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I'm not sure about 'always.' Google's search was just one feature of AOL's homepage. In fact, a lot of startups have grown specifically because they focus on o

I'm not sure about 'always.' Google's search was just one feature of AOL's homepage. In fact, a lot of startups have grown specifically because they focus on one thing and their competitors have varied goals.

scarface74 8y ago
It also doesn’t help when you have high marginal costs. Spotify has to pay the record labels for each new user. The marginal cost of each new Google user was basically zero - of course costs go up as a step function, but the marginal cost is less than a rounding error. I don’t know what the numbers are today, but back in the day, the guy in charge of Zune music said they were paying $8 per user for thier subscription music service. Spotify is completely beholden to its suppliers - the record labels. They can and will squeeze every ounce they can get out of Spotify. Apple can afford to operate Apple Music at break even or a slight loss because it is just a feature to sell high profit margin hardware. That’s all Spotify has, it has to make a sustainable profit from streaming.
- ameister14 8y ago
  Spotify is beholden to the record labels for now, but as music sales continue to weaken, much like DVD sales did, Spotify will be grow as one of the main outlets to reach customers for the record labels. If they can swing it they could become a major label themselves, like Netflix has with films and television.
  - scarface74 8y ago
    And Netflix also will have the same problem. Streaming will just be a feature for a company like Disney. By the time a Marvel movie for instance gets to streaming, its already made hundreds of millions of dollars from theatrical releases, dvd sales, VOD, etc. The streaming service doesn’t have to be self sustaining. Netflix is also struggling under a heavy debt load and is still not consistently profitable. If any of the major record labels leave Spotify - they are toast. Especially if all four labels stay on a competing service. People are okay with getting thier movies - that they will probably only watch once from different places. No one wants to have multiple playlists from different services. The music industry already tried that. Before the days of iTunes there were two subscription streaming services - MusicNet and PressPlay. Each had two of the major labels. That failed miserably. If an artist is exclusively on Spotify, they’ve lost exposure to much of the more affluent users who have iPhones and are more invested in the Apple ecosystem.
    - deleted 8y ago
      [deleted]

scarface74 8y ago

It also doesn’t help when you have high marginal costs. Spotify has to pay the record labels for each new user. The marginal cost of each new Google user was basically zero - of course costs go up as a step function, but the marginal cost is less than a rounding error. I don’t know what the numbers are today, but back in the day, the guy in charge of Zune music said they were paying $8 per user for thier subscription music service. Spotify is completely beholden to its suppliers - the record labels. They can and will squeeze every ounce they can get out of Spotify. Apple can afford to operate Apple Music at break even or a slight loss because it is just a feature to sell high profit margin hardware. That’s all Spotify has, it has to make a sustainable profit from streaming.

ameister14 8y ago
Spotify is beholden to the record labels for now, but as music sales continue to weaken, much like DVD sales did, Spotify will be grow as one of the main outlets to reach customers for the record labels. If they can swing it they could become a major label themselves, like Netflix has with films and television.
- scarface74 8y ago
  And Netflix also will have the same problem. Streaming will just be a feature for a company like Disney. By the time a Marvel movie for instance gets to streaming, its already made hundreds of millions of dollars from theatrical releases, dvd sales, VOD, etc. The streaming service doesn’t have to be self sustaining. Netflix is also struggling under a heavy debt load and is still not consistently profitable. If any of the major record labels leave Spotify - they are toast. Especially if all four labels stay on a competing service. People are okay with getting thier movies - that they will probably only watch once from different places. No one wants to have multiple playlists from different services. The music industry already tried that. Before the days of iTunes there were two subscription streaming services - MusicNet and PressPlay. Each had two of the major labels. That failed miserably. If an artist is exclusively on Spotify, they’ve lost exposure to much of the more affluent users who have iPhones and are more invested in the Apple ecosystem.
  - deleted 8y ago
    [deleted]