Forgive me for asking, but just to confirm, the problem is too many people have subscriptions, and that's why their growth has slowed? I feel like I'm asking a question that'll have a lot to...
This deceleration in streaming growth in the USA and U.K. is likely a sign of the early stages of subscriber saturation. According to the RIAA, there were approximately 50 million paying music streaming subscribers in the U.S. last year, representing around a sixth of the population.
Forgive me for asking, but just to confirm, the problem is too many people have subscriptions, and that's why their growth has slowed? I feel like I'm asking a question that'll have a lot to unpack, but I'm always a bit perplexed why companies feel the need to grow instead of just plateau when they hit a high enough margin-- other than greed. If the answer is "greed," that totally makes sense.
Also:
It should be noted that both Universal and Sony posted very healthy growth in Q2 2019 — Universal’s record numbers being led by Billie Eilish and Ariana Grande, with Sony’s being led by Khalid and Lil Nas X’s global smash streaming hit, “Old Town Road.”
I felt stupidly shocked that music hits brought that much sway to the market. "THOSE hits did THAT for those companies!?" Meanwhile I'm listening to a 10 year old Real Estate album for the millionth time.
more or less. most of these services and sites--and, arguably, a large part of the capitalist system that currently exists--is underpinned by this idea that growth should be limitless and that the...
Forgive me for asking, but just to confirm, the problem is too many people have subscriptions, and that's why their growth has slowed? I feel like I'm asking a question that'll have a lot to unpack, but I'm always a bit perplexed why companies feel the need to grow instead of just plateau when they hit a high enough margin-- other than greed. If the answer is "greed," that totally makes sense.
more or less. most of these services and sites--and, arguably, a large part of the capitalist system that currently exists--is underpinned by this idea that growth should be limitless and that the only way forward can be to increase in users, subscribers, engagement, money, whatever, which... yeah. to some extent it's driven by the trend of venture capital and similar investments, but even places without VC often seem to buy into that notion after awhile.
It has to do with the fact share price includes growth speculation, to the point we've moved to a level of meta where we don't look much at all at size, we look at growth. Such that 'moving...
It has to do with the fact share price includes growth speculation, to the point we've moved to a level of meta where we don't look much at all at size, we look at growth. Such that 'moving forward' actually means accelerating, and 'moving backward' means decelerating (while still moving forwards). Incidentally this means that we can be in a recession without ever actually being in a recession, since 'slowed growth' has the same effect in this new paradigm as 'economy is shrinking' used to. Not that it's that 'new', it's been the case for several decades at least.
So when you buy a share price of $50, that might mean the share is worth $30 at the current size of the company, with the company expected to grow to the point it is worth e.g. $70 in the future (with the perception of risk somewhat embedded in this price). If the company's expected growth shrinks, that shows a share price drop - in this case perhaps from $50 to $30. Worse, now you also need to factor in the risk of the company fucking up, so if expected growth was 0 then depending on where the risk fell (can be positive or negative) the share price might end up below the real value right now.
Now tie board and executive pay and reputation to share price, embed the 'value for shareholders' as a (quite literally) legal imperative for companies, and you see why the idea of sustainable business is dead.
So much of the tech industry right now is based almost entirely around growth, because the companies' actual businesses don't work and they just lose massive amounts of money constantly. If I'm...
So much of the tech industry right now is based almost entirely around growth, because the companies' actual businesses don't work and they just lose massive amounts of money constantly. If I'm reading Spotify's new Q2 2019 financials (PDF) correctly, they lost €76 million this quarter, after losing €142M in the first quarter. So that's a €218M loss ($243M USD) already this year, and their "Q3/Q4 guidance" looks like they're expecting to lose even more in those quarters.
Almost all tech company valuations come from hoping that if these companies keep growing enough, eventually they will be able to do... something to start making a huge profit instead. I honestly don't know what the "something" is supposed to be though. If Spotify can't make money with 108 million paying subscribers, how will they suddenly be able to even if they get 50M or 100M more?
There is an entire discipline on that question :-) In short, diversify, innovate, outcompete. Diversify being to expand your available markets to include new customers, new products, new purposes,...
There is an entire discipline on that question :-)
In short, diversify, innovate, outcompete. Diversify being to expand your available markets to include new customers, new products, new purposes, etc. Like Apple going into the music industry. Innovate is a big part of what enables that to happen, but it's also its own thing as innovating can lower productions costs and therefore increase margins, or allow you to sell an improved product for more money. Outcompete being to take over competitor's market share and to expand that way.
Of course, there are always limits - nobody in a capitalist market system wants to admit that though, because as soon as we hit a hard limit that can't be rerouted around somehow the entire system will need re-baselining. It's going to be hard to manage that without widescale social collapse.
It's not actually that weird. If only you had knowledge of the future, and you knew that a company was going to do 10x better next quarter, you'd want to buy that stock, right? You'd probably pay...
It's not actually that weird. If only you had knowledge of the future, and you knew that a company was going to do 10x better next quarter, you'd want to buy that stock, right? You'd probably pay many times what it's currently worth, in fact!
The same works in reverse - if you knew that a company was going to do 1/10th the profit next quarter, you'd be dumping your stock as quickly as possible! You'd be willing to dump it for a fraction of its value.
That's, at least, the theory for why things are priced based on predicted value (rather than current value). Whether people are predicting value correctly or not is up to debate, but the underlying idea is reasonable.
Capitalism seems to have a built-in assumption of growth. It's not good enough to make the same profit next year as this year - you have to make more. You have to grow. More subscribers. More...
Capitalism seems to have a built-in assumption of growth. It's not good enough to make the same profit next year as this year - you have to make more. You have to grow. More subscribers. More sales. More traffic. More stores. More. More. More. If you're not growing, you're failing.
It's a stupid mindset. It should be good enough to make the same profit (in real terms, of course), year after year after year. But, for some reason, it's not.
Yeah it’s crazy. I imagine an executive receiving the news. “Sir, I’m terribly sorry, but we only made 400 million USD in the last quarterly” “FUUUUUCKKKKKK!!!!!”
Yeah it’s crazy. I imagine an executive receiving the news.
“Sir, I’m terribly sorry, but we only made 400 million USD in the last quarterly”
I think the blame is that everybody now has a music streaming service that is simply better than Spotify. To name a few Spotify competitors that are superior in some way, we have: Amazon Music -...
I think the blame is that everybody now has a music streaming service that is simply better than Spotify. To name a few Spotify competitors that are superior in some way, we have:
Amazon Music - Discounted if you also have an Amazon Prime subscription, which also gives you Amazon Prime Instant Video, Twitch Prime, and unlimited next day deliveries. That is a fucking good deal.
Pandora - A music radio service exclusive to the US. And it's probably the best internet radio app to exist. Shame it's geoblocked.
Deezer - Offers CD quality audio for a cheaper price than Tidal. Also has about 20 million more licensed tracks than Spotify. The real question is how Deezer hasn't completely left Spotify in the dust.
Apple Music - Aside from a few exclusives that Spotify doesn't have, Apple Music can only really be recommended for those who have invested heavily into Apple's ecosystem, because other apps don't integrate so well into iOS. That being said, my friend has it and was able to find tracks on there that were absent from Spotify, so the library is probably better.
YouTube Music - Included with a YouTube Premium subscription which lets you watch exclusive video content and watch YouTube ad free. What's the other major draw of YouTube Music? The ability to stream any video on YouTube like it was a music track. This alone is huge and basically puts the app on a Grooveshark tier of music choice. If it weren't for the huge buffer/load time I noticed when playing tracks, YouTube Music would be an outright replacement of Spotify for me.
Tidal - Even the standard subscription service offers more exclusives than Spotify. Then there's the high quality lossless CD audio subscription for true audiophiles.
Spotify are running on fumes, brand recognition and the fact that they were the first major service on the market. When consumers wake up and realise that there are loads of better alternatives, I can see that subscriber figure dropping heavily.
I've never heard of Deezer. There's your answer. Less flippantly, the answer is marketing and first mover advantage. Personally, I don't see a big reason to switch away from something that does...
The real question is how Deezer hasn't completely left Spotify in the dust.
I've never heard of Deezer. There's your answer.
Less flippantly, the answer is marketing and first mover advantage.
Personally, I don't see a big reason to switch away from something that does what I want it to do and which I'm familiar with. There's a certain inertia that affects the average consumer (i.e. not a "power user" or connoisseur). Offer me better quality when I can barely tell the difference, more quantity when I rarely ever find something missing from the existing selection? That's value added I don't need in exchange for the hassle of learning new software and a new ecosystem. If you could offer all that at half price, without requiring me to already be subscribed to another for-pay service to get the offer, then we're talking.
The weird thing is, Spotify did give me a reason to switch away from them with the new UI update. No songs tab, you have to manually follow artists for them to show up (in the process ruining...
The weird thing is, Spotify did give me a reason to switch away from them with the new UI update.
No songs tab, you have to manually follow artists for them to show up (in the process ruining literally every user's artists tab), getting rid of the alphabetical scroll bar, needing a text search to navigate the "liked songs" playlist that replaces the songs tab, and straight-up the inability to save and listen to only part of an album.
Spotify is also super tight-lipped about their design goals and have made no substantive response to user complaints or suggestions. Honestly, the best guess I have (courtesy of someone on the Spotify forums) is that they want to push certain use cases of Spotify over others... by making the "music library" use case worse. The update is great if you use it for playlists or to discover new music, which Spotify may want to push, but it's a nightmare if you use Spotify as a music library.
Yeah I hard disagree with you on the claim 'Spotify are running on fumes'. There really are not that many better alternatives. Apple Music - The majority of the world isn't using Apple. But it is...
Yeah I hard disagree with you on the claim 'Spotify are running on fumes'. There really are not that many better alternatives.
Apple Music - The majority of the world isn't using Apple. But it is good to see that it does provide regional pricing like Spotify.
Deezer - Huh? What is this? Its too late to market yourself now, Spotify users arent going to switch out anytime soon just for it, unless it has something like free HBO.
Youtube Music - Geoblocked in a lot of places. It could be a competitor later, but not anytime soon.
Tidal - Yeah its not happening, the majority of the world isn't going to pay more for the lossless audio. Even if it is the same price, it just isn't going to happen this late into the market.
Honestly your best bets are Apple Consumers going to Apple Music or everyone going to Amazon Prime. But the majority of the world doesn't have prime and do they offer regional pricing for Prime Music? Yes there may be a better product available, but thats not the way consumers buy things. It has never been.
Forgive me for asking, but just to confirm, the problem is too many people have subscriptions, and that's why their growth has slowed? I feel like I'm asking a question that'll have a lot to unpack, but I'm always a bit perplexed why companies feel the need to grow instead of just plateau when they hit a high enough margin-- other than greed. If the answer is "greed," that totally makes sense.
Also:
I felt stupidly shocked that music hits brought that much sway to the market. "THOSE hits did THAT for those companies!?" Meanwhile I'm listening to a 10 year old Real Estate album for the millionth time.
more or less. most of these services and sites--and, arguably, a large part of the capitalist system that currently exists--is underpinned by this idea that growth should be limitless and that the only way forward can be to increase in users, subscribers, engagement, money, whatever, which... yeah. to some extent it's driven by the trend of venture capital and similar investments, but even places without VC often seem to buy into that notion after awhile.
It has to do with the fact share price includes growth speculation, to the point we've moved to a level of meta where we don't look much at all at size, we look at growth. Such that 'moving forward' actually means accelerating, and 'moving backward' means decelerating (while still moving forwards). Incidentally this means that we can be in a recession without ever actually being in a recession, since 'slowed growth' has the same effect in this new paradigm as 'economy is shrinking' used to. Not that it's that 'new', it's been the case for several decades at least.
So when you buy a share price of $50, that might mean the share is worth $30 at the current size of the company, with the company expected to grow to the point it is worth e.g. $70 in the future (with the perception of risk somewhat embedded in this price). If the company's expected growth shrinks, that shows a share price drop - in this case perhaps from $50 to $30. Worse, now you also need to factor in the risk of the company fucking up, so if expected growth was 0 then depending on where the risk fell (can be positive or negative) the share price might end up below the real value right now.
Now tie board and executive pay and reputation to share price, embed the 'value for shareholders' as a (quite literally) legal imperative for companies, and you see why the idea of sustainable business is dead.
So much of the tech industry right now is based almost entirely around growth, because the companies' actual businesses don't work and they just lose massive amounts of money constantly. If I'm reading Spotify's new Q2 2019 financials (PDF) correctly, they lost €76 million this quarter, after losing €142M in the first quarter. So that's a €218M loss ($243M USD) already this year, and their "Q3/Q4 guidance" looks like they're expecting to lose even more in those quarters.
Almost all tech company valuations come from hoping that if these companies keep growing enough, eventually they will be able to do... something to start making a huge profit instead. I honestly don't know what the "something" is supposed to be though. If Spotify can't make money with 108 million paying subscribers, how will they suddenly be able to even if they get 50M or 100M more?
If you want to see another extreme example, here's a post I saw last week from a venture capitalist declaring Facebook dead because their growth has stopped: Facebook Is Dying, Libra Won’t Save It, & Wall Street Is Clueless
There is an entire discipline on that question :-)
In short, diversify, innovate, outcompete. Diversify being to expand your available markets to include new customers, new products, new purposes, etc. Like Apple going into the music industry. Innovate is a big part of what enables that to happen, but it's also its own thing as innovating can lower productions costs and therefore increase margins, or allow you to sell an improved product for more money. Outcompete being to take over competitor's market share and to expand that way.
Of course, there are always limits - nobody in a capitalist market system wants to admit that though, because as soon as we hit a hard limit that can't be rerouted around somehow the entire system will need re-baselining. It's going to be hard to manage that without widescale social collapse.
It's not actually that weird. If only you had knowledge of the future, and you knew that a company was going to do 10x better next quarter, you'd want to buy that stock, right? You'd probably pay many times what it's currently worth, in fact!
The same works in reverse - if you knew that a company was going to do 1/10th the profit next quarter, you'd be dumping your stock as quickly as possible! You'd be willing to dump it for a fraction of its value.
That's, at least, the theory for why things are priced based on predicted value (rather than current value). Whether people are predicting value correctly or not is up to debate, but the underlying idea is reasonable.
Capitalism seems to have a built-in assumption of growth. It's not good enough to make the same profit next year as this year - you have to make more. You have to grow. More subscribers. More sales. More traffic. More stores. More. More. More. If you're not growing, you're failing.
It's a stupid mindset. It should be good enough to make the same profit (in real terms, of course), year after year after year. But, for some reason, it's not.
Yeah it’s crazy. I imagine an executive receiving the news.
“Sir, I’m terribly sorry, but we only made 400 million USD in the last quarterly”
“FUUUUUCKKKKKK!!!!!”
I think the blame is that everybody now has a music streaming service that is simply better than Spotify. To name a few Spotify competitors that are superior in some way, we have:
Spotify are running on fumes, brand recognition and the fact that they were the first major service on the market. When consumers wake up and realise that there are loads of better alternatives, I can see that subscriber figure dropping heavily.
I've never heard of Deezer. There's your answer.
Less flippantly, the answer is marketing and first mover advantage.
Personally, I don't see a big reason to switch away from something that does what I want it to do and which I'm familiar with. There's a certain inertia that affects the average consumer (i.e. not a "power user" or connoisseur). Offer me better quality when I can barely tell the difference, more quantity when I rarely ever find something missing from the existing selection? That's value added I don't need in exchange for the hassle of learning new software and a new ecosystem. If you could offer all that at half price, without requiring me to already be subscribed to another for-pay service to get the offer, then we're talking.
The weird thing is, Spotify did give me a reason to switch away from them with the new UI update.
No songs tab, you have to manually follow artists for them to show up (in the process ruining literally every user's artists tab), getting rid of the alphabetical scroll bar, needing a text search to navigate the "liked songs" playlist that replaces the songs tab, and straight-up the inability to save and listen to only part of an album.
Spotify is also super tight-lipped about their design goals and have made no substantive response to user complaints or suggestions. Honestly, the best guess I have (courtesy of someone on the Spotify forums) is that they want to push certain use cases of Spotify over others... by making the "music library" use case worse. The update is great if you use it for playlists or to discover new music, which Spotify may want to push, but it's a nightmare if you use Spotify as a music library.
Yeah I hard disagree with you on the claim 'Spotify are running on fumes'. There really are not that many better alternatives.
Apple Music - The majority of the world isn't using Apple. But it is good to see that it does provide regional pricing like Spotify.
Deezer - Huh? What is this? Its too late to market yourself now, Spotify users arent going to switch out anytime soon just for it, unless it has something like free HBO.
Youtube Music - Geoblocked in a lot of places. It could be a competitor later, but not anytime soon.
Tidal - Yeah its not happening, the majority of the world isn't going to pay more for the lossless audio. Even if it is the same price, it just isn't going to happen this late into the market.
Honestly your best bets are Apple Consumers going to Apple Music or everyone going to Amazon Prime. But the majority of the world doesn't have prime and do they offer regional pricing for Prime Music? Yes there may be a better product available, but thats not the way consumers buy things. It has never been.