7 ms·
Spotify raises $526M at a $8.5B valuation
- djf1 11y agoI notice in the article that Coca Cola is an investor. Anyone care to explain why Coca Cola would make such an investment? I assume it's because they're sitting on a bunch of extra cash; but wouldn't it be more efficient to distribute that cash to their shareholders?
- justincormack 11y agoThey have at various times done music promotions and own label streaming services and deals with Spotify.[1] [1] http://www.coca-colacompany.com/coca-cola-music/every-song-has-a-place-coca-cola-spotify-launch-groundbreaking-social-music-app http://www.coca-colacompany.com/coca-cola-music/every-song-h...
- neilpeel 11y agoI have a few more details on it (I wrote the linked article) Coca Cola invested $10M back in 2012 as part of a $100M round. I know that before they invested, Coke and Spotify had an existing partnership including integrating Spotify into Coke’s music websites and Facebook page. At the time, the Director of Global Entertainment at Coke said: “Music has always been a huge part of Coke, I think since 2008 or 2009, you've seen us ramp up from the global perspective, and I think Spotify is the next evolution of Coca-Cola music. It's going to be interesting to see how Spotify accelerates our global music strategy, and how the brand can facilitate that conversation where people discover music and share it amongst each other.” (from an article on AdWeek)
- arthurcolle 11y agoLol the post reads as such a joke. "X has been part of Y since inception, we've always had our eyes on broadening the scope of Y to the X-generation. We want to really expand upon our base and help X seek Y in new ways. Thanks, Mike"
- 72deluxe 11y ago"Music has always been a huge part of Coke" This is strange. I thought it was just syrup and bubbles that was a huge part of Coke.
- matthewcford 11y agolike that apple device is just a computer?
- 72deluxe 11y agoIt certainly has no bubbles in it!
- deleted 11y ago[deleted]
- deleted 11y ago[deleted]
- raverbashing 11y agoBig companies often establish hedge funds to invest all their excess money. Example: http://www.businessinsider.com/apple-owns-the-worlds-largest-hedge-fund-2012-10?IR=T http://www.businessinsider.com/apple-owns-the-worlds-largest...
- arthurcolle 11y agoYay Spotify!
- maaaats 11y agoI had to check: I became a paying member of Spotify in 2009. That's a lot of money spent on music I never would have done if not. Before that, I had maybe bought 2-3 albums in my entire life, growing up when piracy was at its peak. At the same time, I think it's weird raising this kind of money so late in the lifetime of the company?
- k-mcgrady 11y ago>> "At the same time, I think it's weird raising this kind of money so late in the lifetime of the company?" They need it to survive as their losses are continuing to grow.
- namenotrequired 11y agoDo you have a source for this?
- cncool 11y ago"However, Spotify recorded an operating loss of €165.1m (£119m) in 2014 compared to €91.2m (£65.7m) in 2013, while its net loss nearly trebled from €55.9m (£40.3m) in 2013 to €162.3m (£117m) in 2014." http://www.theguardian.com/technology/2015/may/11/spotify-financial-results-streaming-music-profitable http://www.theguardian.com/technology/2015/may/11/spotify-fi...
- puranjay 11y agoI fail to see how these companies will ever turn a profit. I can't imagine their market growing exponentially bigger than it already is. I'm an entrepreneur in the non tech domain, and profitability is the first thing we look for, not the last. Somehow, tech companies manage to survive for years without making any profits, which is weird t me
- justincormack 11y agoThey only have 15m paying customers, so if it was a matter of scaling there is a long way to go. Of course they may not be profitable at any scale due to the pricing model of the labels, but thats a different matter.
- antr 11y agoI'm going to give Apple Music a serious try. I've been using Spotify since the very beginning, but I find that music discovery and UX in Spotify are a mess, and for some reason I end listening the same music all the time. I've got the feeling that Apple is going to get discovery right. Time will tell.
- Osmium 11y agoI hope so too. I, too, have been a paying Spotify user for a long time and it just drives me crazy. I tried Rdio too but wasn't a fan. All music catalogs being equal, the bar is set pretty low at the moment. I really want to like Spotify too, because they seem like they're trying hard, but the UI and UX just feel terrible to me.
- kivihiinlane 11y agoAfter downgrading to version 0.9.7.x, all UI/UX problems I had are gone. I'm pretty satisfied with their old client. I've been thinking, that services like spotify could give users way to script their own music discovery. Fiddle with different properties to discover random music or very specific genres. Ability to exclude popular artists, etc.
- LMAlVvQjSGj 11y agoI've used Spotify since 2008. The recent UI change really ruining the experience. I believe they are using Chromium now. Spotify uses 1GB of ram, and every 10 seconds the CPU usage spikes to max. The UI is so unresponsive, Firefox is more responsive while restoring a session of 100 tabs. I no longer pay for Spotify. The free version is litterd with malware ads, on par with SourceForge. They've also remvoed 70% of it's original features. The UX of Spotify has been regressing since 2011.
- 72deluxe 11y agoI have never used Spotify but am I right that a music streaming app uses 1GB of RAM and spikes the CPU??????? I thought iTunes and RealPlayer were bad but this is incomprehensible.
- rplnt 11y agoI use Spotify Free, i.e. with ads and what I find interesting that most (paid) ads are from Universal Music. So they pay for ads so you listen to their content (targets are playlist with crap pop music). Weird.
- jackgavigan 11y agoWhen Spotify's contract with Sony Music leaked, it emerged that, as well as granting Sony a credit for advertising inventory (i.e. free ad impressions), Spotify must "offer a portion of its available unsold ad inventory to Sony Music for free to allow the label to promote its own artists."[1] It's not unreasonable to assume that other labels (like Universal) have a similar deal, so those adverts you're seeing may well be unsold ad inventory that has been given to Universal to promote their own artists. So, I'd question your assumption that Universal is paying for those ads. 1: http://www.theverge.com/2015/5/19/8621581/sony-music-spotify-contract http://www.theverge.com/2015/5/19/8621581/sony-music-spotify...
- rplnt 11y agoI see, that makes more sense, haven't heard about it before.
- pathy 11y agoThey get X million(?) dollars per year of ad spend from Spotify as part of giving Spotify access to their music library. They could of course resell the ad space to external advertisers but may prefer to increase the exposure of their artists.
- digital-rubber 11y agoFor that money they could offer 52.6 million apple music subscriptions to people… Oh wait a minute, that's almost ALL spotify users…
- apapli 11y agoThis is great news for Spotify, but a bit frustrating for me and I am sure plenty of others as individual investors. So many great companies I am passionate about are just too hard to invest in before they go public. And you're in way too late at IPO stage. I keenly start following these types of companies a lot earlier than most of the general public, and I can bet I'm much more emotionally invested into seeing them succeed than a broker in a 100 story building ever will be. I understand their business models and want to give them money to help them grow. SpaceX is one example - all the investment banks have first rights on new issues and even waving a respectable amount at them doesn't help. And it's too difficult to get a feel for whether you are getting a "fair deal" on second market so to me it's not really a viable option even though the service is good in theory. Awesome, and frustrating, at the same time!
- dylanjermiah 11y ago>SpaceX is one example - all the investment banks have first rights on new issues and even waving a respectable amount at them doesn't help. And it's too difficult to get a feel for whether you are getting a "fair deal" on second market so to me it's not really a viable option even though the service is good in theory. Awesome, and frustrating, at the same time! Elon addressed this in the shareholder meeting today/yesterday. https://www.youtube.com/watch?v=Q60FOIV6Ew8 https://www.youtube.com/watch?v=Q60FOIV6Ew8 It's close to the end, during the Q&A.
- saturdaysaint 11y agoIt will be interesting to see how Apple Music affects them. If you listen to a lot of new music, the cost of switching music services is pretty trivial (moving from Rhapsody to Rdio to Spotify has been a minimal hassle for me), and being able to call up any album with Siri is a powerful advantage. Fair or not, this is why Apple could report a vast advantage in map requests over the superior Google Maps. I like Spotify a lot, but they look to have a weaker defensive position than Dropbox or Netflix to me. With minimal switching costs (search is the main interface even if you build up something of a "library") and undifferentiated content, it's really a commodity service.
- hanley 11y agoI've built a large list of artists that I follow in Spotify (so that I get notifications when they release new music), and an even larger list of albums saved to my library so that I can easily browse through music that I like. It seems like it would be a bit of a pain to switch to another provider, but I imagine it would still only take me an hour or two to setup all my follows and saves in another app. I'm eager to try out Apple Music once it comes to Android.
- rrss1122 11y agoYou'll never see Google Play Music or Apple Music trying to raise money like this.