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I wish it could be that way, but the content providers started to jack up their prices and withhold certain content a long time before Netflix started their own

I wish it could be that way, but the content providers started to jack up their prices and withhold certain content a long time before Netflix started their own content factory. Hulu, owned by one of the largest content providers out there, was the turning point. In retrospect it might have been a good time for government to step in and declare that content providers and streaming services must be separate for the good of consumers. Interestingly, the same thing almost happened with Spotify, but most artists eventually came back instead of defecting to other services. I know there are some exclusive artists on each platform, but we've somehow dodged that same bullet with music streaming. Maybe because there are 3-4 relatively popular services, and artists have a little more sway over their distribution? Of course, Spotify is currently commiting this same sin in the podcast space so it's not like their hands are clean.

dopeboy 4y ago
This is a huge point that I bet there will be many business case studies around: why didn't what happened to Netflix happen to Spotify? I thought Tidal was going to be that. Remember their first promo video [0]? Full of A listers pretty much declaring that they're making an artist collective? It had every reason to occur...except it didn't. Why? [0] - https://www.youtube.com/watch?v=cYYGdcLbFkw https://www.youtube.com/watch?v=cYYGdcLbFkw
- mongol 4y ago
  Was it not that Spotify let record companies in on ownership, making it a joint venture of sorts?
- PaulDavisThe1st 4y ago
  Reason #1: if your work is still available on a cheaper, bigger platform, people are not likely to switch to the the more expensive, smaller platform. If your old work is still available on the cheaper+bigger platform, but the new work is only on the more expensive+smaller platform, maybe the true fans will switch, but A-listers don't make money just from the true fans.
  - dopeboy 4y ago
    It is my understanding - and correct me if I'm wrong - that a-listers have the leverage to move their entire catalogue over if they wish. Could they have, en masse, done this over to Tidal? Would that have broke Spotify?
- scarface74 4y ago
  Spotify is not exactly a shining beacon on the hill for a successful company. They aren’t profitable and they are total beholden to the record labels. They are forced to give 70% of their revenue to record labels. Their fixed cost go up in lockstep with their revenue - not exactly the model of a successful tech company. Netflix paid a fixed amount to license content and then could spread that cost as it gained customers. It’s the same with their own content. They never have to pay the content producers again for the content they fund.
  - kmeisthax 4y ago
    ...until Netflix's licensing agreements expire, which they do regularly. Then the networks demand twice as much money and they have to either keep growing to outpace the cost of licensing or jack up subscription fees, or both.
    - scarface74 4y ago
      Or they “become HBO before HBO becomes them”. That was the entire reason for them doing their own content.
  - dopeboy 4y ago
    I would argue they are in a much more stable position vs Netflix. They are the one stop shop for every kind of audio. Retention will be the true barometer here.
    - scarface74 4y ago
      How is a company that is not profitable and will never make more than a 30% gross margin on a customer in a more stable position? They are also suffering from the “DropBox problem”. Streaming music is not a product. It’s a feature. Their largest competitors don’t have to make money on streaming music. Streaming music for Apple and Amazon are just features to sell hardware.
      - dopeboy 4y ago

dopeboy 4y ago

This is a huge point that I bet there will be many business case studies around: why didn't what happened to Netflix happen to Spotify? I thought Tidal was going to be that. Remember their first promo video [0]? Full of A listers pretty much declaring that they're making an artist collective? It had every reason to occur...except it didn't. Why? [0] - https://www.youtube.com/watch?v=cYYGdcLbFkw https://www.youtube.com/watch?v=cYYGdcLbFkw

mongol 4y ago
Was it not that Spotify let record companies in on ownership, making it a joint venture of sorts?
PaulDavisThe1st 4y ago
Reason #1: if your work is still available on a cheaper, bigger platform, people are not likely to switch to the the more expensive, smaller platform. If your old work is still available on the cheaper+bigger platform, but the new work is only on the more expensive+smaller platform, maybe the true fans will switch, but A-listers don't make money just from the true fans.
- dopeboy 4y ago
  It is my understanding - and correct me if I'm wrong - that a-listers have the leverage to move their entire catalogue over if they wish. Could they have, en masse, done this over to Tidal? Would that have broke Spotify?
scarface74 4y ago
Spotify is not exactly a shining beacon on the hill for a successful company. They aren’t profitable and they are total beholden to the record labels. They are forced to give 70% of their revenue to record labels. Their fixed cost go up in lockstep with their revenue - not exactly the model of a successful tech company. Netflix paid a fixed amount to license content and then could spread that cost as it gained customers. It’s the same with their own content. They never have to pay the content producers again for the content they fund.
- kmeisthax 4y ago
  ...until Netflix's licensing agreements expire, which they do regularly. Then the networks demand twice as much money and they have to either keep growing to outpace the cost of licensing or jack up subscription fees, or both.
  - scarface74 4y ago
    Or they “become HBO before HBO becomes them”. That was the entire reason for them doing their own content.
- dopeboy 4y ago
  I would argue they are in a much more stable position vs Netflix. They are the one stop shop for every kind of audio. Retention will be the true barometer here.
  - scarface74 4y ago
    How is a company that is not profitable and will never make more than a 30% gross margin on a customer in a more stable position? They are also suffering from the “DropBox problem”. Streaming music is not a product. It’s a feature. Their largest competitors don’t have to make money on streaming music. Streaming music for Apple and Amazon are just features to sell hardware.
    - dopeboy 4y ago