a huge problem because delivery is a brutal business.
  - cutcss 9y ago
    Exactly, the only realistic option Spotify has is to be bought by one of the big 3 (an exit), not an IPO.

blondie9x 9y ago

Wow way to try to maximize how much you can dump employee options and stock into an IPO before the lawsuit and others like it materialize. This is nuts. Lawsuit yesterday start of IPO process today.

rrdharan 9y ago
As others have pointed out, it's much more likely that the folks filing the lawsuit chose the timing of their filing to coincide with the predicted IPO to maximize PR exposure and increase the pressure for a quick settlement.

oh_sigh 9y ago

How will this IPO fare for, say, software developers who worked there for 5 or 6 years? I had an offer on the table from them in 2011 but decided to go with Amazon instead. I'm always curious how the road not taken would have turned out.

rohansingh 9y ago
As an engineer who accepted an offer from Spotify in 2011, worked there until last year, and am still holding on to a good portion of my grant... it's mixed. From both my experience and that of folks I've spoken with, the last year or two has been quite good for us. That said, you're probably much better off financially if you accepted an offer from a FAANG-type company around the same time and stuck with them.

kinkrtyavimoodh 9y ago

Anyone feel worried about an environment where your competitor products are basically all propped up by big companies who couldn't care less whether they made money as long as they fly low of the anti-competitive radar? Of course your lemonade stand can sell lemonade for a cent a cup if your rich daddy will pay the other 99 cent from his pocket. For eg. Spotify had to lower their price from $10 per month to $15 per month for 6 (family plan) because Google Play Music offered that price point along with YouTube Red. Of course, neither Google nor Apple need to make money from their music services. Funnily or sadly enough this is true for almost everything Google does other than Ads. Most people would agree that Spotify is a better music player while each of Google's music apps are bad in different ways, but online subscription services are a market where people want to nickel and dime.

on_and_off 9y ago
Disclaimer : I worked for one of Spotify and Google competitors. >Most people would agree that Spotify is a better music player while each of Google's music apps are bad in different ways I am not so sure about that. Spotify is on top of its game : adjusting the loudness of tracks, using ogg, .. I am however pretty sure that to almost all the users, it makes no difference. Furthermore, it is very hard to differentiate as a music service. Most of the features are present in all the services (albums, playlists, AI generated recommandations, radios, podcasts, etc) . Regarding the price, it is up to Spotify to start creating its own content in order to make it go down. Right now the real issue IMO is that the majors are dictating an extremely high monthly price for the service.
- rzanella 9y ago
  Spotify's radio is a 10-song loop, another service w/ better radio and same price would definitely steal some users.
  - gizmo385 9y ago
    Pandora?

lerie82 9y ago

I'm not a business major but releasing their IPO while being sued for billions sounds like a bad idea. Someone please explain this to me.

mickronome 9y ago
My very non-qualified thoughts about this, I'm definitely out of my depth here, but it's kind of fun to think about these things :) Not releasing it as planned could very well be worse. It could easily be seen as an implicit acknowledgment that the plaintiff has legal standing, and that their claims have merit. This could then lead to a situation where an IPO would have to be delayed, potentially for years until it all has been played out in court. I'm quite sure most potential investors will assume that this particular suit is likely to be timed based on rumors of the IPO to interfere maximally with it. Maybe in the hope of either a quick settlement or to effectively create an out-of-court punishment via lowered IPO valuation to deterr others from trying to manuever the legal terrain in a similar way as Spotify is claimed to do. Whether the plaintiff has standing or not. Going forward without deviating from schedule, or even quicker than schedule, sends what is probably the strongest possible message that could be sent to bolster the IPO and minimise value loss. It says: "We're not afraid of this suit" Risk estimates in preparation for an IPO regarding a company like Spotify almost certainly includes assesment of risks by various actors that might want a piece of the cake through legal action.

coverband 9y ago

Any estimates on the market valuation? Not mentioned anywhere in this article, and the $20B number floating around sounds quite high to me. For comparison, Vivendi/Universal is at $35B (based on its share price) with 20K+ employees in multiple divisions vs. Spotify in just the music streaming business with 1600 employees.

sdnguyen90 9y ago

Record labels are already in a dynamic where the streaming services have at least equal leverage. Playlists are already taking over radio which is where the labels would give you the most value. More artists are publishing their music independently. I think the negotiation power of older records owned by record labels will diminish because the next generation of independently owned records will outweigh them. The thing I'm unsure of is how Apple Music vs Spotify is going to play out. I feel that Spotify is currently an overall better product but Apple has had major cultural impact with its curation which IMO is more valuable than building software.

partycoder 9y ago

Hot potato.