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Daily content #25- Spotify I will be posting daily, whether I go viral or receive just 1 view. I'll keep posting to test whether consistency works. Spotify is a digital music streaming service founded in 2006 by Daniel Ek and Martin Lorentzon. It revolutionized the music industry by providing users with on-demand access to a vast library of songs, albums, and playlists, becoming a leading platform in the music streaming market. Here are 5 key takeaways for founders and professionals: 1. Disruptive Innovation: Spotify transformed the music industry by shifting from ownership (buying albums) to access (streaming). Identifying opportunities to disrupt traditional business models can create significant market advantages. 2. Freemium Model: Spotify’s freemium model, offering a free tier with ads and premium subscriptions for ad-free listening and offline access, effectively attracts users and converts them into paying customers. This approach can drive user acquisition and revenue growth simultaneously. 3. Personalisation: Spotify’s use of algorithms and data analytics to offer personalized recommendations, such as Discover Weekly and Daily Mix, enhances user experience and engagement. Leveraging data to tailor user experiences can increase satisfaction and retention. 4. Partnerships and Integrations: Collaborating with other tech platforms, such as integrating with Facebook for social sharing and with smart devices like Alexa, has expanded Spotify’s reach and functionality. Strategic partnerships can enhance product value and expand the user base. 5. Artist Relations: Spotify has focused on building strong relationships with artists through initiatives like Spotify for Artists, providing tools and data insights. Supporting content creators can foster a mutually beneficial ecosystem and enhance platform credibility. As of 2024, Spotify is valued at over $70 billion and continues to dominate the music streaming industry. In summary, disrupting traditional models, leveraging personalisation and building strategic partnerships are key strategies for establishing and maintaining market leadership in a competitive industry. Follow for more daily content posts: datahalt.blogspot.com I'm working on a startup - DataHalt - We're building a data privacy platform that collects first party data using cookie consent AI tracking. We connect trust with data. www.datahalt.com launching soon! #DataHalt #startup #founder #business

Music Streaming's Slowdown 🎵 Universal Music Group (UMG), the world’s largest music label, recently revealed a noticeable slowdown in subscriber growth across major streaming platforms like Apple Music. UMG's CFO, Boyd Muir, highlighted a "deceleration in growth" and pointed out that some large streaming partners are struggling to attract new global users. 🌍 Despite a 30% drop in UMG’s shares, the company views this slowdown as a temporary hiccup, expecting recovery in the coming months. However, industry analysts are skeptical, suggesting this might indicate a more significant, lasting shift in the market. As subscriber growth plateaus, labels are turning to cost-cutting measures, including layoffs and restructuring. 🔻 Streaming giants are experimenting with new pricing tiers to boost revenue. For instance, while Spotify has delayed its promised lossless audio tier, Apple now offers it at no additional cost. This strategy aims to enhance subscriber retention and attract audiophiles who seek higher-quality streaming options. 🔊 Interestingly, this slowdown isn't just a challenge for Apple Music; Spotify and Amazon Music are also seeing similar trends. This universal trend raises questions about the sustainability of current business models in the streaming sector and whether we might see a pivot towards direct creator-to-fan revenue systems, potentially reshaping how artists monetize their work. 💡 Is the industry at a turning point, and are we moving towards a model that emphasises direct engagement over passive listening? Let's discuss how these changes could redefine the landscape of music consumption. 🤔 #MusicIndustry #StreamingMusic #DigitalMusic #UMG #AppleMusic #Spotify #AmazonMusic

🎵 Universal Music Group vs. Warner Music Group: Who is the Winner? 🤔 Or maybe that's not the question 🔄 Maybe it is record labels versus music #streaming services: who is the winner? 📉 Back in 2000, the global #music industry was a bit over $20 billion. In 2001, Apple launched #iTunes, and in 2008, Spotify was born. By 2015, the global music industry had reached a low point of only $13 billion. Many believed this was the end for record labels 📈 But suddenly, the streaming services started picking up paid subscribers, and after various years of high growth, in 2023, total trade revenues reached US$28.6 billion, with $17.6 billion just from streaming—67% of total, with Physical being 18% of global recorded music 🌍 The surge of streaming revenue has been nurtured by the growth in paid subscriptions, now totaling 667M 📊 Market Share Subscribers: Spotify 31.7%, Tencent Music 14.4%, Apple Music 12.6%, Amazon Music 11.1%, YouTube Music 9.7%, NetEase 6.7%, Yandex 3.4%, Deezer 1.3% (3rd Q 2023). Spotify is the leader but it is not a "monopoly" like in some other digital businesses 🔍 But let's look at some numbers (Sony Music Entertainment is not a separately quoted company and data in Sony's filing is limited): 💰 2023 Revenue and Net Profit: Universal leading the pack of the labels, but Spotify is the industry leader in revenue still losing money 🔸Spotify: $15B 🔸Universal: $12.3B, $1.4B net profit 🔸Sony: $10.3B (FY 9/2023), loss of $0.6B 🔸Warner: $63B (FY 3/2023), $0.4B net profit 📈 2023 Revenue Growth: Spotify grew 2X compared to Universal 🔸Spotify: 14% (20% 5-Year CAGR) 🔸Warner: 9% (8% 5-Year CAGR) 🔸Universal: 7% (13% 5-Year CAGR) 📊 2023 GROSS MARGIN & EBITDA MARGIN: Warner Leads 🔸Warner: 48% gross, 20% EBITDA 🔸Universal: 44% gross, 14% EBITDA 🔸Spotify: 27% gross, 2% EBITDA 🏆 So back to the initial question: Who is/are the winner(s)? 🌐 The streamers seem to be growing somewhat faster than the record labels, but the streamers' growth is what is fueling the record labels' growth (68% of Universal recording division revenue is payout from streaming services) 🔄 The record labels at this point are highly dependent on the music streaming services to generate revenue, and vice versa (if Universal or Sony pulled their catalog from Spotify, you can imagine what would happen) 💡 If you look at gross margins of publicly quoted streamers like Spotify, even as they have grown in subscribers they have not been able to exert pressure on the record labels (Spotify's gross margin was in the 25%/27% range 5 years ago and it is still there today) 📈 The low gross margins of music streamers (that do not own the content) versus video streamers (like Netflix that own the content and have a 40% gross margin) is one of the main reasons why they have not been able to be profitable. 🏢 On the other hand, the record labels have profited greatly from the streaming business growth, have high gross margins, and EBITDA margins.

What did we find about #Spotify in 2024? >> Over 500 million monthly active users, yet Spotify’s user experience is far from ideal. >> Spotify's free users face relentless interruptions with unskippable ads. >> Despite nearly 240 million paid users, profits continue to decline. >> Spotify’s audio quality lags behind competitors like Apple Music’s lossless audio. >> Price hikes of 20% over two years further frustrate users. >> Spotify's discontinuation of ‘Car Thing’ and lack of real-time lyrics integration hurt the user experience. >> Exclusive podcast deals failed to attract large audiences. Read the full article here: https://lnkd.in/dwsmjpsE This article is contributed by Prateek Arsh #prodmag #product #spotify #music #streaming

#Spotify #Streaming #Music #Disruption #Innovation “…under pressure from shareholders to improve margin, Spotify has neatly implemented four, margin improving, sustaining innovations: Discovery mode which can give Spotify around 15% additional share (per Billboard) Fraud fines issued to labels and distributors effectively means Spotify retains more revenue Spotify’s “modernised” two-tier licensing means a big chunk of songs will not be paid royalties. If Spotify retains just a small portion of that, it is more margin. Even if Spotify gets to keep $0.00, two-tier licensing and anti-fraud measures will disincentivise the longtail, which will mean a slowdown in the number of low-revenue bearing tracks. This in turn will slow the rocketing of hosting fees, which means easing margin pressure The infamous audio books bundle sees less share going to music rightsholders, which in turn could (depending on book rightsholder payments) also mean more share to Spotify (per Variety) On top of all this, Spotify has two mid-to-long term accelerators…” Read the post and article for more: #MusicBusiness #Musica #Música #MusicIndustry #Musique #Musik #MusicBiz #Optimisation #MusicRoyalties #Royalties

Let's talk about the streaming wars – Spotify vs. Apple Music. It's like choosing your favorite side in a rap battle, but with way more spreadsheets. Now, most of us rely on gut feeling when making decisions. But what if I told you there's a strategic secret weapon businesses can use? Enter game theory, the science of figuring out what your competitor might do next and then making the best move for yourself. Imagine Spotify wakes up to a nightmare: Apple Music just slashed subscription prices! Yikes! But here's where game theory's minimax strategy comes in. It helps Spotify analyze different scenarios and choose the action that hurts them the least, even if Apple Music throws a pricing curveball. Maybe they focus on free users with targeted ads, or double down on exclusive podcasts. The key is to be prepared for anything Apple Music throws their way. And then there's Nash Equilibrium - finding that sweet spot where both sides can win (or at least not lose too badly). Imagine Spotify caters to a wider audience with free, ad-supported tiers, while Apple Music positions itself as the high-fidelity haven for audiophiles. Nash Equilibrium at its finest! While this example focuses on two music giants, it's important to remember that game theory can be applied in situations with more than two competitors as well. This kind of strategic thinking can be a valuable tool in any competitive landscape. The point is, game theory helps businesses see the bigger picture and make strategic choices that keep them competitive, even when things get intense. So, ditch the freestyling and start strategizing like a maestro! Who else thinks game theory should be on every business exec's playlist? #GameTheory #BusinessStrategy #CompetitiveAdvantage #DecisionMaking

Hold or twist? The music industry’s innovation dilemma   With streaming music is at maturity stage in the West, the music industry has switched to optimisation. Streaming itself was a disruptive innovation that turned the old world upside down, but now it is firmly locked into sustaining innovation mode. It is at the ‘you were the future once too’ stage of life. Optimisation is all very sensible and absolutely the safe thing to do. However, music innovation must go beyond simply fine-tuning existing models. As it stands, streaming is perfectly poised for disruptors to come along and turn it upside down. ⚙️ With Western subscriber growth slowing, growth is being driven through sustaining innovations: price increase, two tier licensing and the much-heralded super fan tier 💰 However, in a streaming value chain where a finite pot of money gets divided among constituents competing for share, optimisation can go both ways 💵 Look at things from Spotify’s perspective - it has neatly implemented four, margin improving, sustaining innovations:   1 - Discovery mode 2 - Fraud fines 3 - Two-tier licensing 4 - Audio books bundle 📈 On top of all this, Spotify has two mid-to-long term accelerators: 1) Global South growth; 2) non-music creator networks ⚠️ Herein lies the problem with sustaining innovation: one person’s optimisation can be another’s de-optimisation 🛠️ Streaming needs an innovation overhaul not just tweaks. Sometimes you need to disrupt yourself before someone else does 📜 A little warning from history: in the late 90s the CD reigned supreme but growth was slowing so labels started putting prices up. Sound familiar? 🏴☠️ Piracy came next of course. It’s a dramatically different world today but there are still lessons to be learned. Swap P2P for social and you can see where disruption may come 🙇This time around, the labels are better prepared for managing change and have longer term vision 🫨 However, prepared or not, the streaming side of the music business needs to think hard about whether sustaining innovation is enough. To be blunt, if streaming doesn’t disrupt itself, social will Read the full post here 👇 https://lnkd.in/epCt6Psx #musicbusiness #streaming #music #innovation #disruption

"Tidal and Apple Music pay more than Spotify" No. You're just confused. What you think is a dunk on Spotify is actually a flex for them. These platforms all have the same basic payout setup, it's just that Spotify listeners are SO MUCH MORE ENGAGED that it drives the per stream rate down. This is mostly a good thing. They all do ~70% of subscription revenue split pro-rata with all songs*, and they all essentially have the same subscription fees ($10.99/mo US premium). 𝗧𝗵𝗲 𝗺𝗮𝗶𝗻 𝗳𝗮𝗰𝘁𝗼𝗿𝘀 𝘁𝗵𝗮𝘁 𝗮𝗳𝗳𝗲𝗰𝘁 𝗽𝗮𝘆𝗼𝘂𝘁 𝗱𝗶𝗳𝗳𝗲𝗿𝗲𝗻𝗰𝗲𝘀: 𝟭. 𝗪𝗵𝗲𝗿𝗲 𝗬𝗼𝘂 𝗟𝗶𝘀𝘁𝗲𝗻: A subscriber in India pays less than an American one, so a US stream pays more than one in India. Spotify is growing far faster than global competitors in emerging markets, which tends to bring down the per stream rate. 𝟮. 𝗪𝗵𝗮𝘁 𝗣𝗹𝗮𝗻 𝗬𝗼𝘂 𝗛𝗮𝘃𝗲: Spotify allows free users, plus has bundles like Duo & Family6 which really bring down the per stream rate. Apple is premium only, but also have bundles. They all do. But, Rob...even Spotify premium in the US is lower than Apple - what's going on? This is where #3 comes in. 𝟯. 𝗛𝗼𝘄 𝗠𝘂𝗰𝗵 𝗣𝗲𝗼𝗽𝗹𝗲 𝗦𝘁𝗿𝗲𝗮𝗺: Platforms don't *decide* per stream rates. They simply pay it out pro-rata. Since they all have the same basic fees & structure, the level of engagement significantly affects the rate. Spotify listeners stream far more than other platforms. This brings the per stream rate down. It's a flex, not a knock. 𝗔𝗻𝗱 𝗹𝗶𝘀𝘁𝗲𝗻 - 𝗜 𝗴𝗲𝘁 𝗶𝘁. The system is wildly broken & feels unfair, but it's important to actually understand what you're talking about when pushing for change or improvement. The main culprit here is pro-rata. We should be using fan-centric. We should have higher subscription fees. We should connect artists more directly to fans. We should provide more ways for artists to monetize. 𝗕𝗲𝗰𝗮𝘂𝘀𝗲 𝗵𝗲𝗿𝗲'𝘀 𝘁𝗵𝗲 𝘁𝗵𝗶𝗻𝗴: This passive consumption game only works at scale. We need to focus on new models that increase fandom, connection & music's value. We need to value artists. Not just "content". --- I'll go deeper on streaming's future value & more in this week's Where Music's Going: https://lnkd.in/g7nf3Tgb *As of this week "all songs" are no longer included in pro-rata payouts. If a song has <1,000 annual plays, it will be removed.