Spotify Has 10 Million Paying Customers

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How in the hell are these guys still losing money with 10 million customers that pay $120 a year?

Spotify has lost a total of $200 million since it was founded, according to a report last year based on its financial disclosures written by PrivCo, a firm that studies private company performance. Spotify declined to discuss its balance sheet.
 
I'm subbed to Spotify but at the student rate of $4.99/mo , half their regular rate.
Am I... contributing to their financial troubles?
 
Their subscriber base has skyrocketed since year to year, though it may be hitting a peak. That doesn't matter though, the initial 2 years were likely vastly in the negative, with low subs and tons of funds dumped into lawyers and negotiations with record companies. They are established now and are sure to be in the green.

Until, of course, they decide to start dumping more ads into their service; in which case it will slowly kill itself. Just like all the other big online entities.
 
Their subscriber base has skyrocketed since year to year, though it may be hitting a peak. That doesn't matter though, the initial 2 years were likely vastly in the negative, with low subs and tons of funds dumped into lawyers and negotiations with record companies. They are established now and are sure to be in the green.

Until, of course, they decide to start dumping more ads into their service; in which case it will slowly kill itself. Just like all the other big online entities.

There are no ads if you pay. And if you pay, you can listen to damn near everything, anytime you want, as many times as you want, on any device

It's a damn good deal.
 
Streaming music services suck. I prefer my properly tagged FLAC files with high-res artwork.
 
If you wonder why 1 billion income is enough, look at who they're dealing with. The RIAA mafia has endless pockets.
 
They're probably paying more to the RIAA than they take in.. And if they raised prices, the RIAA would too, because they want music to stay in archaic 20th Century formats. If you download music illegally they'll sue you for 10000% of what it's worth, and if you try to do it legally they just charge you through the nose and kill your business.
 
They're probably losing money because 10 million are paying and 30 million are listening with ads that aren't covering the licensing, server, and bandwidth costs. Even charging FM radio ad prices probably wouldn't help since the radio hardware costs are already paid off (radio broadcast towers are built to last) and they don't have to pay more to distribute their signal if they have more listeners.
 
Streaming music services suck. I prefer my properly tagged FLAC files with high-res artwork.

Subscribers can stream at 320kbps. If you don't want to stream you can download at 320kbps. I have several thousand songs downloaded at this quality level.

You will be hard pressed to hear a difference between 320kbps and FLAC in most cases. Sometimes separation will be better with FLAC.
 
Remember this when you post and read those RIAA back articles talking about how the artist only get a fraction of a penny per song play. It's going to the rights owners, maybe even CDNs (doubt it, without video)
 
Remember this when you post and read those RIAA back articles talking about how the artist only get a fraction of a penny per song play. It's going to the rights owners, maybe even CDNs (doubt it, without video)

System has always been broken. If only more artists went the route of Macklemore (no contract, no label, owns all his own shit)
 
Love Spotify - one serious flaw they need to fix is the lack of a family subscription. By that I mean it's unacceptable that my wife and I pause each other when trying to listen to music. And their lame excuses don't cut it. Netflix, Hulu, and even iTunes allow this simultaneous usage.

There is just no one in hell I should have to pay for multiple subs when we all want access to virtually the same music except for their damn greed and sloth.

People have been asking this in their forums for over two years and they have been ignored so far.

They are going to lose people over this plain and simple as now other competing services allow it.
 
I only pay $4.99 a month worth it for no ADS.

How are they losing money? I mean even I pay them...
 
Love Spotify - one serious flaw they need to fix is the lack of a family subscription. By that I mean it's unacceptable that my wife and I pause each other when trying to listen to music. And their lame excuses don't cut it. Netflix, Hulu, and even iTunes allow this simultaneous usage.

There is just no one in hell I should have to pay for multiple subs when we all want access to virtually the same music except for their damn greed and sloth.

People have been asking this in their forums for over two years and they have been ignored so far.

They are going to lose people over this plain and simple as now other competing services allow it.

Yes clearly they are the devil because you are too cheap to pay for two $5/month subscriptions instead of one.
 
Love Spotify - one serious flaw they need to fix is the lack of a family subscription. By that I mean it's unacceptable that my wife and I pause each other when trying to listen to music. And their lame excuses don't cut it. Netflix, Hulu, and even iTunes allow this simultaneous usage.

There is just no one in hell I should have to pay for multiple subs when we all want access to virtually the same music except for their damn greed and sloth.

People have been asking this in their forums for over two years and they have been ignored so far.

They are going to lose people over this plain and simple as now other competing services allow it.

Same issue with my wife; we ended up getting 2 subs.

I'm really curious how Netflix is profitable but Spotify isn't.

With Netflix, we pay $8.65/month total. Netflix has profiles, so we only pay for 1 account.

With Spotify, we pay $10.81 each = $21.62/month total. :confused:

Granted, we use Spotify much more frequently, but intuitively it seems like music streaming should be cheaper than movie streaming.
 
Same issue with my wife; we ended up getting 2 subs.

I'm really curious how Netflix is profitable but Spotify isn't.

With Netflix, we pay $8.65/month total. Netflix has profiles, so we only pay for 1 account.

With Spotify, we pay $10.81 each = $21.62/month total. :confused:

Granted, we use Spotify much more frequently, but intuitively it seems like music streaming should be cheaper than movie streaming.

With Spotify I think you have a better selection. There is a lot of stuff that ISN'T on Netflix, however I think it is pretty rare to find a lot of music missing from Spotify.

YMMV!
 
Same issue with my wife; we ended up getting 2 subs.

I'm really curious how Netflix is profitable but Spotify isn't.

With Netflix, we pay $8.65/month total. Netflix has profiles, so we only pay for 1 account.

With Spotify, we pay $10.81 each = $21.62/month total. :confused:

Granted, we use Spotify much more frequently, but intuitively it seems like music streaming should be cheaper than movie streaming.

My wife and I share a spotify account just fine. Just offline your music. You can have 3 devices with offline music if I recall correctly. That means theoretically you could have 4 people listening to music at once. I offline my phone, and my work laptop. My wife is lazy and streams music all the time.
 
The math works out in Spotify's favor really. At 10% profit off the 10 USD monthly rate per subscriber, they should be pulling in around 100 million USD yearly, keeping them firmly in the black.
 
The math works out in Spotify's favor really. At 10% profit off the 10 USD monthly rate per subscriber, they should be pulling in around 100 million USD yearly, keeping them firmly in the black.

Could their operating costs be greater than 100 million USD yearly?
 
Yes clearly they are the devil because you are too cheap to pay for two $5/month subscriptions instead of one.

What are you, an RIAA shill?? I don't cheap out and get the student $5 sub - I'm way past that. I pay the full $9.99 a month and don't bat an eye doing it.

And if you pay for separate subs, then all your music is separate too and we don't want that (if you bothered to actually read my post you would see that). It's not just about cost, it's about convenience as well. It's also not acceptable to have to download all my music offline. I don't want to listen to the same thing over and over, nor do I want gigs of space taken up on my phone for what should be streaming.

And where does your analogy end? So you want me to pay $20/month now? How about the family of four or five, should they pay $40-50? That's the boat many people are in when you read the thread over at the Spotify community forums.

It's not about being cheap, it's about a company responding to consumer need and demand, especially when their competitors are doing it.
 
My wife and I share a spotify account just fine. Just offline your music. You can have 3 devices with offline music if I recall correctly. That means theoretically you could have 4 people listening to music at once. I offline my phone, and my work laptop. My wife is lazy and streams music all the time.

I'm just not willing to fill up my phone with music I should be able to stream. We have way too many playllists to start doing that.

They just need to get with it and fix it.
 
Wow, what are they spending it on?

Non subscribers would be my guess. I'll bet the ad placements don't cover the cost of royalties plus overhead for a free user given that there are 30 million of them.
 
It's insane to have to pay a royalty for each listener.. That's just financial rape.

Yeah, they want to have their cake and eat it too. They love to argue their product is a akin to a tangible good like hammers or TVs and they should be reimbursed individually as such, but as soon as it's convenient they want to trumpet IP protections.
 
I'm just not willing to fill up my phone with music I should be able to stream. We have way too many playllists to start doing that.

They just need to get with it and fix it.

No they do not need to fix it. It isn't a bug. It's an intentional limitation of their licensing with the record companies. Pay for 2 accounts or maybe they will come out with something that allows 2 streams for $15 (doubt it, but never know).

I'm not a musician or anything, but spotify while convenient and nice, is not making money for any artists. I don't think the publishers/music labels are going to further screw over their people by allowing people to share accounts. I think the offline mode is just there so you can have music w/o internet. It isn't even necessarily there for account sharing. They want everybody to have their own account.
 
I still can't understand...
How having so many paying customers and having advertising they aren't making money.

ESP with companies like Netflix who are turning a profit.

Are the royalties for music really that high?
The only reason I can see that that 2 hours worth of music is 20-30 songs which each have a seperate royalty where a 2 hour movie is only 1 royalty.

But still common sense says that movies would cost more since you're paying for sound and video not just sound.
 
I still can't understand...
How having so many paying customers and having advertising they aren't making money.

ESP with companies like Netflix who are turning a profit.

Are the royalties for music really that high?
The only reason I can see that that 2 hours worth of music is 20-30 songs which each have a seperate royalty where a 2 hour movie is only 1 royalty.

But still common sense says that movies would cost more since you're paying for sound and video not just sound.

I don't think you can compare these business models like that. The music industry is different than the movie/tv one. I believe with TV/Movie there is more value put in new releases. That is why everything on netflix is older or is custom content they created. Nobody puts their current season on netflix (except for a few standouts). Spotify has current music and songs. There might be a slight delay, but it's still pretty much the latest and greatest. They have a huge chunk of the billboard top whatever. Also I suspect some older music retains it's value better than older movies/tvshows. You want to listen to the same song multiple times. Video content is usually watch once and toss.

Anyways, I doubt spotify has the same margin as netflix. Googling around, it looks like netflix has over a 31% margin. Spotify it was harder to get an exact number but it looks to be ~23-24%. That alone is a HUGE difference. Then you take into account all the free accounts spotify has, I doubt advertising makes up for all of that. So yeah spotify loses money. Netflix does not.
 
Love Spotify - one serious flaw they need to fix is the lack of a family subscription. By that I mean it's unacceptable that my wife and I pause each other when trying to listen to music. And their lame excuses don't cut it. Netflix, Hulu, and even iTunes allow this simultaneous usage.

There is just no one in hell I should have to pay for multiple subs when we all want access to virtually the same music except for their damn greed and sloth.

People have been asking this in their forums for over two years and they have been ignored so far.

They are going to lose people over this plain and simple as now other competing services allow it.
Exactly why I left them. Love the service but this was a pain in the arse. On a funny note. If the account is loaded on different phones, you can find a song, then chose to play it on the other persons device. Played "corn in my poop" for my son when I was at work and he was at his girlfriends house.:D
 
No they do not need to fix it. It isn't a bug. It's an intentional limitation of their licensing with the record companies. Pay for 2 accounts or maybe they will come out with something that allows 2 streams for $15 (doubt it, but never know).

I'm not a musician or anything, but spotify while convenient and nice, is not making money for any artists. I don't think the publishers/music labels are going to further screw over their people by allowing people to share accounts. I think the offline mode is just there so you can have music w/o internet. It isn't even necessarily there for account sharing. They want everybody to have their own account.

You seem to be confused about my point. I don't know why. It's very simple. I never said it was a bug. I understand their excuses and they are just that. I don't want separate accounts when we listen to all the same music and want to be able to access it simultaneously

This is about FAMILIES sharing an account, not with your dude bro at college. You know how families share lots of things. Like Netflix (who by the way allow you to purchase different tiers of streams), Hulu, all our apps, and ALL our OTHER music on iTunes. I mean clearly no one else has sharing figured out, so how can we expect Spotify to get it together here? :rolleyes:

You may be right that they won't offer two streams for $15. I mean, their competitor only offers FIVE for $15, so clearly it tough to figure out with licensing and all. :rolleyes:

So YES, they DO need to "fix it". They have acknowledged as much when their chief content officer went on record to say family plans were "definitely coming" over TWO YEARS ago.
 
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