Understanding The Broken Business of Spotify

Spotify is a $50B+ company, but they have never turned a profit. But why does Spotify keep losing money? The answer to this question becomes more clear when we take a deeper look at Spotify's business model. The current music streaming industry has become very competitive. Adding on to this is the fact that these services have to work with a very consolidated music recording industry, which is run by a powerful oligipoly of three companies. All these facts make it difficult for Spotify to turn a profit, despite the fact that the company has over 530 million active monthly users.

#spotify #spotifyeconomics #whyspotifykeepslosingmoney

[TheRealFabz]

No one in the right mind uses Amazon music

[Lucky_]

Spotify’s new algorithm sucks. It used to allow you to discover new songs and artists daily, but now it loops over the same 10 or so songs constantly.

[saurabhnehe]

Audio Quality : Apple music
Playlists : Spotify
Suggestion / Vast library : Youtube music

[benwatts]

I can't understand how Spotify has created a business model where everyone feels as though they're losing out. Artists don't make enough money. Spotify doesn't make enough money. Users are bombarded with ads.

[MrBlackstarHD]

Finally YouTube pushing quality videos instead of videos from big channels

[ArchThaBoss]

This video is proof why competition is important. Music streaming is probably the only subscription service where consumers feel they get value for their money. Take the middleman companies out of the equation and there’s planet of money for the artists to make money and not feel screwed and the consumer gets value for what they pay for. The streamers and the labels have just placed themselves at glorified middlemen and artists can’t get paid their worth because of it

[Samuel-erbf]

i’ve had Spotify premium for years and tried apple music thinking it was going to be smoother with my iPhone. I’m so used to Spotify and found Apple music annoying, confusing i just didn’t like it.

[StarcraftForTheSwarm]

My only real gripe with Spotify, as a long time premium member, is the insane lack of a true shuffle. I'm led to believe that this is also an issue on other platforms, but if you have a sufficiently big playlist, you'll soon learn that shuffle is NOT random. It tries to be cute. It tried to play adjacent music in sequence. However, I LIKE a true random shuffle. I want to hear Black Sabbath and then Prince. Not Black Sabbath, and then Dio (who was in Black Sabbath), and then Ozzy solo, and then Heaven & Hell, all of which have a singular tether. For years it's done this, and it is insane to me. Nobody asked for it so....why??

[richardm]

This video's production quality is right up there with more established channels. Great work.

[drjesubalan]

Spotify and Netflix should collaborate to create a bundle. To disrupt the marketplace.

[GuidoPerdomo]

IDK how it is in other markets, but in the country I live, Spotify ads are basically (and almost uniquely) promoting you to buy a Premium membership. Meaning they're completely missing out on ad-revenue in at least some territories. Maybe this could make up for some of their losses, although I doubt it will completely make up for it.

[Memecube]

What I don't understand is how despite their business only focusing on music, they still don't offer hi-fi plans like Apple or Amazon. Could even be the answer to that price increase they've been chasing for a while.

[snazzyapples]

I switched to YouTube music simply because I already subscribed to YouTube premium. It’s just far more cost effective for so much more than just music :)

[billmarshall]

Main take away: when artists complain about streaming services, they really should be complaining about how little the big 3 music companies are paying them, not the streaming services. The big 3 are receiving billions each year and screwing the artists.

[nicktasteless]

Youtube music is the only one anyone needs. It comes with no freaking ads on youtube. Hard to beat that.

[WillSmith-heep]

1:09 This graph is incredibly misleading. Should be to scale

[ensamble]

Currently, Spotify don't have a set "pay per stream" rate. Instead, it varies greatly depending on whether or not the Spotify user is Free or Premium, which region they're listening from (different regions have different payment modes on Spotify), when it's being streamed (payment also varies on Spotify from day to day) and a variety of additional factors. For example, a Free stream pays much less than a Premium stream. Also, the same person streaming the same track multiple times is worth much less than if different Spotify users stream the same song the same amount of times. If you want to calculate an avarage taking into account all of information, it is around 0, 0009 USD per stream.

[BigBoyz]

i use to love spotify but my god they butchered it with their stupid updates like smart shuffle and playlists only playing the same 30 songs.

[mikecairnduff]

Great video. The main thing separating Spotify from the others is branding. The other companies are better known for other things.

[Eaawesome]

This video is a good view from the financial side of things, however I would continue to use Spotify even if it became more expensive than the other streaming services. I personally find that the algorithm can’t be matched and is always pushing me to discover new music and genres. Not to mention neat features like being able to control music from one device with another device or having group sessions where multiple people can add songs to a queue from their own phones. I tried Apple Music and it just felt clunky outdated and only wanted to push the most popular artists onto me instead of really trying to know what kind of music I like.