6 ms·

I just don't see how this can be a successful company long term. If the labels see any profit they will demand more fees at the next deal negotiation. To become

by guelo 9y ago

I just don't see how this can be a successful company long term. If the labels see any profit they will demand more fees at the next deal negotiation. To become music's Netflix they would have to produce their own music which people want to listen to, which is a lot easier said then done. The easiest route is probably to become Tidal and give the company away to a few big artists in exchange for exclusives.

harshgupta 9y ago
Thats fair, but accessing free music is a lot easier than free tv. If they can get people to pay anything for music, thats at least better than zero for labels.
- komali2 9y ago
  I think the music industry still isn't quite sure what to do about pirating. Seems their solution is "send spec-op soldiers to kick down doors of people in other countries" still.
gkoberger 9y ago
More than likely it won't come to this. Most musicians want their music everywhere, and give it away for (almost) free. Spotify/radio/etc are the marketing, and concerts/festivals/movie licensing/etc are the product. Unlike movies, there's insane repeatability of music, meaning it can be everywhere. I wouldn't be surprised, though, if less-popular tracks for artists moved to another service. You want to hear The Chainsmoker's radio singles? Play them non-stop on Spotify! But if you're a huge fan and want to hear back tracks, demos, etc, you can pay them $10/mo on a Patreon-like site. Basically, charging more for a closer relationship to studios you like, while their more popular music is released for free.
paxy 9y ago
The equivalent would be to start their own label and sign artists. It's hard, sure, but not impossible. They have the same advantage Netflix did - an intimate knowledge of people's musical tastes and habits. Plus they have already shown willingness to diversify into other areas - merch, concerts, original shows, videos etc.
- TremendousJudge 9y ago
  The thing is, Netflix now is very different from Netflix 5 years ago -- most of the content is the one they produce. Music doesn't work this way, many people just want to listen to old music while it's rare for people to rewatch old shows and movies. There are many albums I have listened to tens of times, and I don't think I have ever watched a film more than three or four times. If the labels pull the artists to make their own Spotifies, Spotify will be left with pretty much nothing, in a situation much worse than Netflix
jetti 9y ago
>To become the music's Netflix they would have to produce their own music which people want to listen to, which is a lot easier said then done. What Spotify has going for it is that indie artists can easily (or at least relatively easily) put their music up on Spotify, which bypasses the record labels. Now, not all of that music is going to be good but that is a way they are already bypassing record labels.
atwebb 9y ago
They could look at purchasing Bandcamp, which has done a great job of promoting and selling independent music.
- rainbowmverse 9y ago
  Bandcamp lets me download lists of people who've bought my music and of people who follow my profile. This is because they understand the business is mine, and they're simply a service provider for that business. Even their subscription system runs right through the musician's own Stripe account, so you can always take your subscriptions elsewhere. I don't have any reason to trust that a VC-fueled monster like Spotify understands this. If Spotify bought Bandcamp, I would remove my music from it. VC-fueled behemoths like to make people dependent on them. I can't trust my business to a company that gets most of its money from outside investors instead of the people who use the service. Their incentives are fundamentally misaligned with my interests.
  - chime 9y ago
    Apologies if I come across as harsh but as a consumer, I would prefer my consumption activities to remain as private as possible. In light of FB news, I don't think even some Options > Privacy Settings on Bandcamp would be sufficient since most people wouldn't do it. I hope Bandcamp is opt-in for this info.
    - rainbowmverse 9y ago
      It is opt-in if you pay for it, but almost no one leaves it unchecked. There's also the option to not require an email for free downloads. Often these are people I've sent from somewhere else, and we talk regularly. It's not like with Facebook where it's a faceless corporation unless you're spending enough on ads to get an account specialist. They generally knew me before they gave me money. I'm not collecting any data on them other than the email. I don't even run analytics on web pages I control. I wouldn't even know what to do with it that would tell me anything I don't already know, or that I couldn't get by just asking.
    - 9y ago
reaperducer 9y ago
>To become music's Netflix they would have to produce their own music which people want to listen to Didn't Starbucks try something like that? I think it was called Hear Music.
isostatic 9y ago
Or purchase some existing labels. Warner, which is about 20% of the global market, was worth $3.3b -- 11% of spotify -- in 2011 [1] If I read that correctly, it implies the bulk of the recording industry is worth less than Spotify. 1. https://www.reuters.com/article/us-warnermusic/blavatniks-access-wins-warner-music-for-3-3-billion-idUSTRE74407920110506 https://www.reuters.com/article/us-warnermusic/blavatniks-ac...
- paulie_a 9y ago
  People tend to overestimate the size of the music and movie industries, apple and google could buy them outright with change from their couch cushions.
  - isostatic 9y ago
    What that says about Spotify's valuation is another thing
    - Skunkleton 9y ago
      This is something that has been bothering me. Doesn't it seem like stock prices are getting out of whack?
      - matthewbauer 9y ago
        Yes although this mostly just applies to consumer tech companies.
      - ianai 9y ago
        Nearly all companies I’ve researched on the exchanges have historical highs going back a couple years. This is across multiple industries (tech, utilities, real estate, grocers). It’s a significant trend. As for whether it’s substantive (ie not likely to correct), well, I’ve seen many economists suggesting a correction “soon” for years. The more worrying thing is the consumer reports I’ve read. They said people aren’t saving money in 401ks, nor even savings accounts. This could indicate high confidence in the market. Or, it could indicate a lack of income to save. I’ve read reports indicating the later and not the former - specifically reports of people working multiple jobs to afford the basics. If that’s the case then luxury goods and services should be commensurately lower valued. But they’re they are not.
swypych 9y ago
I would not be surprised if the long term goal is to not just produce but to be THE market place for all music. They already promote tickets to concerts, why stop at promotion, they could easily displace ticketmaster, and with ticketmasters lack of goodwill I am sure lots of people would be happy for this to happen.
- dannyw 9y ago
  Start off by offering no fees for Spotify Premium members. Charge the event organizers the fee, or take it as a loss leader initially. The value add of Spotify is an unique avenue for promotion (e.g. visual displays of upcoming concerts when playing similar songs, which users are unlikely to see as intrusive ads).
Thrymr 9y ago
> To become music's Netflix they would have to produce their own music which people want to listen to Which would make them (like Netflix) one exclusive content provider (potentially among many) which is fine for them if they can get good content, but not great for users who may find music fragmented like streaming video. The great thing about Spotify now is that they have access to nearly everything. Netflix has a decent streaming library of TV series, but their movie archive is terrible compared to the red envelope DVD.com option (or Blockbuster in its prime). It would be a shame for that to happen to music, too.
rhino369 9y ago
The goal is to make the labels need them too. Plenty of people just won't listen to music if its not on spotify.
dfee 9y ago
The labels have a large stake in Spotify. Your assessment misses this crucial fact. Getting into the production biz is still an open opportunity, though. > According to Spotify's F-1 filing, 85 per cent of their streamed music is owned by the three major labels -- Universal, Sony and Warner -- and Merlin, a network for independents. The major labels also hold a sizable equity position in Spotify, as much as 18 per cent back 2009. This gave Spotify some help when it was renegotiating licensing deals last year. [0] [0] https://ftalphaville.ft.com/2018/03/26/1522056334000/Canvassing-Spotify-s-valuation/ https://ftalphaville.ft.com/2018/03/26/1522056334000/Canvass...

by guelo 9y ago

harshgupta 9y ago

Thats fair, but accessing free music is a lot easier than free tv. If they can get people to pay anything for music, thats at least better than zero for labels.

komali2 9y ago
I think the music industry still isn't quite sure what to do about pirating. Seems their solution is "send spec-op soldiers to kick down doors of people in other countries" still.

gkoberger 9y ago

More than likely it won't come to this. Most musicians want their music everywhere, and give it away for (almost) free. Spotify/radio/etc are the marketing, and concerts/festivals/movie licensing/etc are the product. Unlike movies, there's insane repeatability of music, meaning it can be everywhere. I wouldn't be surprised, though, if less-popular tracks for artists moved to another service. You want to hear The Chainsmoker's radio singles? Play them non-stop on Spotify! But if you're a huge fan and want to hear back tracks, demos, etc, you can pay them $10/mo on a Patreon-like site. Basically, charging more for a closer relationship to studios you like, while their more popular music is released for free.

paxy 9y ago

The equivalent would be to start their own label and sign artists. It's hard, sure, but not impossible. They have the same advantage Netflix did - an intimate knowledge of people's musical tastes and habits. Plus they have already shown willingness to diversify into other areas - merch, concerts, original shows, videos etc.

TremendousJudge 9y ago
The thing is, Netflix now is very different from Netflix 5 years ago -- most of the content is the one they produce. Music doesn't work this way, many people just want to listen to old music while it's rare for people to rewatch old shows and movies. There are many albums I have listened to tens of times, and I don't think I have ever watched a film more than three or four times. If the labels pull the artists to make their own Spotifies, Spotify will be left with pretty much nothing, in a situation much worse than Netflix

jetti 9y ago

>To become the music's Netflix they would have to produce their own music which people want to listen to, which is a lot easier said then done. What Spotify has going for it is that indie artists can easily (or at least relatively easily) put their music up on Spotify, which bypasses the record labels. Now, not all of that music is going to be good but that is a way they are already bypassing record labels.

atwebb 9y ago

They could look at purchasing Bandcamp, which has done a great job of promoting and selling independent music.

rainbowmverse 9y ago
Bandcamp lets me download lists of people who've bought my music and of people who follow my profile. This is because they understand the business is mine, and they're simply a service provider for that business. Even their subscription system runs right through the musician's own Stripe account, so you can always take your subscriptions elsewhere. I don't have any reason to trust that a VC-fueled monster like Spotify understands this. If Spotify bought Bandcamp, I would remove my music from it. VC-fueled behemoths like to make people dependent on them. I can't trust my business to a company that gets most of its money from outside investors instead of the people who use the service. Their incentives are fundamentally misaligned with my interests.
- chime 9y ago
  Apologies if I come across as harsh but as a consumer, I would prefer my consumption activities to remain as private as possible. In light of FB news, I don't think even some Options > Privacy Settings on Bandcamp would be sufficient since most people wouldn't do it. I hope Bandcamp is opt-in for this info.
  - rainbowmverse 9y ago
    It is opt-in if you pay for it, but almost no one leaves it unchecked. There's also the option to not require an email for free downloads. Often these are people I've sent from somewhere else, and we talk regularly. It's not like with Facebook where it's a faceless corporation unless you're spending enough on ads to get an account specialist. They generally knew me before they gave me money. I'm not collecting any data on them other than the email. I don't even run analytics on web pages I control. I wouldn't even know what to do with it that would tell me anything I don't already know, or that I couldn't get by just asking.
  - 9y ago

reaperducer 9y ago

>To become music's Netflix they would have to produce their own music which people want to listen to Didn't Starbucks try something like that? I think it was called Hear Music.

isostatic 9y ago

Or purchase some existing labels. Warner, which is about 20% of the global market, was worth $3.3b -- 11% of spotify -- in 2011 [1] If I read that correctly, it implies the bulk of the recording industry is worth less than Spotify. 1. https://www.reuters.com/article/us-warnermusic/blavatniks-access-wins-warner-music-for-3-3-billion-idUSTRE74407920110506 https://www.reuters.com/article/us-warnermusic/blavatniks-ac...

paulie_a 9y ago
People tend to overestimate the size of the music and movie industries, apple and google could buy them outright with change from their couch cushions.
- isostatic 9y ago
  What that says about Spotify's valuation is another thing
  - Skunkleton 9y ago
    This is something that has been bothering me. Doesn't it seem like stock prices are getting out of whack?
    - matthewbauer 9y ago
      Yes although this mostly just applies to consumer tech companies.
    - ianai 9y ago
      Nearly all companies I’ve researched on the exchanges have historical highs going back a couple years. This is across multiple industries (tech, utilities, real estate, grocers). It’s a significant trend. As for whether it’s substantive (ie not likely to correct), well, I’ve seen many economists suggesting a correction “soon” for years. The more worrying thing is the consumer reports I’ve read. They said people aren’t saving money in 401ks, nor even savings accounts. This could indicate high confidence in the market. Or, it could indicate a lack of income to save. I’ve read reports indicating the later and not the former - specifically reports of people working multiple jobs to afford the basics. If that’s the case then luxury goods and services should be commensurately lower valued. But they’re they are not.

swypych 9y ago

I would not be surprised if the long term goal is to not just produce but to be THE market place for all music. They already promote tickets to concerts, why stop at promotion, they could easily displace ticketmaster, and with ticketmasters lack of goodwill I am sure lots of people would be happy for this to happen.

dannyw 9y ago
Start off by offering no fees for Spotify Premium members. Charge the event organizers the fee, or take it as a loss leader initially. The value add of Spotify is an unique avenue for promotion (e.g. visual displays of upcoming concerts when playing similar songs, which users are unlikely to see as intrusive ads).

Thrymr 9y ago

> To become music's Netflix they would have to produce their own music which people want to listen to Which would make them (like Netflix) one exclusive content provider (potentially among many) which is fine for them if they can get good content, but not great for users who may find music fragmented like streaming video. The great thing about Spotify now is that they have access to nearly everything. Netflix has a decent streaming library of TV series, but their movie archive is terrible compared to the red envelope DVD.com option (or Blockbuster in its prime). It would be a shame for that to happen to music, too.

rhino369 9y ago

The goal is to make the labels need them too. Plenty of people just won't listen to music if its not on spotify.

dfee 9y ago

The labels have a large stake in Spotify. Your assessment misses this crucial fact. Getting into the production biz is still an open opportunity, though. > According to Spotify's F-1 filing, 85 per cent of their streamed music is owned by the three major labels -- Universal, Sony and Warner -- and Merlin, a network for independents. The major labels also hold a sizable equity position in Spotify, as much as 18 per cent back 2009. This gave Spotify some help when it was renegotiating licensing deals last year. [0] [0] https://ftalphaville.ft.com/2018/03/26/1522056334000/Canvassing-Spotify-s-valuation/ https://ftalphaville.ft.com/2018/03/26/1522056334000/Canvass...