Re:There are no acceptable ads
by jasode on Sunday March 06, 2016 @12:26PM
(#11234558)
>Given that Spotify is private, how would you know if Spotify is making money?
Industry observers see the financial numbers from Spotify filings in the UK and Luxembourg and can piece together that they spend more than they take in. Another source of information about Spotify health was the Sony email leaks[1] revealing the unfavorable terms to license the Sony music catalog.
Lastly, CEO Daneil Ek has been on record[2] saying, "we believe in the business model of Spotify, and believe that ultimately we’ll become profitable at some point..."
It is not wild speculation that Spotify is losing money.
>How about Pandora Radio? They have about 80M users; is that a failure?
Pandora is also still losing money.[3] Whether it's 80M or 800M users, it's a failure if the business can't turn a profit. (Otherwise known as costs exceeding revenue.)
The overwhelming "costs" in both music streaming services is the royalty payouts for licensing music. So far, not enough people can be convinced to pay $9.99/month. Or, the people that are willing to pay something-per-month are not willing to pay higher amounts such as $19.99.[4] So far, the financial numbers are not working.
Re:There are no acceptable ads
by a_imho on Sunday March 06, 2016 @01:16PM
(#11234762)
I think the key is so far. It might not turning a profit, but ~1bn in revenue is still a strong argument that you can get the subscriptions model working for online music streaming and is not doomed to failure from the very beginning.
Industry observers see the financial numbers from Spotify filings in the UK and Luxembourg and can piece together that they spend more than they take in. Another source of information about Spotify health was the Sony email leaks[1] revealing the unfavorable terms to license the Sony music catalog.
Lastly, CEO Daneil Ek has been on record[2] saying, "we believe in the business model of Spotify, and believe that ultimately we’ll become profitable at some point..."
It is not wild speculation that Spotify is losing money.
>How about Pandora Radio? They have about 80M users; is that a failure?
Pandora is also still losing money.[3] Whether it's 80M or 800M users, it's a failure if the business can't turn a profit. (Otherwise known as costs exceeding revenue.)
The overwhelming "costs" in both music streaming services is the royalty payouts for licensing music. So far, not enough people can be convinced to pay $9.99/month. Or, the people that are willing to pay something-per-month are not willing to pay higher amounts such as $19.99.[4] So far, the financial numbers are not working.
[1]https://en.wikipedia.org/wiki/Sony_Pictures_Entertainment_ha...
[2]http://www.theguardian.com/technology/2015/jun/07/daniel-ek-...
[3]http://www.techtimes.com/articles/98853/20151026/pandora-con...
[4]https://support.tidal.com/hc/en-us/articles/201745891-How-mu...