Spotify Losses, 2008-2012: $206 Million…

Spotify’s losses since the company started now top $206 million, according to financial filings (including recently-filed 2012 documents).  According to Crunchbase, the company has raised a cumulative $288 million, which means this is a company close to burning through its available cash.

 

unsustainable

Here’s a quick look at Spotify financials over the past three years, which now includes statements from 2012.

spotifyrevenues2012

spotifylicensing2012

spotifysubscribergrowth3

 

spotifylosses2012

86 Responses

  1. Yves Villeneuve
    Yves Villeneuve

    Scaling has actually made losses greater. What do you propose to make Spotify profitable? It can’t control ad revenues or bandwidth costs so what else?

    Reply
    • Yves Villeneuve
      Yves Villeneuve

      On a very important note, how many bundle deals was Spotify newly involved in 2012 that would reduce losses as a percentage of revenue?
      Bundles are used to con consumers into subscribing to a so-called free Premium subscription where 90% of them will never use it, therefore zero costs incurred by Spotify.

      Reply
      • Visitor
        Visitor

        My cable company is really conning me into getting all these channels I never use. The cable companies are truly doomed since that’s where all their profits come from.

        Reply
        • Casey
          Casey

          Hardly. Cable TV is but one of their products and becoming less important with every passing day. Internet access is rapidly becoming their future and should cable TV fail them, they have but to simply raise the price of their internet services.

          Reply
          • Big Swifty
            Big Swifty

            Will competition for customers attention drive the value of cable tv so far down that they will finally offer the long suffering cable consumer ala carte channel choices? or will cable companies give up the cable business all together?

          • jw
            jw

            There will never be cable with a la carte pricing (or Netflix or Hulu or SiriusXM, etc.). It’s just going to transform from a service fee to a content fee. As tvs become increasingly web enabled (esp w/ products like the $35 Google Chromecast hitting the market), the difference between something like Comcast’s online on demand/streaming channels & what you pull up on your tv will become indistinguishable. You’ll just pay a consolidated service fee as internet access, & you’ll be watching “internet tv” via your tv. Granted, since providers like Comcast went all digital a few years back, that’s basically what you’ve been doing all along, just paying extra for it.
            Cable is & will be for the foreseeable future the average person’s source for video content. As well as funnyordie.com or collegehumor.com have done, they’re better off with a 30 minute show on Comedy Central or mtv. And Vice is going to reach more people with an HBO show. It doesn’t make business sense for a cable network to try to make it on it’s own, & it doesn’t make business sense for a cable provider to offer a la carte subscriptions.
            Look at what a la carte has done to the music industry. Tanked it.

  2. Visitor
    Visitor

    Losses as a % of revenue down significantly. Looks like a solid curve for a massively growing tech company… assuming they can keep up the pace, and convert more of the lower-end users to subscriptions.

    Reply
    • Yves Villeneuve
      Yves Villeneuve

      I am sure you are able to divide 6 million paying subscribers into 80 million registered users. Maybe only 25% of payers are non-bundle Premium subscribers. Spotify won’t tell you these things. Keep drinking the kool-aid.

      Reply
    • Paul Resnikoff
      Paul Resnikoff

      Even the cheerleading analysts concede that something needs to change here, in the form of greater paying subscribers (2X, 3X, etc.), lower licensing fees, etc. So this is more an analysis of the situation right now; the nature of successful ventures is that they change stuff in response to critical problems.
      But one very substantial issue here is the variable nature of the cost structure: Spotify isn’t purchasing bricks and building buildings; the suppliers of their critical content can fold their arms at any moment, wildly increase their costs (‘overnight’), or, worse, determine their cost structures based on the available capital that Spotify can offer.
      But, just make sure to keep the patient alive.

      Reply
      • jw
        jw

        The labels aren’t going to do anything to hurt Spotify. The labels aren’t the ones complaining. That’s tantamount to saying, “Well the tire industry could charge more for their tires overnight & Ford would be up creek shit without a paddle.” The truth is the tire industry would be, too, & it’s the same with Spotify & the labels. The labels need Spotify as much as Spotify needs them.
        Asking consumers to pay more than $120 per year for access to recorded music is INSANE. That’s not going to happen. No way, no how. You’d need consumers who would pay that, &… the going rate for music just isn’t that high, & even as great as Spotify is, the feature set don’t justify more than $120/mo, not now, & perhaps not any time soon.
        The change that needs to happen is fewer ad-supported streamers, more subscription streamers. And until it makes sense for Spotify to slash the privileges of ad-supported streamers, it’s probably easier for them to raise more capital than to renegotiate their deals with the labels.
        I wouldn’t bet on Spotify going anywhere any time soon.

        Reply
        • Casey
          Casey

          Everyone seems to be forgetting that the free service costs more to run than the ads pay, and therefore once restricted will lessen their losses. It will also drive an instant increase in subscriptions. If Spotify would cap free listening at 20 hours per month in all territories, they would almost certainly be profitable or very close to it.

          Reply
          • HansH
            HansH

            For the record. Free listening is capped to 10 hours per month in most countries. The US is still an exception probably because Spotify isn’t really catching on there.

          • Casey
            Casey

            Indeed. US and a couple others. However it is incorrect to assume spotify is not catching on in the US. It has, but not to their expectations nor for paying subscribers. If they would cap US listening to 20 hours (10 later) they would almost certainly gain 1 million subscribers in that month while chasing awhile users who will never subscribe and therefore just cost them money.

          • Tune Hunter
            Tune Hunter

            US has XM and US has greatest terrestrial radio offering on Earth – no need to be a robot puching Spotify.
            In Europe if you are not in one of the new born Eastern European countries you are in the music desert – air waives are full of nothing!

          • jw
            jw

            Obviously you’ve never listened to u.s. terrestrial radio. lmao.
            No need for Spotify, there’s RADIO! Ridiculous.
            You’re not from the U.S., are you, Tune Hunter? And if not, have you ever been to the U.S.? And if not, how do you assume to have any clue about U.S. consumer behavior or consumer needs? Or about the true nature of the products available to U.S. consumers?

          • Tune Hunter
            Tune Hunter

            I am here in the Land of Free. (not in jail yet!)
            Just buy a ticket and land in Rome or Frankfurt, then rent a car and turn on the radio – you will find nothing.
            Radio in the US is relatively good and Americans are more human and less techno-robots. So it is less fertile ground for Spotify.

          • Tune Hunter
            Tune Hunter

            XM in good car is brilliant!
            The problem we got is lost Shazams and to much data on radio display – just twink with those two issues and you will double the industry in 36 months. 100% guarantee!

          • jw
            jw

            Dude, radio sucks pretty much everywhere. Unless you live in Memphis.
            Radio, as it’s been for the last little bit, is a pretty bogus concept. Unless you want to listen to top 40, pop country, rap, or r&b, there’s generally nothing there for you. What if you’re a Vampire Weekend fan who lives in Oklahoma? What if you’re a soul music fan who lives in Oregon? What if you’re a fan of traditional country music who lives in any state other than Texas? What if you’re a metal fan who lives in Hawaii? Do you think Hawaii has a great heavy metal station?
            The internet fixes that problem, & a thousand other problems with radio. Maybe it makes you happy, but if it’s not NPR or sports radio, I’m not touching it with a ten foot pole. And that’s a common sentiment.

          • Tune Hunter
            Tune Hunter

            Your arguments might have some merit.
            Considering that recent Nielsen still assigns over 70% of music discovery to radio if we want money we have to go my way!
            Second stage of my Discovery Moment Monetization converts radio to a music store (yes! store getting real cash for music folks discovered from specific station)
            It will improve the playlists, no more same crap over and over, creative radio DJ will be placing in the air best targets he can find and folks will want to catch them with Shazam for just 49 cents and add it to their own music library or Spotify plylist!

          • jw
            jw

            Radio stations don’t give a shit about music sales. DJs aren’t going to play new music just for people to discover in hopes of making sells, even if had the power to do that. Radio playlists, at least the ones you’re talking about when you say 70%, are focus grouped with the intent of retaining ears to maximize ad revenue. That means playlists are designed to have the bare minimum amount of appeal without being potentially offensive. Consider the following scenario…
            Song A is Person A’s favorite new song… it’s etherial & moody. Song B is Person B’s favorite new song, it’s a pretty heavy rock & roll song with a hard groove. Person A would purchase Song A if he/she heard it on the radio, but would change the station if he/she heard Song B, & vice versa. Song C is a throwback electronic song with r&b overtones… it’s neither Person A or Person B’s favorite song, but it’s not offensive enough to make either of them change the station. Therefore Song C would command twice the ad dollars in this scenario, making it the song that gets pushed.
            In the internet age, there’s no reason that music discovery should be beholden to advertisers.
            The reality of the situation is this… the number of people who actually buy music is a very small subset of the people who listen to the radio. Just compare the numbers. And so of course most of the people who don’t even buy music are only discovering new music through the internet because music is only something they only experience passively. Maybe they buy the Beyonce record when it comes out or whatever. Maybe Justin Timberlake. And maybe they could be better monetized. But there is a relatively small number of fans in that 30% who discover music elsewhere & probably spend much more on music (perhaps they’re spending $120 per year versus someone who maybe only springs for the new Beyonce record) & they’re just not served by traditional radio anymore. Maybe there’s no station that plays the format they’re interested in, or maybe the playlists are just too shallow. Those people NEED a service like Spotify. You acting like these people are supposed to get their new music from radio is, at best, comical.
            And I’m sick of commentors acting like $120 isn’t a lot to pay for music. The music industry should have the utmost respect for any consumer paying $120/yr for music, even if it is subsedizing free listening, & though that means it’s spread out over a lot of plays, it doesn’t change the fact that all of that money is still going to the music industry. That gets lost in these debates, & it’s bullshit.

        • Visitor
          Visitor

          “The labels aren’t the ones complaining”
          That can change any day. Artist not only leave Spotify — they also stay away from the labels.
          And the labels are in the same predicament as Spotify:
          They’ll die without artists!
          Sure, they still have their old gold, while Spotify can be gone tomorrow, but they do need new talent if they want to be around in the future. And any hidden synonym for ‘streaming’ in the deal is rapidly becoming a major turn-off for a growing number of independent artists. Who wants to give their music away for an extremely low percentage of $.005 per stream?
          Labels don’t have anything to offer today except loans and distribution. And artists can get both cheaper elsewhere — without losing their rights.

          Reply
          • jw
            jw

            Labels aren’t contractually obligating artists to stay on Spotify. They may encourage artists to have their catalog on Spotify, but I’ve only heard labels say “if you want to pull out of Spotify, if you want to renegotiate with Spotify, if you want to window your releases, you’re welcome to do so.” But the labels don’t have skin in the game outside of promotion, they get paid either way (the labels who have individual agreements with Spotify, at least).
            The whole “artists are going to stay away from labels” thing is a straw man. The labels aren’t complaining, & that’s not in danger of changing “any day.” Scare tactic. Total bullshit.

        • Frank Biederer
          Frank Biederer

          No I would think that the labels would not be inclined to do anything to hurt spotify. Are they not a MAJOR investor in Spotify?
          In fact why is no one talking about the conflict of interest that occurs when a label can make money as part owner of a service that sells advertising space, using content that they control and can license away (their catalog) at a fraction of what they traditionally have licensed their products for. Are they not in a situation now where the record label can make money (through ad revenue generated on spotify) even though the artists they “represent” make mostly nothing? Hello…… The fox is guarding the hen house here. It’s like politicians negotiating long term deals bad for the taxpayers with public unions in exchange for political contributions and votes that get them elected tomorrow, with the taxpayers on the hook for the goodies later (which is what has brought us the pension fund fiasco that is bringing down cities and states) but their will be no taxpayer bailout for the artists signed to these record labels…

          Reply
          • jw
            jw

            The way I understand it, the labels get paid by Spotify for what amounts to unguaranteed access to the catalog. The artists can still say no. I haven’t heard of a case where a label told an artist that they can’t remove their music from Spotify, can’t negotiate an individual deal with Spotify, or can’t window their release on Spotify. The label (supposing they have an individual agreement with Spotify &, as you suggest, share of ownership) gets paid either way, so it’s no big deal to them outside of simply promoting the artist. (Perhaps stating it that way isn’t giving the per-stream payouts major labels are receiving from Spotify their due, but they certainly aren’t the deciding factor.)
            So as long as the labels aren’t forcing artists to be on the service, there aren’t cases where labels are acting on their own behalf against the best interest of the artist, outside of the fees/ownership they’re getting from Spotify, which is money that ought to be, in my opinion, paid out per-stream to artists, & labels should be collecting the percentage negotiated in their contractual agreement with the artists.

      • HansH
        HansH

        “Even the cheerleading analysts”
        Names and numbers please, Paul. And what about your own analysis? Where is it? Can’t be just ‘Oh I see a growing loss so the Spotify is doomed?’. That’s more like a Pavlov thing

        Reply
        • Paul Resnikoff
          Paul Resnikoff

          OK, challenge accepted: here’s a report released just a few hours ago by ABI Research. Just glancing at the press release:
          Senior analyst Aapo Markkanen: “The past two years have seen a remarkable international expansion of streaming as a distribution model, but in terms of its long-term potential we’re still only scratching the surface.”
          Then, two paragraphs later…
          “As regards the streaming providers’ competitive landscape, ABI Research anticipates some level of consolidation to take place once the current land grab stage starts slowing down. Streaming is a high-volume, low-margin industry, so to become and stay profitable the providers need scale.”
          But let me see if I can get the full report and dig in further.
          Your turn.

          Reply
          • HansH
            HansH

            “Streaming is a high-volume, low-margin industry, so to become and stay profitable the providers need scale”
            Sounds like the opposite of your conclusion.
            I personally don’t trust these companies selling big reports for big money. That’s my problem, I know…;)
            Spotify and it’s investors know what they are doing I hope. They have their own financial analysts I take it.
            Only time will tell who’s right. Could be you, who knows.

          • Paul Resnikoff
            Paul Resnikoff

            I talked to ABI and Markkanen, they won’t be distributing the report outside of their private clientele. So, bummer for me and everyone reading DMN, but they set the rules and they worked hard on the report. Maybe they’ll give me an exhibit to display, who knows.
            But, let me translate from the top-level conclusion/release, which came out this morning:
            Statement: “The past two years have seen a remarkable international expansion of streaming as a distribution model, but in terms of its long-term potential we’re still only scratching the surface.”
            Translation: Classic, blue-sky statement about music streaming. ie, bullish, cheerleading, extremely optimistic (and, probably right in many respects, misdialed in others).
            Moving on…
            Statement: “As regards the streaming providers’ competitive landscape, ABI Research anticipates some level of consolidation to take place once the current land grab stage starts slowing down. Streaming is a high-volume, low-margin industry, so to become and stay profitable the providers need scale.”
            Translation: What Markkanen is saying is that this is a space that is over-saturated, over-leveraged, and over-invested, and that over-expansion will lead to forced exits (which are the bad kind), buyouts, and a shrinkage of players on the field (typical in early-stage, high-growth, speculative markets).
            Spotify will likely survive this first round. But there’s a much longer fight ahead (which Markkanen also illustrates, with Google and Apple key competitive threats).
            Moving on…
            “High volume, low-margin industry” is not a compliment, it means that companies like Spotify (and the new, smaller subset of ‘winners’) will have to achieve massive levels of scale to attain any level of profitability.
            So, $260 million later Spotify has 7 million paying subs, 20 million actives. That’s not massive scale.

            So no, this report doesn’t prove the opposite of what I’m arguing.
            Your turn.

          • Econ
            Econ

            I guess I’m just not going to take the word of financial analysts as a substitute for industry analysis. I hear what they’re saying about scale, I just don’t think it makes any sense beyond pure finance.
            I’ve been streaming music over the web since 1998, back when the best I could get was AM-quality sound on a 33.6k modem. It’s been 15 years and we’re only now getting to the network bandwidth point where people can stream CD-quality on their phones. Back-end server capacity is also a technological hurdle that is becoming overcome gradually.
            This leads me two 2 points:
            1) Technological progress in this space is slower than the people selling the services want you to believe. Spotify management et al want to think that the adoption of streaming will be as swift as the adoption of DVD over VHS. This is simply not the case. While I have no doubt that streaming IS the long-term techology of choice for music and video consumption, the adoption will be generational and gradual. I’m thinking 15 more years until streaming is at 33% penetration. But the major labels (and enough artists) are so leveraged they will listen to anyone selling a get-rich-quick scheme.
            2) Technology is advancing slowly but licensing is moving in the opposite direction. Publishing is splintering so one has to deal with more than just ASCAP/BMI now for songwriters, and mechanicals are splitting into even finer pieces – Instead of dealing with 8-10 labels it’s getting to the point where the services have to deal on a title-by-title basis for the recordings. The occasional short exclusivity deal is one thing, but making it SOP is more overhead than smaller operators can handle. And the idea that there will be an oligopoly of streaming providers should frighten any artist/songwriter as the oligopoly will have too much control. The opposite approach – getting as many small streaming operators in the game as possible (ad-supported or subscription) is going to require the muisc insutry as a whole to cooperate on a one-stop shop approach to licensing. The only way I see that happening is for the dinosaurs blocking progress to die off.

          • jw
            jw

            I agree about technological progress in the space, however I think Spotify is an exception. While there are still hurdles to streaming content at scale from a centralized server, Spotify utilizes a peer-to-peer system to assist in content distribution. p2p technology has been outpacing any distribution technology over the last decade (in part as a reaction to the hurdles of centralized distribution), leveraging consumer bandwidth, which has also been growing rapidly (Comcast doubled their plans earlier this year, & Google Fiber is going to blow Comcast out of the water).
            Of course this only applies to their desktop app, & not the mobile- or web-based products, but I’m optimistic that technical capabilities of distribution will grow on pace with the demand for those products. I don’t see cellular broadband growth outpacing streaming tech, which means that, regarding mobile streaming demand, Spotify’s got a bit of a runway.
            I think 15 years to 33% penetration is overly conservative. At the current rate of growth that may be true, but there are plenty of outside factors that should positively affect growth: device cycles (each time a consumer gets a new phone, computer, tablet, etc, they’re less likely to move their whole music collection to a new device), new formats (iTunes is resistent to upgrading the quality of their downloads because it kills the “sheen” of everyone’s expensive, lower-fidelity m4a collections. They have to position it as a new product, like iTunes Plus, & can only go to that well once in a blue moon. They’re using iCloud & their Match system to combat this, but that means consumers have to sign up for that product to benefit. Spotify, on the other hand, can & does upgrade fidelity at will, which means they will probably offer full fidelity streaming before iTunes will launch a lossless product in their store), & potentially partnerships (like Coca-Cola) could have a big impact.
            Re: the streaming oligopoly, I think a streaming product will have faster penetration than streaming as a concept… if the industry wasn’t overlegeraved the way it is, if it were a perfect world I would agree with you, but I think the early years will rely on an oligopoly for the concept to take hold. I’d use Netflix as an example.

          • HansH
            HansH

            You are the expert in translating Paul. So I’ll pass.
            Like I said before, only time will tell.

          • Tune Hunter
            Tune Hunter

            Hans you and streaming operators are dreamers working with very desperate partners.
            It is hopeless for owners and in normal times nobody would give streaming man a minute of his time.
            So, even if they get 200 million subs at 10 each it will make only 24 billion dollars. I can assure you it will never get to that point and at 100 millions iTune and all other monetization sources will be gone.

            24 billion is exactly 60% of 1999 – they are just Trojan horse killing 100 billions of music goodwill with participation of labels.
            I

          • Visitor
            Visitor

            ” all other monetization sources will be gone”
            Come on get real. There will always be more sources than just streaming.

          • Tune Hunter
            Tune Hunter

            OK agree, US might have better survival of other income sources.
            in the meantime in Sweden Sptify is doing 91% of digital revenues today and they need at least two years to convert it to total streaming Nirvana.

      • Visitor
        Visitor

        Yes, I mentioned they absolutely need to continue converting. Something to keep in mind on the variable cost licensing is that the initial users are more likely to be the high volume users–the ones that are driving the licensing costs. As you know, even that cost per user is variable based on how much music they’re consuming. As the service matures, Spotify converts more and more of the mid-to-low volume consumers, thus driving down the licensing cost per user. Same is true with those bundling deals–breakage drives down the licensing cost per user.
        Clearly, they need to continue growing and converting signiticantly more users. But if we look at Spotify’s progress in Europe, the subscriber rate got significantly better around the 2.5-3 year point from launch. If we see the same thing in the US, and that rate accelerates in the first half of 2014, we could see a lot of skeptical minds changing on Spotify very quickly.
        All that said, the goal for Spotify has never been just 2x, 3x their current subscriber number. Let’s say (maybe optimistically) over the next half decade they can hit half the Netflix subscriber number in the US alone–that’s 10x their current number of subscribers in the States, with the usage patterns driving down their average licensing cost per user. The numbers work if the service can truly scale. If they can’t, it won’t. If it does work, the revenue for labels and artists could easily surpass what they’re currently seeing from iTunes. If it doesn’t, we’re probably looking at Youtube and their near-Pandora rates from here on out. And that’s a much worse scenario for everybody.

        Reply
      • Visitor
        Visitor

        Also, please let us know the next time Amazon posts a profit. Or even tries to. Are they huge failures?

        Reply
      • Visitor
        Visitor

        “the nature of successful ventures is that they change stuff in response to critical problems”
        Unfortunately, there’s isn’t much to do.
        Spotify faces two huge problems, either one could kill it:
        1) Inconvenience. Compare to YouTube: You never have to register, login, pay, download or install anything — just enjoy!
        2) No video. Video is the future.

        Reply
  3. Visitor
    Visitor

    Yeah let’s start with your subjective conclusion without any explanation. That’s the way to write brilliant articles.
    Revenues doubled. Losses went up 32%. That’s not that bad for an expanding company.

    Reply
  4. Jaded Industry Dude
    Jaded Industry Dude

    Life After Spotify? Nah. Not gonna happen. Losses or not, they will be bailed out and continue business as planned.

    But with that said, it’s very possible that iTunes will somehow kill the Spotify model. That’s the big issue here; the model is here to stay, and it’s just a matter of time before iTunes plays the same game as Spotify.

    Reply
      • Econ
        Econ

        Not so fast. ITunes streaming is going to require paying for their cloud service. $25 annually WITH ads.

        Reply
    • Visitor
      Visitor

      “it’s just a matter of time before iTunes plays the same game as Spotify”
      No, iTunes Radio has a specific purpose. (Aside from being a radio, as opposed to on-demand.)
      Can you guess what it is? 🙂

      Reply
      • King of Convenience
        King of Convenience

        Yeah but it’s not gonna work. Buying downloads is not convenient. The artists may want this to happen, but consumers like streaming better.
        And don’t tell me that artists will leave streaming services. That’s not gonna happen either.

        Reply
        • Visitor
          Visitor

          “don’t tell me that artists will leave streaming services. That’s not gonna happen”
          It isn’t? Wow man, thanks, that’s absolutely awesome!
          First good news in this annus horribilis for the streaming industry.
          Best,
          D. Ek

          Reply
  5. Paul Martin
    Paul Martin

    These figures are used by Spotify to drive down artists royalties even further, ’till they pay nothing at all for their resources. Artists are leaving in droves, so where is Spotify and the like going to get their material from in the future…they certainly haven’t got any products of their own to sell. Hope they all go down the pan sooner rather than later

    Reply
    • Visitor
      Visitor

      “where is Spotify and the like going to get their material from in the future…they certainly haven’t got any products of their own to sell”
      They could sell t-shirts.

      Reply
  6. Good
    Good

    Spotify should pay even more royalties to labels/artists. 70% is too low.
    That way Spotify can never be profitable and will go bankcrupt.

    Reply
  7. Jeroen
    Jeroen

    Please check out these 2 articles on Spotify that recently appeared on Billboard. http://www.billboard.com/biz/articles/5070561/spotifys-financial-viability-and-pernicious-fallacies-op-ed http://www.billboard.com/biz/articles/news/digital-and-mobile/5337666/business-matters-spotifys-2012-revenues-more-than
    I like the debate on streaming but I am actually wondering about the relevance of DMN if the only thing it does is bashing and giving one sided point of views on this subject. Is DMN a lobby group?
    Come on Paul you must have read these articles. Why dont you mention these? You give Thom York’s point of view. You should at least also give some attention to David Macias to keep some sort of credibility and add to the debate.
    I really hope you do or DMN will become irrelevant and will only preach for its own church

    Reply
  8. Aleks
    Aleks

    Posts like this just show how little people know about finance.
    Spotify raised millions for the specific purpose of losing money for many years to come. This was planned.
    Companies can do this for a long time as long as investors are willing to foot the be. Case in point – Amazon. Grows revenues but keeps posting losses.
    On top of that – revenue here doubled, while the rate of loss shrunk considerably. Which does in fact prove that scale will lead to profits.
    The real question is can Spotify scale fast enough?

    Reply
  9. Billboard
    Billboard

    Spotify is projected to do $850 million in revenue in 2013
    2012: $577 mil
    2013: $850 mil
    Look like its growth is slowing down.
    Source: Billboard

    Reply
    • Tune Hunter
      Tune Hunter

      I am not impressed 577 or 850, they are cancer of the industry shrinking 100 billions of no brain goodwill to less than 20!

      Reply
  10. Tune Hunter
    Tune Hunter

    Streaming is a monster Trojan Horse already inside of Music House!
    Thank you Mr. Ek for your brilliant sales job and brainwashing of Mr. Keeling.
    We need to restart production of DDT and hope for good genetical mutation or just extermination of streaming!
    200 million paid subscriptions @$7/month can deliver only 17 billion in global sales. Streaming will never get to this point. If they go just over 100 million paid guys there will be no iTunes and not much of anything.

    Reply
  11. GGG
    GGG

    This comment section has restored my faith in the DMN readership. I’m glad some people realize operating a massive company with hundreds of millions invested into it is not the same as operating a lemonade stand. The rest of you should read a book.

    Reply
      • GGG
        GGG

        Sorry, forgot Spotify is the only company in the known universe that operates from a licensing standpoint and/or sells a service.

        Reply
        • Visitor
          Visitor

          “Sorry, forgot Spotify is the only company in the known universe that operates from a licensing standpoint and/or sells a service”
          No, you forgot that Spotify is turning into a lemonade stand without lemonade.
          Licensed, or otherwise.

          Reply
          • GGG
            GGG

            Ah, the artists are leaving in droves mantra again. Ok, Thom Yorke abandoned ship, who else?

          • Visitor
            Visitor

            The argument is pointless
            The majority of artists don’t have a choice. The recording company owns the rights. It is only the old veteran pros, true indepents and other lucky few that can decide to opt out of spotify.
            The rest have no say in what the label does

          • GGG
            GGG

            Then stop bringing up that argument all the time. Not my fault it’s pointless.

  12. Big Swifty
    Big Swifty

    Streaming is the future of music distribution.
    However a streaming service that is everything to everyone is not a sustainable business model.
    They need to ditch the free service then sink or swim.

    Reply
    • Visitor
      Visitor

      “Streaming is the future of music distribution”
      Yeah, it sure looked that way a few years ago.
      But that was then, as they say…

      Reply
    • GGG
      GGG

      Pretty sure that’s the idea. Like someone pointed out above, I think, there is an x-hour cap to listening for free in most countries. It’s just not in the US yet because they want a shitload more people trying it first before it becomes paid only.

      Reply
      • Big Swifty
        Big Swifty

        Their “build it and they will come” approach to marketing has failed.
        Their first foray into paid marketing in the U.S. was less than successful.
        They had better find a marketing company soon that knows how to sell a company that sells a product to consumers who with very little effort can obtain that product elsewhere for free.

        Reply
  13. FarePlay
    FarePlay

    As long as pundits like JW keep saying that there is no way people will spend $120 a year for all the music they want to consume, the more it reinforces the perception that music has no value.
    People will pay for what they percieve is value, especially if it is something they want. Look at how many poverty level people are carrying iPhone 5s, kids too broke to pay for music buying expensive energy drinks and showing off their beats head phones, the lines at Starbucks.
    I find it the highest form of greed that the digerati spend so much time saying no way and wanting the musicians and songwriters to bend to their will, instead of promoting the value of music and I don’t mean convenience and accessability; that’s meant for fast food not art.
    It is the free service that is killing Spotify, the more subscribers, which their investors look to as “potential”, the mowre their debt spirals out of control.
    Grow up, get a business plan that works, not one at the expense of creators.

    Reply
    • Big Swifty
      Big Swifty

      Fast food is where the money is.
      Investors don’t want to hear anything about “promoting the value of music.” They want to hear about how to sell music to those kids standing in the starbucks line with an iphone 5 in hand aand beats headphone on head.
      I am guessing that the investors are most intersted in the under 25 market. They are the future mass consumers. Each one of them knows how to obtain music for free.
      spotify will never appeal to that market.
      spotify can survive by marketing itself to music consumers concerned about the “value” of music, dedicated fans of at least 3 or more different genres of music, probably 25 years or older.
      Unfortunately, that’s not where the “BIG” money is.
      spotify has to do some reconsideration of their core customers and start catering, pandering and marketing

      Reply
    • jw
      jw

      Is this a joke response? Sounds like it.
      Lemme ‘splain a few things, FarePlay. A Spotify subscription is not paying for music. It’s paying for ACCESS to music. I pay for music all of the time. I buy vinyl regularly. I recently paid a good chunk of change for the 52-cd ABC of the Blues collection (even came with a little Hohner harp). That’s buying music. Which has certain value.
      Paying for a Spotify subscription is completely different. The month you stop paying you’ve got nothing. Zilch. $120/yr is a lot for ACCESS, which is, by definition, only a portion of the value of a particular piece of music.
      The value of Spotify is not the size of the catalog. No one is listening to 20 million songs in a month. In fact, most people probably aren’t listening to much more music than they otherwise would be. And, truth be told, a whole heck of a lot of what gets listened to on Spotify is stuff PEOPLE ALREADY OWN. I have every Tom Petty record (and the first Wilbury’s record) on vinyl. I have every Tom Petty record on mp3. I have the Mudcrutch record on cd. And yet I’m listening to Mojo right now on Spotify. What is the value of that access? A billion dollars? Should I be paying a billion dollars to listen to music I’ve already paid for multiple times? Would that make you happy? If it’s more than $120/yr, I might as well just carry around an external hard drive with all of my music on it.
      And how many “poverty level people” have you ACTUALLY WITNESSED carrying around an iPhone 5s? And did you actually ask him/her to verify his/her monthly houshold income? That sounds like a load of racist bullshit to me.
      When did the average music consumer EVER pay $120/year for recorded music? lol. Do you just not want to meet the average consumer where he/she is at with the product he/she desires? Spotify isn’t trying to be a “premium” product (in the sense that it costs more than the average fan has budgeted for recorded music). It’s a mass appeal product, & has to be priced accordingly.
      You just don’t understand what streaming is all about, FarePlay. You don’t understand the market forces. And it’s becoming completely obvious that you don’t know the first thing about the average music consumer.

      Reply
    • Econ
      Econ

      I think that people are just pointing out the artists can set any price they want but they can’t set “value” at all. Only the end user can do that. You may not like that the bulk of the end users (the consumers) don’t find $120 a year a good value, but telling the customers they don’t know how to value properly is just foolish.

      Reply
  14. Fancy Scarves

    Hi there! This is kind of off topic but I need some help from an established blog. Is it very hard to set up your own blog? I’m not very techincal but I can figure things out pretty quick. I’m thinking about creating my own but I’m not sure where to start. Do you have any ideas or suggestions? Many thanks
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    Reply
  15. Touchscreen Gloves

    The things i have seen in terms of pc memory is always that there are specs such as SDRAM, DDR and so forth, that must match up the features of the motherboard. If the pc’s motherboard is very current while there are no main system issues, upgrading the memory space literally normally requires under a couple of hours. It’s among the easiest pc upgrade treatments one can visualize. Thanks for expressing your ideas.
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    Reply
  16. Oven Gloves

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    Reply

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