Spotify doesn't make profit from music streaming, despite having over 400M monthly active users, because it pays two-thirds of all its revenue to the rights holders.

3 years ago by 4realz to c/technology

Despite being the king of music streaming, Spotify is struggling financially, but why?
load all comments
EnderMB 261 points 3 years ago

Sometimes, I see some of the takes on here, and it's hardly surprising that the fediverse isn't particularly popular.

Spotify are somewhat responsible for their current position. They hired too many people, extended into markets they didn't need to enter, and have a CEO that has blown money in places that didn't need it. Let's not forget that Spotify spent $300m on sponsoring FC Barcelona, which could have allowed Spotify to employ ALL of the employees it laid off for 1-2 years. Spotify had no need to give $200m to Joe Rogan, either! That's half a billion spunked up the wall on decisions that have done nothing for the company but cause grief. Instead, they could have focused their efforts on paying more out to smaller artists that provide the long tail for their service, while also making deals to promote merch and tour dates where possible.

With that being said, if you think that Spotify didn't play a huge part in making music streaming accessible you're just being contrarian for no reason. They provided (at the time) a solid application, good connectivity with services like last.fm, and had the social connection sorted from the start. Once phones took off, Spotify removed the need for mp3's for the majority of people, largely killing iTunes. Spotify was the winner of the music streaming wars.

Frankly, a lot of people were praising Spotify for their "good" severance package, but IMO shareholders should be livid, and should be calling for a new person at the helm.

path: 0 6104848, hotness: undefined, score: 261, children: 32
abhibeckert -7 points 3 years ago

IMO shareholders should be livid

Why? Shareholders gave Spotify billions of dollars - they expect the company to spend that money. Shareholders are quite capable of depositing their own money in a bank if they didn't want it to be spent.

My take is Spotify hired over 5,000 employees over 2020 and 2021 when the economy looked great. Then Russia Invaded Ukraine in 2022 screwing the global economy and particularly Europe which is Spotify's biggest market. They've laid off about half the people they hired, which is unfortunate... but it's understandable. The couldn't have foreseen the economic shift.

Spotify removed the need for mp3’s for the majority of people, largely killing iTunes

Huh? Apple's music service has about a hundred million users. Up from eighty million a few years ago. Spotify has more than twice that, but iTunes is hardly dead.

path: 0 6104848 6105193, hotness: undefined, score: -7, children: 12
squidman64 43 points 3 years ago

Apple Music the music subscription service is different from iTunes the music purchasing store. When’s the last time you heard of anyone buying an individual song / album on iTunes?

path: 0 6104848 6105193 6105233, hotness: undefined, score: 43, children: 10
1371113 -9 points 3 years ago

When’s the last time you heard of anyone buying an individual song / album on iTunes?

I’m yet to hear a first time, and I remember when mp3s first became a thing.

path: 0 6104848 6105193 6105233 6105419, hotness: undefined, score: -9, children: 8
Jtotheb 26 points 3 years ago

You’ve never heard of someone buying music on iTunes?

path: 0 6104848 6105193 6105233 6105419 6105522, hotness: undefined, score: 26, children: 1
1371113 1 point 3 years ago

Genuinely, never. It wasn’t that popular in my country.

path: 0 6104848 6105193 6105233 6105419 6105522 6122545, hotness: undefined, score: 1, children: 0
technology
technology

@lemmy.world

login for more options
87358
21246
15760

This is a most excellent place for technology news and articles.

Our Rules


  1. Follow the lemmy.world rules.
  2. Only tech related news or articles.
  3. Be excellent to each other!
  4. Mod approved content bots can post up to 10 articles per day.
  5. Threads asking for personal tech support may be deleted.
  6. Politics threads may be removed.
  7. No memes allowed as posts, OK to post as comments.
  8. Only approved bots from the list below, this includes using AI responses and summaries. To ask if your bot can be added please contact a mod.
  9. Check for duplicates before posting, duplicates may be removed
  10. Accounts 7 days and younger will have their posts automatically removed.

Approved Bots


go to feed...