31 Reasons Why Spotify Can’t Help Artists…

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1. Goldman Sachs
2. Kleiner Perkins
3. GSV Capital
4. Technology Crossover Ventures (TCV)
5. Lansdowne Partners
6. Abu Dhabi Investment Council
7. Baillie Gifford
8. DE Shaw
9. Discovery Capital Management
10. Halcyon Asset Management
11. Northzone
12. P. Schoenfeld Asset Management LP (PSAM)
13. Rinkelberg Capital
14. Senvest Capital
15. DST Global

16. Accel Partners
17. Coca-Cola Company
18. Universal Music Group
19. Sony Music Entertainment
20. Warner Music Group
21. AFSquare
22. Fidelity Ventures
23. Lakestar
24. Founders Fund
25. Sean Parker
26. Li Ka-shing
27. Horizons Ventures
28. Wellington Partners
29. Creandum
30. Merlin
31. 137 Ventures

List of current Spotify investors and stakeholders, or those actively seeking to commit funds in the current Series G.  Spotify’s total financing is now approaching $950 million.  

Sources: Digital Music News, Crunchbase, and Sky News. 

22 Responses

  1. JTVDigital

    Not sure what the point is exactly.
    Do you know a lot of companies valued like Spotify with no investors?
    Is Spotify a charity business? Where does the word “help” come from in the headline?
    Our artists make more money than ever with streaming, and specifically with Spotify, this is the only thing that matters.

    • Paul Resnikoff

      Q: Do you know a lot of companies valued like Spotify with no investors?

      A: No. I also don’t know many companies valued at more than $8 billion with almost no comprehensive or meaningful plan for profitability, and/or no IPO or exit strategy that makes tangible sense.

      Q: Is Spotify a charity business?

      A: No, but you don’t need to be a charity to deliver a win back to critical suppliers (ie, in this case, of content).

      Q: Where does the word “help” come from in the headline?

      A: I came up with it myself.

      Q: Our artists make more money than ever with streaming, and specifically with Spotify, this is the only thing that matters.

      A: I’ve never understood why the companies getting hurt the most by this are often the ones cheerleading the hardest (and supplying no actual numbers).

      • JTVDigital

        Thanks for the honest answers.

        Profitability is not really possible as long as the number of users / subscribers does not grow drastically. And there’s a lot of room for this.
        Also we can think that a fraction of the valuation is not directly linked to profitability – more than 15 million paying subscribers certainly do have a value.

        +40% in Spotify revenue for our artists over the last 6 months, it does not really hurt them, I guess.

        • Remi Swierczek

          Dear JTVDigital,
          Spotify or any other premium subscription based streaming service inherently converts $100 dollars in obvious to an idiot MUSIC value to just $20 dollars in subscription!

          The only hope for current ad and sub supported business models is conversion of Radio and streaming to PRIMITIVE discovery based music store!

          The value is not in 15M CHEAP LOWBALL SUBS!

          Real value is in 500M Shazamers, 400M Soundhounders,
          800 to 1B anonymous Googlers plundering MUSIC INDUSTRY with their access to free music and lyric ID services!

          Time for labels, Pandora, Spotify, Deezer or conventional Radio to wise up and OUTLAW or BRIBE those music PIMPS and convert them to CASHIERS OF NEW MUSIC INDUSTRY.

          • JTVDigital

            Maybe, maybe not.
            I remember a time when there was an option to download (=purchase) when you were listening to a song on Spotify.
            Deezer did that as well, through their deal with Orange, but the feature has been removed.
            Reality is that this is not the same audience / demographics who listen (stream) and download.
            Starting from Millenials on, ownership is not seen as something important, compared to “older” generations like you and I.
            Add some technological evolutions to this (computers without hard drives, cloud storage…etc).
            Nowadays people (in general) want unlimited and unrestricted access to content.
            Sometimes they’re ready to pay (in the case of Netflix for example), sometimes not.
            The key is to identify as precisely as possible who the potential audience is for each type of service, based on various criteria like gender, demographics, revenue…etc., then have digital services which can specifically address these audience’s demands.
            Digital content deals with a highly fragmented landscape, where basic supply/demand principles can not be easily applied, because there is a very subjective criteria to consider: emotion. Music, movies, etc. are a form of art and therefore creating emotion / reaction which makes these content types harder to market than others, there is a lot of unpredictable consumers’ behavior weighting in.
            This may explain why nobody has found the magical formula to “save the music industry” yet.

          • Remi Swierczek

            “Nowadays people (in general) want unlimited and unrestricted access to content.”

            No problem at $49.99 a month. Only than with 100M global users music would get proper valuation.

            Otherwise enjoy whatever great staff Pandora or Spotify streams for FREE and always pay for addition of a great tune to your playlist.
            Great tune? Not part of your registered playlist? Sorry no display info and payment via Shazam or Google required! So simple! Streaming and Radio working as a music store!

          • JTVDigital

            Actually if we look at YouTube with approx. 1 billion users, where roughly 30-40% are interested in music, it gives us approx 300-400 million people in the world as the core target audience for online music services.
            Recently in an interview Deezer’s CEO was saying the “fair price” for a music subscription service, from the consumers’ perspective, is around 5$ / month.
            He is probably right. Don’t consider Western countries only, most people can certainly not afford more than this if we take a step back and look at Worldwide population’s standards of living.

          • Paul Resnikoff

            The discussion certainly changes outside of the US, Central Europe, and industrialized first world nations. But these are interesting markets. Take Nigeria, for example, where players like Etisalat are digging into possibilities around music. It’s going to be really interesting to see how Deezer strategizes across different countries, especially more stressed-out, lower-income nations where the interest in music is really high.

          • JTVDigital

            And in these markets, the importance of services like Soundcloud is huge. A LOT of people are using it, and I’m talking about mainstream audiences.
            It’s free, not geo-restricted, offers some nice sharing and engagement features, etc.
            One of the next big thing, in parallel to Apple streaming, YouTube Music Key, etc., from an artists’ revenue stream perspective, is Soundcloud monetization when it will be deployed at a larger scale.

          • Ariel

            You can’t just charge whatever you want. There’s a market. And, like it or not, that market includes the entire universe of peer-to-peer. Spotify is successfully competing with free. That’s why everyone’s investing it in it. The alternative is to pass the entire SOPA/PIPA legistlative agenda, gut the DMCA safe harbor provision… and in general make the internet lamer and much more easily controlled.

      • Tcooke

        paul. Spotify pays you, do they not? “Charts, Spotify Top Five” on your front page! They pay you to write all these articles! It makes no difference if it’s negative. It’s a give away when you have an economics degree from stanford, but then are somehow ignorant of basic financial principals and other times loose about facts. You don’t through stanford like that.

      • Johnny Gagnon

        It’s all political engineering by global corporations , the last thing a global dictatorship wants broadcasted is another free thought processed and processing ideology , it’s why they controlled the ’60’s artist ‘ rights with ownership of sound recordings and continue to program the nonsense and non brain activity in todays’ culture!

  2. Art

    This site really is a waste of time. I mean, why don’t you call it “I hate Spotify.com” ? It really is kind of all the things wrong with the music industry….just bitching about things, no creative thinking about how to use the technology to grow the industry. Why aren’t you mad at ASCAP?? Didn’t they do the initial deal with Spotify?

  3. Vail, CO

    Spotify could have been an awesome business instead of another profitless Wall Street Ponzi scheme. Way to go guys.

  4. Anonymous

    there’s no entity on earth more hostile to the idea of digital music than Digital Music News. What I can’t figure out is if there’s a genuine editorial bias behind the hostility, or if they’ve just picked up on a fertile topic for click baiting the lower middle class of the music industry. Either way it’s working because here I am!

    • This...

      Probably the most insightful comment on this post. My guess is that ideologically, Paul isn’t ‘against’ streaming or Spotify. He has just found his niche or as they say in startups, his ‘product/market fit’.

      Regarding the lower-middle class of the music industry, you truly hit the nail on the head there. Streaming is here to stay whether they like it or not. To think we are all going to get all music consumers to start buying albums again is a pipe dream.

  5. Ash

    31 reasons why we should stop looking at streaming as the solution – or even the problem – in the music industry. It’s a waste of time and effort that could be better spent actually creating music. There is no ‘magic bullet’ and there is no ‘one problem.’ Spotify and streaming is the ‘new thing’ for the moment, but I don’t see how posting a bunch of articles complaining about it and lamenting over how unbelievably screwed artists are is going to change anything. You just can’t keep chasing this ghost that everyone has been chasing since Napster – you can’t put the genie back in the bottle.

    Everyone keeps talking about creating a paywall again and getting rid of Spotify’s free service but the reality is that the technology will always find a way around it. The only reason, in my opinion, that piracy is down is because it’s too much of an inconvenience to find an album on Pirate Bay or wherever, download it to your computer, wait for it to load into iTunes, then physically connect your iPhone to your computer and upload it while taking up space that you could use for photos, apps, etc. People will pay for convenience ($2 bottles of water anyone?) and that’s why people are paying for Spotify and its equivalents at all. But trying to up the price like TIDAL and others are doing in exchange for ‘high fidelity’ sound that the average person can’t even hear on their crappy Apple earbuds or don’t have a connection strong enough to even get on their phone is a fool’s errand. Of course no one is going to pay for that.

    And the TIDAL argument of, oh hey, we’re artists! We own this company! If it were as easy as appealing to people’s heartstrings, “Oh! Poor artists!” then piracy would have been solved in an instant. People view musicians – especially ones like Jack White, Jay Z, and so on – as rich celebrities. It didn’t work out too well for Lars Ulrich in 2000 did it? Anyone remember the South Park episode where they made fun of the whole situation – Lars and the record executives couldn’t afford to get their pool ladder in gold? That’s the perception – which obviously for the large amount of artists out there is absolutely not true – but it’s ingrained in popular culture and it’s very hard to rewrite.

    To me, there is no one-size-fits-all solution to making a living as an original artist in 2015 so we should stop looking for one. Yes, we should continue to try to fight for fair royalties and payments for musicians but you have to deal with the reality of what the industry is and accept the fact that recorded music is not where you’re going to make your money anymore.

    • superduper

      Maybe it’s less about destroying a paywall and more about creating a better paywall that’s both agreeable with fans and artists alike. Yet the only way that can be done is to eliminate unlimited streaming, establish stricter windowing periods and focus it more on a vehicle for music sales and less as a way to permanently listen to music. It’s a pretty big dilemma because in each case, nobody really gets exactly what they want, but I think compromises have to be made and I think that goal can be reached. We just need to shift focus is all.

      I don’t think there is a one-size-fits-all approach to making money in music anymore, but I think that dwindling recorded music sales are an abysmal sign for the music industry and I think more should be done to increase music sales for the sake of not only the artists but actually the fans too.

      • Ash

        I feel like that’s wishful thinking, along the lines of, “Why can’t we all just get along?” Windowing seems a more reasonable option, but so long as you’re also selling physical CD’s you’re going to have a harder time pulling that off than say, a movie, that’s in theaters but not out on DVD. But then again some idiot could just record something streaming (however poorly the quality may be) and we’d be back to square one. I hate to say it, but we’re about 15 years too late and there is very little to bargain with now that an infrastructure outside the control of the artists and labels has been in place for years.

        I’m not advocating a “Screw it, music is free,” mentality but I don’t see the sense in spending most of your time fighting an uphill battle that no one is ever going to win.

        • superduper

          It seems as if you are being a little defeatist. Even though I do realize that it is very hard to reverse the effects of piracy, I think it can be done no matter how difficult. I don’t think it’s about getting along. Instead, I think it’s more like creating an industry standard the fans benefit from the being able discover music and the artists benefit from a strengthened value of their art. And to do that, I think my solution is the best possible compromise between these two factors. No, it will not be perfect, but I think it’s definitely worth it.

  6. Soul One

    You wrote ‘Horizons Ventures’ twice (No 27 and 30). There’s no 31 reasons, just 30…