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I do love Spotify as a product, however I don't think it will scale the same way Netflix does. Spotify is at the mercy of major record labels, and as their book

I do love Spotify as a product, however I don't think it will scale the same way Netflix does. Spotify is at the mercy of major record labels, and as their books become more transparent the record labels will squeeze every dollar they can for licensing. That is, unless they find a way to upend the record industry entirely. Spotify has a unique position with their amazing discovery/recommendations engine- they could potentially start their own "label" and promote their own artists that sign on. Small/independent musicians could see more exposure and Spotify can deliver more music tailored for individual tastes. I've personally found myself listening to lots of small/indie artists as a result of their algorithms, to the point that these now make up the majority of my listening experience. I think getting into concert tickets/streams, merchandise etc could help them potentially capture quite a bit of value in the future as well. I know the comparison is similar to original content & Netflix - but keep in mind there's an opportunity cost with media (one can only consume X amount of shows/songs within a period of time). The more attention Spotify can divert away from the major record labels the better.

foepys 9y ago
Netflix could be in the same position. With Disney launching their own streaming services next year, the situation could get dire for Netflix, too, if Netflix' own productions don't take off as much as they want.
- adventured 9y ago
  It's very doubtful that Disney is or could be an serious issue for Netflix now. Netflix is approaching - or already larger than - the size of Disney's comparable entertainment business, and Netflix is growing relatively fast whereas Disney's business isn't growing much or at all. Disney's studio division does $8.3 billion in sales. Their media networks arm, which includes ABC & ESPN, does $23 billion. Netflix will hit ~$14-$15 billion in sales this year. Apples to apples in terms of where they compete, Netflix will be comparable to or larger than Disney in size in 2018 or 2019. Five years from now Disney isn't likely to be much larger than they are today (just look at their growth the last few years, flat to minimum). Netflix will very likely be over $25 billion in sales at that point (which would plausibly be larger than Disney's largest business, the media networks group). At the scale Netflix has reached, every dollar of new growth that Netflix is obtaining is taking some bit of revenue away from Disney. Disney is going to mostly cannabilize themselves in switching to their own streaming service, including the mess at ESPN (the end of the hyper lucrative, subsidized cable & satellite subscribers that have been artificially fattening Disney's entertainment wallet for years). Disney is mostly in a scenario of attempting to hold their ground. The same place Walmart is in with Amazon and for the exact same reason (minimum overall market expansion, low consumer spending growth across the developed world, while the new competitor is starting to eat your existing house). Interestingly another similarity between those situations: Amazon is willing to compete at near zero profit generation in retail to pursue sales growth, which is brutal to an established giant like Walmart who has a huge investor base that expects them to generate considerable profits every year. Walmart can't just drop their profits dramatically to compete, their stock would implode. Disney is facing the same storm: Netflix operates at a level of minimal profit (~4%-5% net income margins), whereas Disney's long-established shareholders expect rich profits and a dividend (Disney typically sees 10%-20% margins in their entertainment groups, with a 16% overall net income margin). Netflix is willing to plow almost every dollar back into content production and licensing, and their shareholders cheer that on so long as the top-line growth continues.
  - dwighttk 9y ago
    I don't know how much business 21st Century Fox does compared to your numbers, but Disney is buying "most of" them[1] http://money.cnn.com/2017/12/14/media/disney-fox-deal/index.html http://money.cnn.com/2017/12/14/media/disney-fox-deal/index....
    - adventured 9y ago
      If the acquisition goes well, it could keep Disney ahead of Netflix's scale for another three or four years (on an apples to apples basis). The Fox assets they're acquiring are substantial, however there's zero organic growth in the Fox business (it's closer to a contracting business with 2017 sales below 2015 sales). An acquisition like that might be as likely to throw Disney into chaos as anything and give Netflix a leg up on stealing market share, given the corporate history of very large acquisitions. That also of course depends on what the Netflix growth profile looks like over time as well. For example, does Netflix routinely still generate 15%-20% annual growth after they're up over $20 billion in sales? If so, there's nothing Disney can do to stay with them short of continuing to buy up the rest of the entertainment universe. The global subscriber momentum Netflix has now is incredible. By the time Disney figures out exactly how all of their streaming pieces are going to fit together, Netflix might be up to 250 million global subscribers.
      - dwighttk 9y ago
        Is there a sizable precedent for companies hitting $20 billion in sales and continuing to routinely generate 15-20% growth?
  - exclusiv 9y ago
    Yeah I agree that Disney won't be a serious issue for Netflix. You may see some users cut Hulu or Prime out and add Disney but Netflix is still in a good place. > Apples to apples in terms of where they compete, Netflix will be comparable to or larger than Disney in size in 2018 or 2019. For share of streaming wallet yes; but they hover at only about 5% of net income. So Disney doesn't need to be anywhere near the subscriber amount to reinvest heavily in content and acquisition. Also - Netflix has the US mostly saturated so they have to create or sign content for the various international markets. While Disney already has great content with global appeal.
- madshiva 9y ago
  Don't care about Disney, if Disney do this fine. Nobody should watch these animation movie, and especially kids. If one day I had a Kid, I would block them from watching this shit.
gm-conspiracy 9y ago
It is alot easier (cost and effort) to start a band and put on album on Spotify, compared to creating a movie/tv show. Consumption is different, as well - several minutes at a time versus dedicated visual attention for a minimum of 22 minutes.
- whatok 9y ago
  And how is anyone supposed to sift through all that garbage to find something worthwhile?
  - whitepoplar 9y ago
    Discover Weekly
    - whatok 9y ago
      Who is listening to all of this self-published music to get training data for Discover Weekly?
      - samfriedman 9y ago
        I'd imagine that the self-published music gets discovered by a few people and put into playlists, then more people who follow those playlists discover those songs, and then they percolate upwards through layers of algorithmic and editorial Spotify playlist generation including Discover Weekly. There's also the Fresh Finds playlists, which work a little differently by surfacing unknown songs that "tastemakers" have been listening to.
        whatok 9y ago
        Agreed that your hypothesis makes sense given the current state of things but I do not think it scales with any sort of consistency/quality control in the utopian "no labels all self-published" world.
      - noxToken 9y ago
TAForObvReasons 9y ago
Netflix was at the mercy of the content producers but it managed to work out of the hole by making its own content. Even if Netflix dropped the entire third party content repo, their current production content is enough to justify a subscription for many people. Spotify could easily follow Netflix's playbook by identifying musical trends that people enjoy and crafting new music.
azemetre 9y ago
Spotify has many "session" recordings from a variety of artists, they also have live albums from concerts that aren't available anywhere else on the internet. Trust me, I've been scouring every dark corner of the net for a recording of Run The Jewels Sxsw 2015 concert to no avail.
- chucksmash 9y ago
  what.cd would have had it in FLAC, Ogg Vorbis, AAC and six different bitrates of MP3. Leaving legality aside, I was always really impressed with the level of curation people put into that particular private tracker. You could find every vinyl and CD release of Miles Davis' Kind of Blue in just about every file format you could hope for. I hope eventually streaming services become so low-friction and commonly used that enforcing copyright takedowns on sites like what.cd will become a thing of the past and we can benefit from their value as a deep archive of esoterica.
  - philg_jr 9y ago
    ugh I get legitimately sad thinking about how what.cd slammed its doors shut unexpectedly, never to be seen again.
ChuckMcM 9y ago
> Spotify is at the mercy of major record labels For now. They have a large enough reach to essentially "become" a major record label, all they need is to start signing artists to contracts.
- lern_too_spel 9y ago
  They can't pay them as well.
  - ChuckMcM 9y ago
    I'm curious how you get to that conclusion, care to share your reasoning?
    - lern_too_spel 9y ago
      If they could do it and reduce costs that way, they would have done it already. In the Netflix case, licensing third party content was cheaper than creating their own and probably still is. Creating their own content acts as a differentiator for their service with the potential for future cost savings
- DisruptiveDave 9y ago
  Spotify + extreme bias towards X # of artists due to rights ownership = potentially crap experience for listeners.
  - ChuckMcM 9y ago
    I don't disagree, if you look at the way Netflix pushes their own content over what used to be entirely studio movies and network TV shows you can see a current example of how this plays out. I was thinking that if Spotify kept the same experience for listeners that they had now in order to grow their subscription base, and just reported higher earnings for the artists they had signed versus ones signed to a 'different' label, that over time as contracts came up for renewal people would move over to Spotify.
wj 9y ago
I agree they should sign exclusive deals with artists which would give them leverage in their negotiations with the record labels with an eye on the long-term hope of breaking that reliance on them. They won't be able to get into concert tickets at the present time in any significant way due to the exclusive agreements between Ticketmaster and venues. Though maybe the could start with some smaller acts and venues and work their way up. Live performances is where the money is for the artists which is why record labels are now signing acts up for complete deals which include not just the music rights but the concert and merch rights as well. Edit: as somebody who has tried to buy tickets to a hot show on Ticketmaster the second they go on sale and watched the servers melt, it is Amazon that I would like to see get in the ticket game.
- Stanleyc23 9y ago
  IMO signing exclusive artists seems like a strategic red herring because such deals would not be done in a vacuum. I think the transition period in building up substantial leverage with exclusive artists means theres quite a bit of time for the record labels to retaliate. My pie in the sky recommendation would be to figure out a way to offer a record label's services for free without exclusivity. Then existing labels will have nowhere to turn.
- dizzy3gg 9y ago
  https://tickets.amazon.co.uk/sd https://tickets.amazon.co.uk/sd
- mitsubishi77 9y ago
  >as somebody who has tried to buy tickets to a hot show on Ticketmaster the second they go on sale and watched the servers melt... I’m just as amazed by that this problem has yet to get solved today as I was 15 years ago.
  - lovemenot 9y ago
    Presumably it's a technological arms race in which the platform has little incentive to innovate to get ahead of the touts. The platform gets paid either way, whether fans or touts are buying. Touts however, are massively incented to keep fans away from the hottest tickets.
rafiki6 9y ago
Soon enough Spotify will become the record label. All a record label does is, produce, promote and distribute. It's an antiquated model.
- seabrookmx 9y ago
  Most labels don't even distribute. There's standalone businesses that do that. See Ingrooves, The Orchard, ADA (owned by Warner but run as a standalone business IIRC). For indies that have fewer requirements, there's lots of cheaper options such as TuneCore, DistroKid, and CD baby as well.
nickysielicki 9y ago
> Spotify has a unique position with their amazing discovery/recommendations engine- they could potentially start their own "label" and promote their own artists that sign on. Small/independent musicians could see more exposure and Spotify can deliver more music tailored for individual tastes. I've personally found myself listening to lots of small/indie artists as a result of their algorithms, to the point that these now make up the majority of my listening experience. Have you ever used last.fm? I would be interested to hear if people still think that last.fm gives better recommendations than spotify can. I use last.fm with various music streaming services, currently Google Play Music, previously Amazon, but always using last.fm for discovering. With the amount of users spotify has, it wouldn't surprise me to hear that it has eclipsed last.fm in terms of recommendation quality.
- skinnymuch 9y ago
  I use both for recommendations still. They both have their weaknesses. I’d probably lean toward Spotify if I had to now but I’m perfectly happy using both.
- Zarath 9y ago
  last.fm is easily the best discovery tool I've ever used. They do have spotify integration now though
oh_sigh 9y ago
Small artists are great, but music and money to be made from music seems to be dominated by large artists. Could Spotify ever sign, say, Taylor Swift?
- softawre 9y ago
  ask yourself 5 years ago: Could Netflix ever sign, say, Adam Sandler?
  - paulie_a 9y ago
    Probably. It's not like he is top rate talent, he will literally do anything for a check.
  - duncan_bayne 9y ago
    You mean as an exec? He'd be a better fit with Uber I'd have thought.
linkmotif 9y ago
> That is, unless they find a way to upend the record industry entirely. It seems like they can and are on their way already.
Asdfbla 9y ago
Didn't record labels complain some time ago that Spotify had supposedly commissioned music for its instrumental playlists (presumably to save money on royalties)? There's probably a danger that large record labels will threaten to revoke their licensing agreements if they think that Spotify may start competing with them on that front. Not sure if that will be a problem, though, I'm not familiar with the whole streaming market.
- toomuchtodo 9y ago
  Spotify could then turn into a label + live music organizer, giving artists more of a cut and cutting out labels entirely.
  - fspacef 9y ago
    This. The money in the game doesn't come from just direct sales and hasn't for quite sometime. In the same vein an artist can get a million streams and still make >$5000. [1] In recent years artists like Drake have started their own labels and collaborated directly with tour organizers to generate different sources of income and cut out middlemen. While it's difficult to imagine Spotify generating hit music at the same pace as Netflix produces hit shows, there is nothing stopping them from becoming a tour organizer or bringing artists to perform at their own show (hint: iTunes festival). If they are really serious about the long term they would be developing new ways to experience "live" music. Perhaps VR concerts and performances or features that let the audience send feedback to the artists. The good news is that they have shown they are not afraid of trying new things (ex: Video player within the playlist and the RapGenius tie ins). Time will tell but I am bullish on Spotify changing how we listen to music for the better because the industry is ripe for a new disruption (Records -> CDs -> Digital -> ???) [1] - https://www.digitalmusicnews.com/2016/05/26/band-1-million-spotify-streams-royalties/ https://www.digitalmusicnews.com/2016/05/26/band-1-million-s...
    - whatok 9y ago
      > In recent years artists like Drake have started their own labels and collaborated directly with tour organizers to generate different sources of income and cut out middlemen. Drake starting his own "label" is not a new innovation he came up with (rappers been doing that since the 90s) and still comes with just as many middlemen. Emphasis on last sentence in quote. >During the composition of Nothing Was the Same, Drake started his own record label in late 2012 with producer Noah "40" Shebib, and business partner, Oliver El-Khatib. Drake sought for an avenue to release his own music, as well helping in the nurturing of other artists, while Shebib and El-Khatib yearned to start a label with a distinct sound, prompting the trio to team up to form OVO Sound.[297] The name is an abbreviation derived from the October's Very Own moniker Drake used to publish his earlier projects. The label is currently distributed by Warner Bros. Records. https://en.wikipedia.org/wiki/Drake_(musician)#OVO_Sound https://en.wikipedia.org/wiki/Drake_(musician)#OVO_Sound
_zachs 9y ago
Starting their own label is exactly what they need to do to remain competitive. It's exactly what Netflix ended up doing and I think it's turning out pretty well for them. I wouldn't be surprised if Spotify tried poaching higher-level strategy people from Netflix.
- graphitezepp 9y ago
  I doubt the need to poach the people, just the strategy itself. Would likely be better to find people used to managing bands, or doing whichever relevant recording company position, at a high level I would suspect
- simias 9y ago
  I'm not convinced. You don't consume music the way you consume TV shows and movies, it's often a more "passive" activity where you start a playlist in the background while you do other things. You can do that with movie/TV shows of course but a movie will last you ~two hours while a TV show can literally last you days or weeks at a time without input if you really like having The Office in the background while you do other things. Assuming that you can afford buying subscriptions to various services it's not massively annoying to have to use HBO Go to watch Westworld and Netflix to watch Arrested Development. It's not as good as having a unified service but it does the job. If like me you like composing playlists instead of playing one full album at a time then not having the vast majority of your music available on a single service is a huge deal breaker. When I hear a song out there and I want to add it to my playlist I expect that it will be available on Spotify and the vast majority of the time I'm right. If I need to go hunt for songs on various services and I can't easily make a single unified playlist with all of it I think it'll be back to piracy for me, it won't be less convenient and it'll be much cheaper.
  - gehsty 9y ago
    I think Spotify's model would need to be slightly different to Netflix, I think they would still need to allow their artists music onto other platforms. The need for them to be a record label is not for exclusivity, it is so they can operate as an equal partner. At the moment their entire business is based on negotiating deals with record labels, all Spotify can offer is revenue, so they will be squeezed and squeezed as each contract is negotiated and renegotiated. Every artist that signs up to them will save them this cost in the long run... So I'm sure there'll be seemingly crazy deals like comedians have been striking with Netflix, which in the long run are will be very beneficial to Spotify.
amelius 9y ago
I like Spotify too. But in the end, it will just be another MegaCorp controlling music, especially when shareholders are involved. So I'd rather see the delicate balance between all parties maintained as-is.
skadamat 9y ago
This Exponent episode on Spotify is excellent and they discuss how they don't have quite the same power as Netflix but still more than people appreciate - http://exponent.fm/episode-144-90s-alt-forever/ http://exponent.fm/episode-144-90s-alt-forever/
zitterbewegung 9y ago
I use Spotify more than Netflix at this point.
antishatter 9y ago
http://www.swedishwire.com/jobs/680-record-labels-part-owner-of-spotify http://www.swedishwire.com/jobs/680-record-labels-part-owner... This should be considered when making points about what the Record Industry will allow spotify to get away with. They own a lot of the shares at play here.
kylemh 9y ago
It's funny that you described it as less scalable, but proceeded to detail many great ways for the company to scale. Great ideas all around.
moistoreos 9y ago
starting a new label would be a massive undertaking. maybe partner with Google and snag popular YouTube channel sign and distribute only within the Spotify ecosystem. HERE'S THE PROBLEM: Spotify doesn't pay shit to artists. They will have to increase the level of financial contribution to artists if they take this avenue.
- Audiophilip 9y ago
  Actually, they pay way better than most other streaming services: https://torrentfreak.com/artists-think-instead-spewing-spotify-hate-140222/ https://torrentfreak.com/artists-think-instead-spewing-spoti... Quote: “I can tell you that Spotify has made me about 30% more than iTunes, Pandora, Amazon, Xbox Music, Google Play, eMusic, Rhapsody, Rdio, Deezer, MediaNet, Simky, Nokia, and MySpace Music combined in that period. Even if you tack on my checks from ASCAP to that long list, Spotify is still ahead,”
  - FridgeSeal 9y ago
    It's fine if you're a huge artist like Beyonce, but I've read plenty of accounts from artists who bemoan Spotify's distinct lack of useful payout. You get paid proportional to your plays, so even if you're a successful drum and bass artist, you're going to struggle to be supported by your fans via Spotify than via something like Bandcamp. That's one of the reasons I went back to buying my music from Bandcamp/Beatport. I'll contribute significantly more to the artist than I ever would via streaming, and that's important if I like their work and want them to keep producing.
- kalleboo 9y ago
  > Spotify doesn't pay shit to artists I thought that Spotify didn't pay ANYTHING to artists. They pay to labels, who then pay to artists depending on their recording contract.
jonbarker 9y ago
How is Netflix not at the mercy of major movie studios? Their originals, while popular, are not a proven business model. No tech company to my knowledge has proven that taking content 'in house' improves the bottom line, yet. Pandora attempted to get into tickets and I don't think that went well although I am not sure a true stratechery style analysis of that has ever been done to my knowledge.
bln_wgc 9y ago
I think a different interesting comparable is Uber. Both have really promising revenue growth stories, but (unlike Netflix) have no control over content/supply costs. For both Spotify and Uber ~80% of that gross revenue number goes straight to either record companies or driver commissions and rider subsidies. And the 80% does not diminish with scale. Uber's 2017 gross revenue was 37B to Spotify's 4B, but the valuations are 50B to 30B. Think Spotify's valuation is a little overheated?
itakedrugs 9y ago
Spotify could do what Netflix started doing and produce their own music... Netflix used to be at the studio's complete mercy too.
owly 9y ago
Why has Apple not started their own label? They have enough cash to buyout almost any artist.
- jnosCo 9y ago
  Maybe something to do with https://www.apple.com/newsroom/2007/02/05Apple-Inc-and-The-Beatles-Apple-Corps-Ltd-Enter-into-New-Agreement/ https://www.apple.com/newsroom/2007/02/05Apple-Inc-and-The-B...
dude_abide 9y ago
I honestly hope they don't take that approach. One of the biggest benefits of spotify is that they have damn near everything. If suddenly music becomes fragmented across a bunch of different services (like video), spotify loses their value.
EnderMB 9y ago
This seems to be an area where they are limited compared to Apple. In my view, Spotify have pretty much "won" the streaming war. They beat Apple to the market with their streaming offering, and they have a good product that people love. The one area Apple has Spotify beat is in its understanding of the music industry. Apple's acquisition of Beats seemed ridiculous at the time, but getting Jimmy Iovine on your side in a music war is like having Goku on your side in a Universe Survival Tournament. When you've got the likes of Jimmy Iovine and Zane Lowe committed to your cause, you're going to know how record labels work, how the industry works, and given that Iovine recently came out to say that streaming services are similar and need to diversify to succeed I'd be inclined to agree with him. Apple have failed in the past by trying to make its music exclusive and by having artists on its payroll try to attack Spotify (to backlash on both sides). It makes me think that Spotify could wrap things up by doing what you say, but licensing its own songs equally to all other streaming services. Instead of doing what Apple did, promote availability by ensuring their music is played on competing services. Of course, to do this Spotify will need their own Iovine, and that's no mean feat. They'd need world-class talent behind them to find musicians, produce them, and market them in the way that Apple potentially could. If Spotify can build that dream team and create their own means of production then, in my view, they've won.

foepys 9y ago

Netflix could be in the same position. With Disney launching their own streaming services next year, the situation could get dire for Netflix, too, if Netflix' own productions don't take off as much as they want.

adventured 9y ago
It's very doubtful that Disney is or could be an serious issue for Netflix now. Netflix is approaching - or already larger than - the size of Disney's comparable entertainment business, and Netflix is growing relatively fast whereas Disney's business isn't growing much or at all. Disney's studio division does $8.3 billion in sales. Their media networks arm, which includes ABC & ESPN, does $23 billion. Netflix will hit ~$14-$15 billion in sales this year. Apples to apples in terms of where they compete, Netflix will be comparable to or larger than Disney in size in 2018 or 2019. Five years from now Disney isn't likely to be much larger than they are today (just look at their growth the last few years, flat to minimum). Netflix will very likely be over $25 billion in sales at that point (which would plausibly be larger than Disney's largest business, the media networks group). At the scale Netflix has reached, every dollar of new growth that Netflix is obtaining is taking some bit of revenue away from Disney. Disney is going to mostly cannabilize themselves in switching to their own streaming service, including the mess at ESPN (the end of the hyper lucrative, subsidized cable & satellite subscribers that have been artificially fattening Disney's entertainment wallet for years). Disney is mostly in a scenario of attempting to hold their ground. The same place Walmart is in with Amazon and for the exact same reason (minimum overall market expansion, low consumer spending growth across the developed world, while the new competitor is starting to eat your existing house). Interestingly another similarity between those situations: Amazon is willing to compete at near zero profit generation in retail to pursue sales growth, which is brutal to an established giant like Walmart who has a huge investor base that expects them to generate considerable profits every year. Walmart can't just drop their profits dramatically to compete, their stock would implode. Disney is facing the same storm: Netflix operates at a level of minimal profit (~4%-5% net income margins), whereas Disney's long-established shareholders expect rich profits and a dividend (Disney typically sees 10%-20% margins in their entertainment groups, with a 16% overall net income margin). Netflix is willing to plow almost every dollar back into content production and licensing, and their shareholders cheer that on so long as the top-line growth continues.
- dwighttk 9y ago
  I don't know how much business 21st Century Fox does compared to your numbers, but Disney is buying "most of" them[1] http://money.cnn.com/2017/12/14/media/disney-fox-deal/index.html http://money.cnn.com/2017/12/14/media/disney-fox-deal/index....
  - adventured 9y ago
    If the acquisition goes well, it could keep Disney ahead of Netflix's scale for another three or four years (on an apples to apples basis). The Fox assets they're acquiring are substantial, however there's zero organic growth in the Fox business (it's closer to a contracting business with 2017 sales below 2015 sales). An acquisition like that might be as likely to throw Disney into chaos as anything and give Netflix a leg up on stealing market share, given the corporate history of very large acquisitions. That also of course depends on what the Netflix growth profile looks like over time as well. For example, does Netflix routinely still generate 15%-20% annual growth after they're up over $20 billion in sales? If so, there's nothing Disney can do to stay with them short of continuing to buy up the rest of the entertainment universe. The global subscriber momentum Netflix has now is incredible. By the time Disney figures out exactly how all of their streaming pieces are going to fit together, Netflix might be up to 250 million global subscribers.
    - dwighttk 9y ago
      Is there a sizable precedent for companies hitting $20 billion in sales and continuing to routinely generate 15-20% growth?
- exclusiv 9y ago
  Yeah I agree that Disney won't be a serious issue for Netflix. You may see some users cut Hulu or Prime out and add Disney but Netflix is still in a good place. > Apples to apples in terms of where they compete, Netflix will be comparable to or larger than Disney in size in 2018 or 2019. For share of streaming wallet yes; but they hover at only about 5% of net income. So Disney doesn't need to be anywhere near the subscriber amount to reinvest heavily in content and acquisition. Also - Netflix has the US mostly saturated so they have to create or sign content for the various international markets. While Disney already has great content with global appeal.
madshiva 9y ago
Don't care about Disney, if Disney do this fine. Nobody should watch these animation movie, and especially kids. If one day I had a Kid, I would block them from watching this shit.

gm-conspiracy 9y ago

It is alot easier (cost and effort) to start a band and put on album on Spotify, compared to creating a movie/tv show. Consumption is different, as well - several minutes at a time versus dedicated visual attention for a minimum of 22 minutes.

whatok 9y ago
And how is anyone supposed to sift through all that garbage to find something worthwhile?
- whitepoplar 9y ago
  Discover Weekly
  - whatok 9y ago
    Who is listening to all of this self-published music to get training data for Discover Weekly?
    - samfriedman 9y ago
      I'd imagine that the self-published music gets discovered by a few people and put into playlists, then more people who follow those playlists discover those songs, and then they percolate upwards through layers of algorithmic and editorial Spotify playlist generation including Discover Weekly. There's also the Fresh Finds playlists, which work a little differently by surfacing unknown songs that "tastemakers" have been listening to.
      - whatok 9y ago
        Agreed that your hypothesis makes sense given the current state of things but I do not think it scales with any sort of consistency/quality control in the utopian "no labels all self-published" world.
    - noxToken 9y ago

TAForObvReasons 9y ago

Netflix was at the mercy of the content producers but it managed to work out of the hole by making its own content. Even if Netflix dropped the entire third party content repo, their current production content is enough to justify a subscription for many people. Spotify could easily follow Netflix's playbook by identifying musical trends that people enjoy and crafting new music.

azemetre 9y ago

Spotify has many "session" recordings from a variety of artists, they also have live albums from concerts that aren't available anywhere else on the internet. Trust me, I've been scouring every dark corner of the net for a recording of Run The Jewels Sxsw 2015 concert to no avail.

chucksmash 9y ago
what.cd would have had it in FLAC, Ogg Vorbis, AAC and six different bitrates of MP3. Leaving legality aside, I was always really impressed with the level of curation people put into that particular private tracker. You could find every vinyl and CD release of Miles Davis' Kind of Blue in just about every file format you could hope for. I hope eventually streaming services become so low-friction and commonly used that enforcing copyright takedowns on sites like what.cd will become a thing of the past and we can benefit from their value as a deep archive of esoterica.
- philg_jr 9y ago
  ugh I get legitimately sad thinking about how what.cd slammed its doors shut unexpectedly, never to be seen again.

ChuckMcM 9y ago

> Spotify is at the mercy of major record labels For now. They have a large enough reach to essentially "become" a major record label, all they need is to start signing artists to contracts.

lern_too_spel 9y ago
They can't pay them as well.
- ChuckMcM 9y ago
  I'm curious how you get to that conclusion, care to share your reasoning?
  - lern_too_spel 9y ago
    If they could do it and reduce costs that way, they would have done it already. In the Netflix case, licensing third party content was cheaper than creating their own and probably still is. Creating their own content acts as a differentiator for their service with the potential for future cost savings
DisruptiveDave 9y ago
Spotify + extreme bias towards X # of artists due to rights ownership = potentially crap experience for listeners.
- ChuckMcM 9y ago
  I don't disagree, if you look at the way Netflix pushes their own content over what used to be entirely studio movies and network TV shows you can see a current example of how this plays out. I was thinking that if Spotify kept the same experience for listeners that they had now in order to grow their subscription base, and just reported higher earnings for the artists they had signed versus ones signed to a 'different' label, that over time as contracts came up for renewal people would move over to Spotify.

wj 9y ago

I agree they should sign exclusive deals with artists which would give them leverage in their negotiations with the record labels with an eye on the long-term hope of breaking that reliance on them. They won't be able to get into concert tickets at the present time in any significant way due to the exclusive agreements between Ticketmaster and venues. Though maybe the could start with some smaller acts and venues and work their way up. Live performances is where the money is for the artists which is why record labels are now signing acts up for complete deals which include not just the music rights but the concert and merch rights as well. Edit: as somebody who has tried to buy tickets to a hot show on Ticketmaster the second they go on sale and watched the servers melt, it is Amazon that I would like to see get in the ticket game.

Stanleyc23 9y ago
IMO signing exclusive artists seems like a strategic red herring because such deals would not be done in a vacuum. I think the transition period in building up substantial leverage with exclusive artists means theres quite a bit of time for the record labels to retaliate. My pie in the sky recommendation would be to figure out a way to offer a record label's services for free without exclusivity. Then existing labels will have nowhere to turn.
dizzy3gg 9y ago
https://tickets.amazon.co.uk/sd https://tickets.amazon.co.uk/sd
mitsubishi77 9y ago
>as somebody who has tried to buy tickets to a hot show on Ticketmaster the second they go on sale and watched the servers melt... I’m just as amazed by that this problem has yet to get solved today as I was 15 years ago.
- lovemenot 9y ago
  Presumably it's a technological arms race in which the platform has little incentive to innovate to get ahead of the touts. The platform gets paid either way, whether fans or touts are buying. Touts however, are massively incented to keep fans away from the hottest tickets.

rafiki6 9y ago

Soon enough Spotify will become the record label. All a record label does is, produce, promote and distribute. It's an antiquated model.

seabrookmx 9y ago
Most labels don't even distribute. There's standalone businesses that do that. See Ingrooves, The Orchard, ADA (owned by Warner but run as a standalone business IIRC). For indies that have fewer requirements, there's lots of cheaper options such as TuneCore, DistroKid, and CD baby as well.

nickysielicki 9y ago

> Spotify has a unique position with their amazing discovery/recommendations engine- they could potentially start their own "label" and promote their own artists that sign on. Small/independent musicians could see more exposure and Spotify can deliver more music tailored for individual tastes. I've personally found myself listening to lots of small/indie artists as a result of their algorithms, to the point that these now make up the majority of my listening experience. Have you ever used last.fm? I would be interested to hear if people still think that last.fm gives better recommendations than spotify can. I use last.fm with various music streaming services, currently Google Play Music, previously Amazon, but always using last.fm for discovering. With the amount of users spotify has, it wouldn't surprise me to hear that it has eclipsed last.fm in terms of recommendation quality.

skinnymuch 9y ago
I use both for recommendations still. They both have their weaknesses. I’d probably lean toward Spotify if I had to now but I’m perfectly happy using both.
Zarath 9y ago
last.fm is easily the best discovery tool I've ever used. They do have spotify integration now though

oh_sigh 9y ago

Small artists are great, but music and money to be made from music seems to be dominated by large artists. Could Spotify ever sign, say, Taylor Swift?

softawre 9y ago
ask yourself 5 years ago: Could Netflix ever sign, say, Adam Sandler?
- paulie_a 9y ago
  Probably. It's not like he is top rate talent, he will literally do anything for a check.
- duncan_bayne 9y ago
  You mean as an exec? He'd be a better fit with Uber I'd have thought.

linkmotif 9y ago

> That is, unless they find a way to upend the record industry entirely. It seems like they can and are on their way already.

Asdfbla 9y ago

Didn't record labels complain some time ago that Spotify had supposedly commissioned music for its instrumental playlists (presumably to save money on royalties)? There's probably a danger that large record labels will threaten to revoke their licensing agreements if they think that Spotify may start competing with them on that front. Not sure if that will be a problem, though, I'm not familiar with the whole streaming market.

toomuchtodo 9y ago
Spotify could then turn into a label + live music organizer, giving artists more of a cut and cutting out labels entirely.
- fspacef 9y ago
  This. The money in the game doesn't come from just direct sales and hasn't for quite sometime. In the same vein an artist can get a million streams and still make >$5000. [1] In recent years artists like Drake have started their own labels and collaborated directly with tour organizers to generate different sources of income and cut out middlemen. While it's difficult to imagine Spotify generating hit music at the same pace as Netflix produces hit shows, there is nothing stopping them from becoming a tour organizer or bringing artists to perform at their own show (hint: iTunes festival). If they are really serious about the long term they would be developing new ways to experience "live" music. Perhaps VR concerts and performances or features that let the audience send feedback to the artists. The good news is that they have shown they are not afraid of trying new things (ex: Video player within the playlist and the RapGenius tie ins). Time will tell but I am bullish on Spotify changing how we listen to music for the better because the industry is ripe for a new disruption (Records -> CDs -> Digital -> ???) [1] - https://www.digitalmusicnews.com/2016/05/26/band-1-million-spotify-streams-royalties/ https://www.digitalmusicnews.com/2016/05/26/band-1-million-s...
  - whatok 9y ago
    > In recent years artists like Drake have started their own labels and collaborated directly with tour organizers to generate different sources of income and cut out middlemen. Drake starting his own "label" is not a new innovation he came up with (rappers been doing that since the 90s) and still comes with just as many middlemen. Emphasis on last sentence in quote. >During the composition of Nothing Was the Same, Drake started his own record label in late 2012 with producer Noah "40" Shebib, and business partner, Oliver El-Khatib. Drake sought for an avenue to release his own music, as well helping in the nurturing of other artists, while Shebib and El-Khatib yearned to start a label with a distinct sound, prompting the trio to team up to form OVO Sound.[297] The name is an abbreviation derived from the October's Very Own moniker Drake used to publish his earlier projects. The label is currently distributed by Warner Bros. Records. https://en.wikipedia.org/wiki/Drake_(musician)#OVO_Sound https://en.wikipedia.org/wiki/Drake_(musician)#OVO_Sound

_zachs 9y ago

Starting their own label is exactly what they need to do to remain competitive. It's exactly what Netflix ended up doing and I think it's turning out pretty well for them. I wouldn't be surprised if Spotify tried poaching higher-level strategy people from Netflix.

graphitezepp 9y ago
I doubt the need to poach the people, just the strategy itself. Would likely be better to find people used to managing bands, or doing whichever relevant recording company position, at a high level I would suspect
simias 9y ago
I'm not convinced. You don't consume music the way you consume TV shows and movies, it's often a more "passive" activity where you start a playlist in the background while you do other things. You can do that with movie/TV shows of course but a movie will last you ~two hours while a TV show can literally last you days or weeks at a time without input if you really like having The Office in the background while you do other things. Assuming that you can afford buying subscriptions to various services it's not massively annoying to have to use HBO Go to watch Westworld and Netflix to watch Arrested Development. It's not as good as having a unified service but it does the job. If like me you like composing playlists instead of playing one full album at a time then not having the vast majority of your music available on a single service is a huge deal breaker. When I hear a song out there and I want to add it to my playlist I expect that it will be available on Spotify and the vast majority of the time I'm right. If I need to go hunt for songs on various services and I can't easily make a single unified playlist with all of it I think it'll be back to piracy for me, it won't be less convenient and it'll be much cheaper.
- gehsty 9y ago
  I think Spotify's model would need to be slightly different to Netflix, I think they would still need to allow their artists music onto other platforms. The need for them to be a record label is not for exclusivity, it is so they can operate as an equal partner. At the moment their entire business is based on negotiating deals with record labels, all Spotify can offer is revenue, so they will be squeezed and squeezed as each contract is negotiated and renegotiated. Every artist that signs up to them will save them this cost in the long run... So I'm sure there'll be seemingly crazy deals like comedians have been striking with Netflix, which in the long run are will be very beneficial to Spotify.

amelius 9y ago

I like Spotify too. But in the end, it will just be another MegaCorp controlling music, especially when shareholders are involved. So I'd rather see the delicate balance between all parties maintained as-is.

skadamat 9y ago

This Exponent episode on Spotify is excellent and they discuss how they don't have quite the same power as Netflix but still more than people appreciate - http://exponent.fm/episode-144-90s-alt-forever/ http://exponent.fm/episode-144-90s-alt-forever/

zitterbewegung 9y ago

I use Spotify more than Netflix at this point.

antishatter 9y ago

http://www.swedishwire.com/jobs/680-record-labels-part-owner-of-spotify http://www.swedishwire.com/jobs/680-record-labels-part-owner... This should be considered when making points about what the Record Industry will allow spotify to get away with. They own a lot of the shares at play here.

kylemh 9y ago

It's funny that you described it as less scalable, but proceeded to detail many great ways for the company to scale. Great ideas all around.

moistoreos 9y ago

starting a new label would be a massive undertaking. maybe partner with Google and snag popular YouTube channel sign and distribute only within the Spotify ecosystem. HERE'S THE PROBLEM: Spotify doesn't pay shit to artists. They will have to increase the level of financial contribution to artists if they take this avenue.

Audiophilip 9y ago
Actually, they pay way better than most other streaming services: https://torrentfreak.com/artists-think-instead-spewing-spotify-hate-140222/ https://torrentfreak.com/artists-think-instead-spewing-spoti... Quote: “I can tell you that Spotify has made me about 30% more than iTunes, Pandora, Amazon, Xbox Music, Google Play, eMusic, Rhapsody, Rdio, Deezer, MediaNet, Simky, Nokia, and MySpace Music combined in that period. Even if you tack on my checks from ASCAP to that long list, Spotify is still ahead,”
- FridgeSeal 9y ago
  It's fine if you're a huge artist like Beyonce, but I've read plenty of accounts from artists who bemoan Spotify's distinct lack of useful payout. You get paid proportional to your plays, so even if you're a successful drum and bass artist, you're going to struggle to be supported by your fans via Spotify than via something like Bandcamp. That's one of the reasons I went back to buying my music from Bandcamp/Beatport. I'll contribute significantly more to the artist than I ever would via streaming, and that's important if I like their work and want them to keep producing.
kalleboo 9y ago
> Spotify doesn't pay shit to artists I thought that Spotify didn't pay ANYTHING to artists. They pay to labels, who then pay to artists depending on their recording contract.

jonbarker 9y ago

How is Netflix not at the mercy of major movie studios? Their originals, while popular, are not a proven business model. No tech company to my knowledge has proven that taking content 'in house' improves the bottom line, yet. Pandora attempted to get into tickets and I don't think that went well although I am not sure a true stratechery style analysis of that has ever been done to my knowledge.

bln_wgc 9y ago

I think a different interesting comparable is Uber. Both have really promising revenue growth stories, but (unlike Netflix) have no control over content/supply costs. For both Spotify and Uber ~80% of that gross revenue number goes straight to either record companies or driver commissions and rider subsidies. And the 80% does not diminish with scale. Uber's 2017 gross revenue was 37B to Spotify's 4B, but the valuations are 50B to 30B. Think Spotify's valuation is a little overheated?

itakedrugs 9y ago

Spotify could do what Netflix started doing and produce their own music... Netflix used to be at the studio's complete mercy too.

owly 9y ago

Why has Apple not started their own label? They have enough cash to buyout almost any artist.

jnosCo 9y ago
Maybe something to do with https://www.apple.com/newsroom/2007/02/05Apple-Inc-and-The-Beatles-Apple-Corps-Ltd-Enter-into-New-Agreement/ https://www.apple.com/newsroom/2007/02/05Apple-Inc-and-The-B...

dude_abide 9y ago

I honestly hope they don't take that approach. One of the biggest benefits of spotify is that they have damn near everything. If suddenly music becomes fragmented across a bunch of different services (like video), spotify loses their value.

EnderMB 9y ago

This seems to be an area where they are limited compared to Apple. In my view, Spotify have pretty much "won" the streaming war. They beat Apple to the market with their streaming offering, and they have a good product that people love. The one area Apple has Spotify beat is in its understanding of the music industry. Apple's acquisition of Beats seemed ridiculous at the time, but getting Jimmy Iovine on your side in a music war is like having Goku on your side in a Universe Survival Tournament. When you've got the likes of Jimmy Iovine and Zane Lowe committed to your cause, you're going to know how record labels work, how the industry works, and given that Iovine recently came out to say that streaming services are similar and need to diversify to succeed I'd be inclined to agree with him. Apple have failed in the past by trying to make its music exclusive and by having artists on its payroll try to attack Spotify (to backlash on both sides). It makes me think that Spotify could wrap things up by doing what you say, but licensing its own songs equally to all other streaming services. Instead of doing what Apple did, promote availability by ensuring their music is played on competing services. Of course, to do this Spotify will need their own Iovine, and that's no mean feat. They'd need world-class talent behind them to find musicians, produce them, and market them in the way that Apple potentially could. If Spotify can build that dream team and create their own means of production then, in my view, they've won.