Innovate to grow, if growth is the objective. For example, they could better serve the audiophile market with higher quality offerings. Not as much growth there though.
How does innovation help them make more money? In the case of higher quality, they can charge more. There are premium services such as TIDAL doing that.
And if they charge more for the relative few people who want it, the record label still gets 70% of the revenue. They have to do something that is not dependent on music licensing.
My point still stands. They chose the path of trying to get market share from incumbents in the podcast and audiobook market rather than trying to innovate in their core music business and that has cost them in multiple ways.
I don't even know what the incumbents are. I had never listened to a podcast before they came to Spotify. So I can easily imagine there was a big untapped market of getting people to spend more time with podcasts, which I assume is much cheaper for Spotify than music licensing. So more customers and less royalties -- I can see a potential in that.
Audible for audiobooks is the most obvious there. That's an interesting point about podcasts, I naively assumed most people were familiar with them long before Spotify offered them. I have been using PocketCasts for many years but iTunes has also carried podcasts for a long time.
I agree in theory but practically this is a non-starter as the big 3 record companies are also investors in the company. Even if they weren't however the downside risks of the big 3 not agreeing to renegotiate licensing in the future would be catastrophic to Spotify. This is where I think Tidal got it right both in terms of a business model and something that was good for artists. It's a shame what became of Tidal.
Even if they did have a non negligible interest in Spotify, that is not the reason it is a non starter. It is a nonstarter because everyone wants to listen to music owned by the big 3 record companies.
Insufficient people are going to be interested in paying for a music streaming service without Michael Jackson, Sinatra, and a whole bunch of other big names and old songs that span decades. And people want to listen to music on demand, and repetitively. People are not going to be signing up for 1 month at a time like video streaming businesses, because people do not consume music the same way as video.
>"The big 3 record companies have negligible investments in Spotify":
This was not always the case however. The big 3 historically had interest at over 6% and they took money off the table only recently. [1]
>"Even if they did have a non negligible interest in Spotify, that is not the reason it is a non starter. It is a nonstarter because everyone wants to listen to music owned by the big 3 record companies."
Yes we are saying the exact same. I clearly stated that losing that licensing would be catastrophic.
Innovate to grow, if growth is the objective. For example, they could better serve the audiophile market with higher quality offerings. Not as much growth there though.