how is the book calculated? do they consider investment when they calculated profit?
any idea?
Got a tip for us?
Let us know
Become a MacRumors Supporter for $50/year with no ads, ability to filter front page stories, and private forums.
Spotify Announces 75M Active Users, Raises $526M Following Apple Music Debut
- Thread starter MacRumors
- Start date
- Sort by reaction score
how is the book calculated? do they consider investment when they calculated profit?
any idea?
This is spotify's problem. The record labels will just charge the same rate regardless of how Spotify distributes it.
This is one of the reasons Spotify loses money. The ad supported tier does not cover the costs. With Apple moving into the space it is likely the ratio of free to paid users will get even worse as apple siphons off some paying users.
Also all those cheering the student discount another thing that makes Spotify lose money.
So basically it looks like a chunk of spotify's profitable customers will leave for apple music while Spotify retains almost all the customers the lose money on (ad supported and students)
This is an impending disaster for them. How they see this leading to profitability is beyond me.
They will eventually be forced to get rid of the free and student tiers just to stop the bleeding of money.
The good news is that Spotify will likely lose a lot less money between June 30th and September 30th as a substantial number of their free customers try out apple music. So Apple music will actually save Spotify a ton of money for three months.
True, but you won't be a student forever... hopefully.For a non-student like myself, it would be foolish to stay with Spotify...
Apple Music offers 20% more tracks, free streaming live radio, Siri support (doesn't get any better than being able to tell it to play the #1 track from May, 1982... in my car), seamless integration with match and a better UI.
It's a no-brainier IMO. I'll be switching on day one.
The '20% more tracks' intrigued me...for about a second...until I realized that I may not even care a whit about that extra 20%.
New reports says no the entire iTunes is not available to stream. They're still negotiating with artists and labels. The Beatles are still a hold out.
but if spotify is able to keep the free tier, it could be free for the whole family (like it is now, if you choose)
I hope the models stay how they are so the consumer can get some differentiation between the services
I'd rather have a free tier somewhere, than family plans on all services
Like they sell user data?
What other revenue streams do they have? The subscription customers are likely profitable it is the other 60 million that are a problem. Ads don't cover their costs.
Spotify needs to convert a much higher percentage of their users to subscriptions to become profitable. With Apple music this has become more difficult. Also they should have already went public before this happened. It is unlikely the existence of Apple music leads to a more successful Spotify ipo.
It is pretty much fait accompli apple will have more paying subscribers than Spotify in October.
You realize Spotify is losing money on those free users right? Spotify's business plan revolves around converting those free users to paid users but with Apple music as an alternative that has become even more difficult.
The reality is the amount of money Spotify is losing per user is likely to go up, not down. That is not a good trend.
In those cases, they aren't providing any extra value over what Walmart does. I have a dozens of friends that own breweries and liquor stores that are still able to compete and thrive even with big box liquor stores like Total Wine in town or big brewers in the market. How? Because they don't simply provide the exact same product at a higher price, they provide a greater value than the big guys. They offer something you can't get there. They offer far higher service or better selection and more.
If the little mom and pop shops are closing up, it's generally their own fault for not finding some way to make up for the fact that they can't compete on price. Most close because they don't ever change. They think they can keep providing the same thing they always have and still exist in an ever changing market. There are plenty of small mom and pop businesses that are doing just fine because they understand this.
It's also funny how people talk about how evil Walmart is and want to save the small businesses but shop online at retailers like Amazon. Somehow Walmart is evil but the largest online retailer isn't.
Definitely agree with you. The major differentiator is the family plan... I have family that have iDevices & I'm currently on an iTunes Match, I'll most likely give it a try.
But only issue I have is the 6 device limit versus the 10 device limit on iTunes Match. Have some decisions to make, but I wonder paying for both iTunes Match & Apple Music how that would work... Would I then have 16 devices to manage? Interesting.
That article says Spotify is operating at a loss (the second one that just came out)
HobeSoundDarryl
macrumors G5
That's one (very pro-Apple) way to see it. Here's another. Apple markets Music hard and maybe turns a lot of people onto streaming music that have never been interested before. The free trial will let them judge it for themselves and see how much they like it. At the end of their free trial, they can continue with Apple for $10/month or switch to Spotify for $0/month. Some chunk of them will probably want to switch to free for a fairly similar offering.
It could be a disaster scenario or it could be a huge, rich company marketing streaming to the masses beyond what Spotify can afford and then at least a chunk of those masses choosing free over $10/month when the time comes to pay Apple or don't pay Spotify.
Also there are 2 very different business objectives underpinning all of this. We're keying a lot of differentiation around model profitability because Apple making even more money is important to us consumers(???). However, Spotify is a PRIVATE company. They don't have obligations to public shareholders like Apple. As such, their business objective is not necessarily maximize short-term profitability but to build up their business value for an eventual IPO. This is very much like Facebook in pre-IPO mode. Just like Facebook, growing the numbers of subscribers even if there is a financial loss appears to boost the perceived value in an IPO. Spotify's owners will get very, very RICH when it goes public. Apple is already very, very RICH.
Our sentiment here- always being so pro-Apple- seems to be in a Spotify is now an enemy because Apple has something that directly competes with them. But if one can set aside their Apple-bias for a moment, any negative wishes for Spotify is simply wishing away a pretty comparable streaming music service that is available for as little as free or free* so that a very, very profitable company can make even more money. How do we consumers win by wishing away options that would cost us less than Apple's offering? Isn't it better (for us consumers but not necessarily Apple Inc.) to at least have options?
If Apple's offering is superior to Spotify, Pandora, etc, it should win on it's own merits. All this fault finding with Spotify, Pandora, etc as part of rationalizing Apple's new offering is both par for the course and mostly about trying to trample the relatively small competitors to further enrich the giant. If Apple's offering is worth $10/month, it doesn't need us to prop it up with spin or competitor beat-downs. And if it's not worth $10/month, it certainly is good that those who want some kind of streaming music service have more choices than just one.
Where did you find the six devices limit? I was under the impression it was 6 Apple ID's (users) who can listen on all* their devices (probably 5 like it used to be in the FairPlay DRM days)
That 7.7 million number is the amount the highest paid superstar received in royalties from Spotify. Not Spotify's profit. The article specifically says that Spotify continues to operate at a loss.
Wonder away.
You'll probably never know, given Cook's penchant for not releasing any figures like Apple Watch sales. One thing's for sure: not releasing figures is not a good sign.
It will absolutely be more than the number of spotify's subscribers in October.
I am Spotify paid member as well, but I will go for Apple Music in a heart beat as I have full confidence in Apple.
Remember iPod, iPhone, iPad launch where MS and other company were laughing at apple and look now they can't even catch there breath now. Same thing is going to happen with streaming music..... mark my words.
I am sure when apple has discount program for even hardware, they will have OR will come out soon student program as well.
I am already using ios9 and and El Captain and loved it. new IOS and OS is so so fast then previous OS.
Last edited:
The worst thing for Spotify is s bunch of people trying streaming for the first time w Apple music then switching to the free tier of Spotify. Spotify loses money on free tier users. So while apple will likely take some percentage of profitable subscribers from Spotify it will dump a bunch of unprofitable free users on them?
That would be a disaster for Spotify. I already said that this is likely to tilt the balance of free the paid Spotify users even further to the wrong direction. What a disaster. Yet you are hoping for it like it will help Spotify instead of hastening their demise.
I don't think you understand that the free tier is the albatross around spotify's neck. The only reason Spotify offers a free tier is to try and convert them to subscribers. If they just grow the free tier while losing paying subscribers to apple their business will spiral out of control.
It really seems most people here touting the virtues of spotify's free tier don't understand why it exists and don't understand the consequences of that userbase growing without a much higher conversion to subscriber rate than Spotify has seen to date.
It seems pretty obvious now why one of the reasons apple did not go with a free tier is by not offering it they just tighten the noose around spotify's neck. Spotify already does not convert near enough free users to subscribers, add in a large competitor who will take away some existing customers and some potential conversions and Spotify is in trouble.
Apple would love for everyone who can't afford streaming to sign up for free Spotify. It will hasten their demise.
Last edited:
The reason Spotify and Pandora had a chance to gain a stranglehold over the subscription music market was due to their freemium-based business model. I'm sure they've done the buesiness analysis, but does Apple expect existing/paying Spotify and Pandora users to suddenly drop those tried and true platforms and jump ship to Apple's new service (which is essentially the same thing?)
I don't blame Apple for at least exploring the monthly pay model and starting new users off with 'first three months free', but after all, Apple is very late to this market. If it's a bust and Apple can't move the needle, I expect them to include an ad-based free version in addition to subscription.
I don't blame Apple for at least exploring the monthly pay model and starting new users off with 'first three months free', but after all, Apple is very late to this market. If it's a bust and Apple can't move the needle, I expect them to include an ad-based free version in addition to subscription.
I know I read somewhere the device limit is 6, I understand on the website it says 6 family users... Which as you say it will be under their Apple ID's.
But I doubt they will allow more devices under each family user Apple ID. That would be ridiculous cheap. I think Apple would be strict with having those Apple ID's under one device and not spread out among many devices.
Batterydrain is where It's at for me.. When I had Spotify on my iPhone The battery died about 5-6h from leaving The house.. Went to Applestore to se if my battery was bad but it was in perfect condition since the phone was brand new.. So I googled a bit and found out that this is a problem with spotifys file type/codec/copy protection.. It's a battery killer.. If Apple use a more battery friendly file type that would mean a few more hours of music between charges. Stored music on the phone is like 40h of playback so the 5-6 I got from spotifys is quite useless..
I doubt Apple is going to be turning a profit, either. They just have other reasons to pull users back into their ecosystem. Unless I missed something, I'm going to guess that this represents a Loss Leader approach, especially when it comes to the family model pricing.
Streaming music subscriptions are never going to drive high margins, but can be a compelling part of the iOS value proposition.
Also, I'm a current Spotify user and love it; I would need a revamped UI in iTunes for me to switch over; I much prefer Spotify's
Streaming music subscriptions are never going to drive high margins, but can be a compelling part of the iOS value proposition.
Also, I'm a current Spotify user and love it; I would need a revamped UI in iTunes for me to switch over; I much prefer Spotify's
It makes a lot of the trash that passes for music these days sound a whole lot better.
Spotify has 15 million subscribers not 150 million.
In October Apple music will have unseated Spotify as the largest subscription streaming service.