I feel like Spotify’s value is mainly to the big 3 music publishers to gain negotiating power against Apple/Alphabet/Amazon. It has existed since 2006, and still losing money. And lots of it.
Well, that's the typical startup trajectory, isn't it? As long as the revenue goes up year-by-year (which seems to be true for Spotify), investors are happy to subsidize the net losses, then once they have cornered the market, they can get rid of as much costs as possible and raise prices as much as possible.
It's a fucked up system, but it seems most companies go through this.
Unless Spotify obtains copyright for all the popular music in the world people want to listen to, or media or whatever, I do not see how this is a possibility.
Currently, Spotify has to buy from the 3 big music publishers (which limits the amount of expenses it can reduce), and it sells to people who have the option from buying from at least 4 streaming services which are relatively trivial to switch to (which limits the amount of revenue they can earn). The exact opposite of the situation you want your business to be in.
Sure, not all songs are available everywhere, but there is at least some coverage. Apple Music seems to have pretty widespread coverage too (https://support.apple.com/en-us/HT204411) but I could find at least a few places I visited recently where it wasn't available while Spotify was (Bangladesh and Haiti are two examples)
In any case, looks like Tidal has never earned a profit, but was bought by Block for $300M a couple years ago for unknown reasons. I cannot imagine that worked out for Block shareholders.
It's the question because the fact that Spotify has to buy from the three big labels has a friend - the big three labels have to sell to Spotify. Tidal's lack of success tells us that.
Yeah, I agree, I have no idea why people keep investing in companies that don't turn a profit, or companies that seemingly don't care about being profitable. It doesn't seem like most startups are interested in being sustainable, they're just interested in reaching the next funding stage, and eventually getting a big payout.
I can see the rationale for investing in a company that isn’t profitable but could be, and has just opted to grow instead. Amazon, right? But I don’t see where Spotify’s “profit” switch is.
Amazon would briefly “come up for air” to demonstrate it could earn profit if it wanted. Spotify hasn’t done that and I don’t think they could earn a profit.
Also, Amazon didn’t go 17 years without profit. Is there any company that went that long and then went profitable?
I like Spotify, but do they even have a roadmap to profitability? Are they even projecting profitability any number of years out?
Exactly the same for Spotify, they haven't started squeezing yet which Amazon started doing a long time ago. Spotify reinvests a lot of money in itself still.
I feel like Spotify’s value is mainly to the big 3 music publishers to gain negotiating power against Apple/Alphabet/Amazon. It has existed since 2006, and still losing money. And lots of it.
https://www.macrotrends.net/stocks/charts/SPOT/spotify-techn...