Spotify Hits 205 Million Paid Subscribers (variety.com) 37
Spotify packed on 10 million Premium customers in the last three months of 2022 to stand at 205 million, topping its previous guidance. Variety reports: The growth of its paid subs, up 14% year over year, was "aided by promotional intake and household plans," the company said. Overall, the streamer gained 33 million total monthly active users in the fourth quarter -- a record high -- to reach 489 million (free and paid), up 20% year over year. Amid signs of a flagging economy, Spotify posted 3.17 billion euros in revenue, up 18% from the year-earlier period an in-line with guidance, and a net loss of 270 million euros (versus a net loss of 39 million euros in Q4 2021). Operating loss of 231 million euros for Q4 was better than its projection of -300 million euros.
"We ended 2022 with strong Q4 performance as nearly all of our [key performance indicators] surpassed guidance," Spotify said in its quarterly shareholder deck. The company said revenue growth, excluding the impact of changes in foreign currency exchange rates, was ahead of expectations. Meanwhile, Spotify's ad-supported revenue in Q4 grew 14% year over year, to 449 million euros, led by podcasting gains in the mid-30% range. The company's gross margin for the quarter was 25.3%, slightly above guidance "primarily as a result of lower-than-expected spend on new podcast content investments" as well as "broad-based music favorability." Spotify last week cut 6% of its headcount, laying off about 600 employees. On the earnings call Tuesday, CEO Daniel Ek admitted that he had "overinvested" in Spotify's business, requiring the company to cut jobs.
"I still believe it was the right call to invest, and I would do it again," the CEO said. "But things change, and the macro-environment has changed significantly in the last year. And in hindsight, I probably got a little carried away and overinvested relative to the uncertainty we saw shaping up in the market."
"We ended 2022 with strong Q4 performance as nearly all of our [key performance indicators] surpassed guidance," Spotify said in its quarterly shareholder deck. The company said revenue growth, excluding the impact of changes in foreign currency exchange rates, was ahead of expectations. Meanwhile, Spotify's ad-supported revenue in Q4 grew 14% year over year, to 449 million euros, led by podcasting gains in the mid-30% range. The company's gross margin for the quarter was 25.3%, slightly above guidance "primarily as a result of lower-than-expected spend on new podcast content investments" as well as "broad-based music favorability." Spotify last week cut 6% of its headcount, laying off about 600 employees. On the earnings call Tuesday, CEO Daniel Ek admitted that he had "overinvested" in Spotify's business, requiring the company to cut jobs.
"I still believe it was the right call to invest, and I would do it again," the CEO said. "But things change, and the macro-environment has changed significantly in the last year. And in hindsight, I probably got a little carried away and overinvested relative to the uncertainty we saw shaping up in the market."
Wish they paid artists more... (Score:4, Interesting)
Spotify is okay, but they really don't pay artists that much for streaming. I'd rather just buy my library from Bandcamp or other stores that the band gets an honest cut from, and use some music provider that can sync the purchased songs with devices.
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I use this approach:
1. Buy CDs of my favorite artists;
2. Go to their concerts whenever I can;
3. Listen to their songs using Spotify.
4. Buy a couple T-shirts and memorabilia every now and then.
Re: Wish they paid artists more... (Score:1)
However, caveat emptor, many record companies have instigated "360 contracts," wherein the record company doesn't just take a cut of album sales, but of every product offered by the artist. So, they're getting a cut of the CDs, the t-shirts, the Spotify stream revenue, the VIP meet and greet experience, and every little bit in between. Some legacy artists have escaped the most onerous parts of the 360s, but some have not, and it continues to
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Well, I can't do anything about that, but wherever possible I buy from the artist's web page (if they have one), and hope for the best.
With that being said, I have Spotify's recommendation algorithm to thank for discovering my (and my wife's) favorite band back in 2018.
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Spotify is okay, but they really don't pay artists that much for streaming. I'd rather just buy my library from Bandcamp or other stores that the band gets an honest cut from, and use some music provider that can sync the purchased songs with devices.
It is't so much Spotify's fault as the labels, the music industry is seriously broken. Artists could tomorrow get paid 4X what they do to day without Spotify paying out any more than they do today. This is how it works:
First, all streaming services pay out for the music about 80% of what users pay them. Of this around 11% goes to the artists and 73% to the labels. Yes, you read that right. Label cuts were inflated also in the age of physically producing and distributing CDs, but in the streaming economy i
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There are few big players in the field, but so far no big brand label has gone full Disney/HBO "we want the profits from this too" and launched their own streaming service.
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I've been wondering why the Netflix-style fragmentation hasn't happened in music streaming yet. There are few big players in the field, but so far no big brand label has gone full Disney/HBO "we want the profits from this too" and launched their own streaming service.
Well, Netflix has been highly profitable for years, so attractive business, while Spotify has never made profit ever. Labels are already laughing all the way to the bank with the relationship they currently have with streaming services.
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https://musictech.com/news/ind... [musictech.com] https://www.ifpi.org/ifpi-glob... [ifpi.org]
Re: Wish they paid artists more... (Score:1)
You mean it's been simple status quo re: those in a position of power abusing those without power for their own gain?
It's only been the modus operandi of the music business at large for 60 plus years. Who would have guessed that they would have setup agreements going forward so they can continue to milk that cow?
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Spotify is okay, but they really don't pay artists that much for streaming.
Most don't. Spotify is far from the best, and far from the worst as well. But even the top options are far from generous. Bandcamp is somewhat unique in the industry and it also isn't a streaming service so not remotely comparable.
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I think that artists are just over-valuing what a play should be wortth. Most of the time when people play a song, they aren't even actively listening to it. It's just background noise. They might listen to 100 songs a day. At that rate, a month of songs would be about 3000 songs. For the $10 you pay, that only adds up to $0.003 per play. That's without even accounting for costs to run Spotify. So even if you raised the price to $30 a month, you still aren't going to get a singificant amount of money goi
Re: Wish they paid artists more... (Score:1)
Right, who wants to be payed fairly and equitably for their labor? Certainly not us musos, and for sure not those trapped in a business designed specifically to exploit the worker for their product at a hefty detriment to the worker themselves.
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How much do musicians really deserve to be paid for listening to a single song? Youtubers make about $0.005 per video view and quite a few of them make pretty good careers out of it. And that's for an entire video. Some of them are a few minutes, like a song, but some video are over half an hour, or even over an hour.
$potify is defective by design (Score:2)
They missed an under performer (Score:3)
> CEO Daniel Ek admitted that he had "overinvested".
Email the man his severance notice and find a better employee.
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> CEO Daniel Ek admitted that he had "overinvested".
Email the man his severance notice and find a better employee.
Why would you fire a CEO who was following a multi-industry wide growth pattern that hasn't panned out, and who else will take a job where you get fired for literally doing the sensible thing at the time?
This wasn't even a mistake. It was just a business decision that didn't pan out.
Now on the other hand funnelling millions into Joe Rogan, that should see him, tarred, feathered, and then a severance noticed stapled to his forehead. That was a completely bareheaded decision by a company well known for paying
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Or overinvested in the "Bash Apple" strategy. Remember, Spotify is claiming in lawsuits and filings that Apple is killing them and that they're not going to survive unless the government shuts down Apple.
Spotify has twice the number of paid subscribers as Apple Music, so it's not entirely obvious how Apple is hurting Spotify. Unless it's one of those "We'd have 300M subscribers if it wasn't for Apple" things.
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Wow! (Score:2)
To be honest, I don't really understand how they could lose so much money when they have so many subscribers. It seems like a pretty simple business, like selling insurance...you know what your goods will cost you, then set your prices where you make a profit after you cover your costs...this isn't rocket science?
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The numbers made me wonder as well.
$3.17 billion revenue
205 million paying customers
That's $15.46 per year per paying customer in revenue.
But a subscription is $9.99/month.
205 million people at $9.99/month = $24.57 BILLION
And there is certainly ad revenue as well. Where did the other $20+ billion go? We're not even getting into operational costs here.
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Well, many may be family subscriptions. Still, it is a minimum of $5 a month per user So, they are raking in $1 billion monthly, at least. So, yes, where is all that money going?
Around 80% of it is going to payment for music. Year before last Spotify paid out $7 billion [musictech.com] for the music, the number is much higher now with the growth they have had since.
The music industry is actually doing very well with streaming revenues [ifpi.org], total music revenue is growing significantly for the lables and they are extremely profitable.
The reasons artists are only seeing fractions of this money is because the labels take almost all of it [musicbusin...ldwide.com]. Artists could and should easily be paid 4X what they do today w
Lossless, please.... (Score:2)
Could they at least catch up with their peers and give a lossless tier? They've been hinting at it for a while. I'm starting to think they have made a cold business decision that the bulk of their user base doesn't care, so it's simply not worth it, and that's the end of the discussion
While I think too much can be made of this, it is possible to hear the difference. I am not saying I have golden ears. And I am not saying I could reliably pass an a-b test on all material. But, on certain material, if yo
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But, I'm only talking CD 16/44.1. I'm pretty sure everything above that is snake oil.
indeed [xiph.org]
Fire some people.... (Score:2)
If they want to save money, can they fire some people, particularly in dev and product management?
I regularly play with the different streaming providers, and I continue to think Spotify is the best, particularly the eco system (keeping the lack of lossless tier to the side).
BUT, the product is now getting to the point where they are totally over-thinking it. I like that Spotify is not totally minimalistic like some of its competitors. On the other hand, it's starting to show bloat, and subjects the user t
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What percentage of their costs are developers?
205 million paying customers at $9.99/month is over $24 billion a year, and they also take in ad revenue. Firing a few devs??? Seriously?
Re: Fire some people.... (Score:2)
My post had little to do with the actual salaries. Itâ(TM)s more the damage having too many people around trying to do too many things that are worse than unnecessary. They are actually subtracting value. Having too many people, with many of them working on the wrong things can really screw up a product. The damage caused is multiples of any direct costs.
Burn the planet down... (Score:5, Insightful)
Also, Spotify is data rape. They set about 10 cookies and share all your into with a page long list of "trusted partners."
Hard pass. Use torrents, save money and energy.
Re: Burn the planet down... (Score:1)
Re: Burn the planet down... (Score:2)