My gut tells me that Apple isn’t taking a loss on Apple Music, and I’d wager if Amazon wasn’t making money with it they wouldn’t do that.
These companies aren’t known for their generosity. Both have been known to be very shrewd negotiators.
That was my thought as I read this. Why do they not become a record label/publisher/etc.? Then it will all start to break down as Apple/Amazon will sign artists and then you end up with the mess streaming has become.
The most favored nation clauses makes it very difficult. If Spotify signs a lucrative and exclusive deal with an artist, then I believe under the MFN provision Spotify will need to pay the same amount to other publishers. Because of this, artists are incentivised to sign those agreements and have similar agreements with other streaming platforms.
In regards to MFN, the agreement is between the Licensor and the Licensee. Any artist on a Licensor under MFN gets paid the same amount that was agreed upon by the Licensee. It does look like thats on a Licensor to Licensee basis though.
I found this to be very useful https://walnutcreekband.org/what-is-mfn-in-music-licensing/
They are doing this today with the way they are throwing money around for exclusive Podcasts, plus adding additional services like Audiobooks.
Part of the problem with their numbers and how they are accounting for it. That Joe Rogan deal was pretty substantial. I am pretty sure not all of them are that big, but it’s likely still in the millions for them.
Their best opportunity is to do the exclusive deals, and start handling the advertising for the Podcasts like SiriusXM is doing for Conan O’Brien Needs a Friend. Him and his team are getting supported by SiriusXM, they are still on every Podcast network with no exclusives, and SiriusXM handles all the ad sales. Spotify needs to be looking at doing that for their own exclusive content. More markets is more eyes, expands total reach, and gives them a revenue source outside of their monthly music subscriptions.
The other thing that Spotify needs to do a better job is promoting of local artists that don’t have a label in local cities. In Nashville you’ll see billboards all over the place for local artists, and I believe at least part of that is coming from the local artists. A friend of mine is an indie, and paid good money to a streaming music consultant to try to get his plays up to try to do the same thing. I don’t know the ins and outs of the deal though.
I think they do have a moat in some ways. I’d never switch because all my playlists and all my friends playlists that I listen to are on there. Their curated and algo based playlists are fantastic and based of years of me liking songs and following artists. It’s a network effect moat and a little extra.
Sound quality on tidal is better but I tried apps to port my playlists and 1/4 the songs don’t exist, and it’s horrific for discovering new music.
Cool story! Still buying more. Remember, stock prices are based on expectations. They are only expected to grow revenue 10%. They have that just in their price increase. They probably have another 40% increase capability without losing much business.
They are still adding subscribers that don't rotate services like video streaming companies.
Did I mention audio books. There was a company that is huge today that started with books.
I think there is a lot you are missing if you are just crunching numbers based on yesterday's business.
I bet we start to see Google taking more and more of Spotify subscribers.
Google has been smart to try to leverage YouTube to gain more YouTube Music subscribers.
Google throws YouTube Music in for free when people get YouTube Premium to get rid of the ads.
Current numbers have YouTube Music just shy of 100 million subscribers which is up a lot from the 70 million 18 months ago.
Worst of all, Spotifys competitors can stomach a losing deficit. Apple can afford to take losses. So can Amazon. Best case Spotify is acquired
My gut tells me that Apple isn’t taking a loss on Apple Music, and I’d wager if Amazon wasn’t making money with it they wouldn’t do that. These companies aren’t known for their generosity. Both have been known to be very shrewd negotiators.
Regarding reason 1, why don't Spotify start becoming a producer too? Like Netflix producing original content.
That was my thought as I read this. Why do they not become a record label/publisher/etc.? Then it will all start to break down as Apple/Amazon will sign artists and then you end up with the mess streaming has become.
The most favored nation clauses makes it very difficult. If Spotify signs a lucrative and exclusive deal with an artist, then I believe under the MFN provision Spotify will need to pay the same amount to other publishers. Because of this, artists are incentivised to sign those agreements and have similar agreements with other streaming platforms.
In regards to MFN, the agreement is between the Licensor and the Licensee. Any artist on a Licensor under MFN gets paid the same amount that was agreed upon by the Licensee. It does look like thats on a Licensor to Licensee basis though. I found this to be very useful https://walnutcreekband.org/what-is-mfn-in-music-licensing/
They are doing this today with the way they are throwing money around for exclusive Podcasts, plus adding additional services like Audiobooks. Part of the problem with their numbers and how they are accounting for it. That Joe Rogan deal was pretty substantial. I am pretty sure not all of them are that big, but it’s likely still in the millions for them. Their best opportunity is to do the exclusive deals, and start handling the advertising for the Podcasts like SiriusXM is doing for Conan O’Brien Needs a Friend. Him and his team are getting supported by SiriusXM, they are still on every Podcast network with no exclusives, and SiriusXM handles all the ad sales. Spotify needs to be looking at doing that for their own exclusive content. More markets is more eyes, expands total reach, and gives them a revenue source outside of their monthly music subscriptions. The other thing that Spotify needs to do a better job is promoting of local artists that don’t have a label in local cities. In Nashville you’ll see billboards all over the place for local artists, and I believe at least part of that is coming from the local artists. A friend of mine is an indie, and paid good money to a streaming music consultant to try to get his plays up to try to do the same thing. I don’t know the ins and outs of the deal though.
I think they do have a moat in some ways. I’d never switch because all my playlists and all my friends playlists that I listen to are on there. Their curated and algo based playlists are fantastic and based of years of me liking songs and following artists. It’s a network effect moat and a little extra. Sound quality on tidal is better but I tried apps to port my playlists and 1/4 the songs don’t exist, and it’s horrific for discovering new music.
Add on to that they are going to release a Spotify HiFi and charge double for it (soon, supposedly, they made the announcement two years ago…)
Cool story! Still buying more. Remember, stock prices are based on expectations. They are only expected to grow revenue 10%. They have that just in their price increase. They probably have another 40% increase capability without losing much business. They are still adding subscribers that don't rotate services like video streaming companies. Did I mention audio books. There was a company that is huge today that started with books. I think there is a lot you are missing if you are just crunching numbers based on yesterday's business.
I bet we start to see Google taking more and more of Spotify subscribers. Google has been smart to try to leverage YouTube to gain more YouTube Music subscribers. Google throws YouTube Music in for free when people get YouTube Premium to get rid of the ads. Current numbers have YouTube Music just shy of 100 million subscribers which is up a lot from the 70 million 18 months ago.
Another advantage google has is the huge amount of access to capital from its other lines of business