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Spotify Is Now Paying $9.4 Million In Manhattan Rent…

Because there’s no money in recordings anymore, right?

 

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Not if you’re Spotify, where outrageous investment leverage and spiraling losses mean lots of plush office space.  According to details now confirmed by Crain’s New York Business, Spotify is now adding a whopping 50,000 square feet to its already-75,000 square foot penthouse office complex in midtown Manhattan.

At roughly $75 per square foot, that brings the rent to around $9.4 million annually.

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Spotify first secured the plush digs in the summer of 2012, but that was before a massive, $250 million investment injection.  Now, with expenses spiraling on unlimited free accounts and slowing paid subscriptions, Spotify has nearly doubled that commitment – and space – overnight.  The pricey workspace offers panoramic views of the entire greater New York area, including a look at more the budget-conscious little people in New Jersey.

The expanded thinkspace adds to worldwide offices in Brussels, London, Stockholm, Paris, Madrid, Oslo, Amsterdam, Helsinki, East Melbourne, Berlin, and Copenhagen.

 

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Here are just some of the details of this ‘amenity packed’ high-end space, from real estate firm RXR.

Magnificent cast iron façade with dramatic arched entranceways, constructed in 1896.

Over-sized windows offering abundant light and air.

Soaring 17’ ceiling heights.

Central lobby for office tenants clad in travertine marble with sophisticated dark wood and quartz stone concierge desk with 24-hour attendant.

Enhanced security with technologically advanced turnstiles.

A view that looks like this…

 

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(All images from the RXR realty listing page; second image from Google Maps.)

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Comments (32)
  1. check please

    you have to bleed money to pretend you are making money in this world. I have a hard enough time parking my wanna be exec car in front of my crummy apartment here in LA


    Reply
  2. any mouse

    It’s nice to see where the money is going instead of to the artists that are the basis for the business.

    artists, leave spotify now… NO MUSIC = NO BUSINESS.


    Reply
    1. PiratesWinLOL

      …and go where exactly? To the crashing market of downloaded MP3s perhaps? Yeah, you enjoy that.. Especially if you like being irrelevant.


      Reply
      1. FarePlay

        This better than piracy argument is distracting and borders on fear mongering. If artists or any worker is muzzled into accepting bad deals all is lost. Dare I say it is in-America.


        Reply
  3. James Popik

    Really? And they claim they can’t possibly give artists any more?


    Reply
  4. Michael Silverman

    I think it’s irreponsible to continue to report that Spotify is a) not paying artists, and b) not going to be profitable. As a regular reader of Digital Music News, I used to believe that they were not a viable company. But after reading an article in Fast Company last month, I totally get it. They are profitable in several countries that are mature markets, and plowing as much investment as possible into emerging markets. This is a perfectly reasonable business approach, and they could be profitable in the short term if they stopped investment in the future.
    As for paying artists, they pay EXACTLY THE SAME as iTunes. 70% of the money coming into Spotify is distributed to the artists. I make more on Spotify than iTunes. And since the listeners don’t own my tracks, they will come back and pay me more for the privilege to listen again.
    Embrace the future. It’s here, and i am thankful that a responsible company like Spotify is at the forefront of it.
    Say what you want, but it’s been a huge boon for the artists on my label.


    Reply
    1. CFO

      A Fast Company article? HA! Did this article mention the “pump and dump” operation that this is with Goldman Sachs pulling strings on the IPO then dumping it 5 days later? Profitable countries? Should I remind you that Sweden is about the size of Kentucky? Holland is the size of New Jersey! So it’s huge in Montclair, so F’ing What?


      Reply
      1. Michael Silverman

        Let’s put it another way: what would you do differently? They pay exactly the same as iTunes. The world is embracing streaming. (Look at Netflix.) The consumer experience is excellent. What exactly do you wish they would do differently?


        Reply
        1. CFO

          Do WHAT differently? No one is forcing anyone to put money into a sinkhole.


          Reply
        2. Yves Villeneuve

          As per your request.

          Pay artists/labels a fixed .012 per stream, paid or free subscription, based on a logical premium calculation over ownership royalties. Renting/leasing should cost more than owning, otherwise you can’t stay in business. If renting rates persist below ownership rates, retailers like iTunes would have a strong case in reducing their royalty obligations below the what the rental market is offering.

          Eliminate the free and discounted streaming tiers.

          The other comments are correct, Spotify is strictly an IPO deal. Once the major labels dump stock they will jack their royalty requirements sky high, see above.

          Do you have a link to this Fast Company article? I tried searching for it but was out of luck.


          Reply
          1. Michael Silverman

            My experience has been that they pay about .5 cents per stream consistently for a couple of years now, so I’m completely confused about the articles that state otherwise.


            Reply
            1. Anonymous

              5 cents a stream?? Where did you get that?? I look at the royalty statements every month, and I’ve never seen anything without a whole bunch of zeroes from them. as in .0007


              Reply
              1. GGG

                He said .5, as in half a cent.


                Reply
    2. any mouse

      Spotify is NOT a music company. It is a financial instrument dreamed up by Silicon Valley and Wall Street to which the labels are now complicitous. If Spotify were to IPO at the same level as Facebook the labels 18% equity share would be $7 Billion Dollars of revenue they don’t have to pay royalties on…

      The entire domestic record business is about $7 Billion Annually right now – that’s a really big carrot and has nothing to do with sustainability or paying artists.


      Reply
      1. Zogg

        There all a ghost and they all hope to be the one who makes it, 2050 history class the gold rush years ! Or not


        Reply
    3. TuneHunter

      Michael, you must be a landlord.
      Spotify, or any subscription based “full access streaming”, is equivalent of giant garbage disposal. We load-in full value goods in and receive scrap value income.

      YouTube style advertising monetization is no different. Mega smoke delivering less than 10% of actual value of the goods.

      Digital music is perfect for internet monetization and 100B dollar industry by 2020 should be our prime goal.


      Reply
      1. Michael Silverman

        Alright, that’s it. Paul, may I submit a guest article? I think we need to get the facts straight on what’s happening to the digital music business, and it’s obvious that I’m going to be swatting flies for days.


        Reply
        1. TuneHunter

          Michael, we are rolling full steam into 35 billion dollar swamp land.
          In the meantime we can keep all the players, just modify the game board and we will arrive at 100 billion dollar fertile ground.
          We got the infrastructure to be there before 2020.
          If RIAA and labels will not start to act Google will be our only hope to return to sanity.


          Reply
  5. GGG

    How many employees work there?


    Reply
  6. Michael Silverman

    And, I would like to add, when I heard a couple months ago that they were valued at 4 billion dollars, I thought the investers were in for the biggest Enron-like disaster of the decade. But I can see now that when you look at the way they are expanding into markets with a track record of maturing them into profitability, the math makes sense. That’s why they were able to get so much funding this round (250 million). They have a pretty solid game plan, with the labels supporting their efforts. They educated the labels on how the world will look in a short time, and they are now willing to go along because it does make a lot of sense.
    I use Spotify, and as a consumer it is the best music service that has ever been offered. Ever. Try it with an open mind.


    Reply
    1. TuneHunter

      The are compressing the value of the music market from 100B by 2020 to at the best 30B in the same year. There are better ways to monetize music. You can convert over 100K Radio stations and all streamers to actual music stores tomorrow. Small changes required.
      … and yes, the article in Fast Company, is just staging for IPO.


      Reply
  7. Eck

    Spotify is only paying 70%. This is not enough for the right holders.

    Spotify should be made to pay at least 90%.

    10% is enough for Spotify to operate.


    Reply
    1. TuneHunter

      Yes, and subscription should go up to $29.99 … but then there will be no subscribers!
      Sorry, open circle, catch 22, forever!
      Discovery moment monetization – no sub streaming with just 39 cents fee to add tune to you play list.


      Reply
  8. Brian Johnson

    Lol…where is Jordan Belfort’s office?


    Reply
  9. Manda

    I have yet to see a consistent .5 cents royalty rate pay out on indie artist statements…


    Reply
  10. Michele Ari

    I’m no Spotify expert. I’m not on there and I don’t subscribe. But this I do know. Just as a comparison:

    About two years ago I moved from Nashville to NYC to carry on making music. That part went very well. Or was going fine until I got ripped off in an apartment scam and was homeless for months on end till I finally left (I had lived there once before in not much better quarters.) as you can imagine it took a toll on my pocketbook, my outlook, added a break in my career I could not afford and didn’t want and my health wasn’t too perky either. Obviously I messed up but if you’re an artist you are willing to take chances in the name of.

    I’m a survivor so thru very soul testing work i pulled through in a new city, but I have seen and experienced how many artists live in NYC and its awful (unless they are the children of the one percent or have rent control.) some literally live amongst trash and filth.

    The fact the profits come from our work & the scales are so heavily tipped, is so heartbreaking. There is one nice thing to think about tho I guess I’d bet my life not a single person running that joint can hum a tune, can create a melody or stand onstage in front of people without wetting themselves. It doesn’t help our bank accounts but at least we artists have the pleasure of experiencing the joy & honor of being a true creative person. They will thank us one day for having kept them alive. Artists would starve and walk through fire to create. They know this. Still, they need to do better.


    Reply
    1. FarePlay

      Thanks Michele.

      All bickering aside, it is the creative spirit that inspires and transcends. What does Spotify contribute? Providing free music at the expense of the creators, that’s your business plan? The only innovation that took place was at the negotiating table. And that didn’t go well for anyone, except Spotify.

      ” …….but at least we artists have the pleasure of experiencing the joy & honor of being a true creative person. They will thank us one day for having kept them alive. Artists would starve and walk through fire to create.”


      Reply
  11. Sockdolager

    Spotify is a server. It has zero input affecting the commodity (music) cost to the end user. The creative content needs to be paid for right from conception/release to the public. Any speculation on pricing of said commodity should be made AFTER a value has been legally ratified for this commodity. Because this law has not been ratified, payment for this commodity, ie: the music, should be paid for by the internet service provider, which in turn, would be paid for by the ISP customer. Until composers/artists get monetary shares of bandwidth used, by law or decree, speculation on the pricing of “the commodity” (after conception/release to public) will continue to benefit everyone but the artist/composer. Who’s at fault? 100% of that blame falls on the societies that “supposedly” collect royalties.


    Reply
    1. Mike DiRubbo

      This makes sense.


      Reply
  12. None4U

    Your comment that they pay the same as iTunes is flat out wrong and I call BS on you getting 5 cents per stream. Gimme a break. Do you work for Spotify?


    Reply
  13. Bees Deluxe

    Spotify received $250M in Series F funding. (11/21/13)

    Spotify raising funds at $5.3B valuation (9/6/13)


    Reply
  14. Tom Ussery

    In Nashville..condo projects are popping up in once off-limits music row. Go figure


    Reply

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