Record Labels will demand more from Spotify until Spotify is out of business. When all other distribution competitors are out of business, then Apple will force Labels to take much less. This is how competition really works.
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Apple's Deep Pockets Affecting Spotify Contract Renewals
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I've been using Apple Music since day one and I have never liked the interface. I tried SiriusXM but their crappy sales tactics pissed me off when they barged into my VW car with a free unwanted trial period that interfered with my iPhone set-up. When I contacted VW and SiriusXM I was told because the radio device TOS allows advertising without my consent and there isn't anything I can do about it. If it interferes with my established service with Apple, then that's simply the way it goes. Based on that I will never buy another car with SiriusXM radio pre-installed. Anyway, I've been planning to try Spotify to see how it works and looks.
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Let me get this straight.....Spotify is upset because..... APPLE PAYS MORE to the labels?
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Isn't that like socialism for the streaming market?Because that's unAmerican son.
With Spotify Engineers are getting all of the coins and the labels are stuck in a situation where they can't afford to hire artists full time so the quality of the music is suffering.
In order to get profitable Spotify wants to pay less to the content creators, i.e. songwriters, artists and labels? Good way of doing business there...
The power of capital. If you cant win on grounds of quality or service you eigther buy the compatitor and then let it go bankrupt, or you do it this way.
Apple wont get hurt, because they nearly dont pay any tax at all. All money is moved first to Holland, with special tax deals, and after that moved to Ireland.
The serious treath for apple music, Spotify, is killed and the customers cant run away to another anymore.
Nice company, apple huh!!
I don't buy it. I've been subscribed to Spotify for three years and they've grown like wildfire. They are THE biggest paid streaming music service out there. Don't tell me you don't have the money!
All this will do is pushing the prices higher. Spotify will need to pass any price increases back to the consumer. Apple wins because they take a percentage of Spotify revenue from some customers. Apple wins again as I am absolutely positive they would love to raise prices too.
Most of the confusion is from reading forums like this where folks throw around terms like "anti-competitive" because they don't understand "anti-trust" laws and think there is some basic requirement in the law that companies "be fair" when the entire business structure is built on beating out your competition. In reality, it's only in rare cases where fairness is legally relevant, i.e., a true monopoly abuses its monopoly position, e.g., Microsoft abused its monopoly position by requiring bundling of its browser, etc. Or when companies get together and agree to set prices, e.g., Apple and booksellers. Otherwise, it's expected that companies will do everything they can to get an advantage over their competition, e.g., loss leaders, store brands, etc.
It's tens of millions more, per year ! Assuming they are both going to be around 30 million paid soon, it is close to 100 million a year more.
The reason i stopped using Spotify it's because Android users was also using it..so was no longer cool! I don't understand why Apple has releasedMusic for Android? Droid users are having problems financially - money problems xD
Either this is a joke or the member is 12 years old.
Ohhh no. To be honest i don't find it fair. I think a better way would be that both services pay the same to the label and then the customers will pick the interface they like best. That way both Apple and Spotify will try to bring a better product on the market (more customers more money).
I've said it for a while, Spotify will have to forget the free tier. It can't be profitable because it's paying more money for the free tier content than its getting in advertising fees. Even with 30m paying users they can't cover the cost of the music stock for the free tier.
The idea of the free tier was to accelerate the adoption of streaming and in the long term force record companies to give preferential terms to Spotify. This could have happened because just like many internet services, one player normally ends up becoming the dominant service due to economies of scale (
Facebook, Amazon, YouTube etc...). This hasn't happened with Spotify for many reasons, and they are paying for this lack of domination now.
I feel it is a very unattractive IPO being that in its present form it can never make money. Furthermore, selling is problematic because none of the other huge companies need a Spotify to sell other services. Apple needed a Spotify to keep iTunes working and sell more iPhones but they just bought Beats for dirt cheap. Google don't need it as they have YouTube, Amazon likewise, Microsoft are turning into a cloud company etc...
Spotify has been loaded with way too much VC money and they all know they're not going to get their money back without being the monopoly in streaming, which is not going to happen now. So it's all gone very wrong.
The VC's are going to have to take a huge loss, the sooner the better and remove the free tier and actually make the company profitable NOW. The longer they leave it the longer they risk the company really going down the toilet and someone picking up the brand for dirt cheap.
The one thing they do have going for it is that the brand is strong. The brand could be used to sell other services or pivot into other things. Which is the only value I see it has if it is a business that just loses money. How much is that brand worth? Billions? I don't know...
The idea of the free tier was to accelerate the adoption of streaming and in the long term force record companies to give preferential terms to Spotify. This could have happened because just like many internet services, one player normally ends up becoming the dominant service due to economies of scale (
Facebook, Amazon, YouTube etc...). This hasn't happened with Spotify for many reasons, and they are paying for this lack of domination now.
I feel it is a very unattractive IPO being that in its present form it can never make money. Furthermore, selling is problematic because none of the other huge companies need a Spotify to sell other services. Apple needed a Spotify to keep iTunes working and sell more iPhones but they just bought Beats for dirt cheap. Google don't need it as they have YouTube, Amazon likewise, Microsoft are turning into a cloud company etc...
Spotify has been loaded with way too much VC money and they all know they're not going to get their money back without being the monopoly in streaming, which is not going to happen now. So it's all gone very wrong.
The VC's are going to have to take a huge loss, the sooner the better and remove the free tier and actually make the company profitable NOW. The longer they leave it the longer they risk the company really going down the toilet and someone picking up the brand for dirt cheap.
The one thing they do have going for it is that the brand is strong. The brand could be used to sell other services or pivot into other things. Which is the only value I see it has if it is a business that just loses money. How much is that brand worth? Billions? I don't know...
You mentioned Spotify is not profitable.
If you go into business, you figure out what prices you set, what revenue you will make, what your cost will be, and if the revenue is lower than the cost, then you will eventually go bankrupt. Spotify is not profitable. They are losing tons of money. If they run out of investors willing to give them money that they are going to lose, they are running out of business.
It's very easy to offer customers good value for little money if you accept losing money all the time. But that's not how you can run a business long term. It's not how anyone would run a business if it were their own money. But Spotify's business is apparently not streaming music and getting payments from people, Spotify's business is convincing investors to hand over money.
Actually, song royalty rates are prescribed by law. People really need to understand the world is a little more complicated and that a free market is just a continuum of free markets and not a specific thing.
http://entertainment.howstuffworks.com/music-royalties6.htm
If you paid good money to upgrade from a 3.5" iPhone to a 4" iPhone and some stupid ad takes it back to 3" then that banner ad is very, very annoying.
People saying Spotify should pay more really don't get it.
The 3% extra Apple pay isn't out of revenue from Apple Music, that piece of junk software will be haemorrhaging cash.
Spotify isn't a music streaming service owned by a financial powerhouse.
Apple knows what it's doing. It's app is woeful and inferior to Spotify. So it's got the next best thing, slowly crush the competition with money.
It's a pity, because in days gone by innovation and being the best would have won it for Apple.
The 3% extra Apple pay isn't out of revenue from Apple Music, that piece of junk software will be haemorrhaging cash.
Spotify isn't a music streaming service owned by a financial powerhouse.
Apple knows what it's doing. It's app is woeful and inferior to Spotify. So it's got the next best thing, slowly crush the competition with money.
It's a pity, because in days gone by innovation and being the best would have won it for Apple.
Sorry to say that, but you're the reason why aliens would/will not make contact with us.
I can't wait until there are only two streaming providers choice is so overrated. I'll take what ever my tech giant overlords provide and be happy