[dopeboy]

This is a huge point that I bet there will be many business case studies around: why didn't what happened to Netflix happen to Spotify?

I thought Tidal was going to be that. Remember their first promo video [0]? Full of A listers pretty much declaring that they're making an artist collective? It had every reason to occur...except it didn't. Why?

[0] - https://www.youtube.com/watch?v=cYYGdcLbFkw

[scarface74]

Spotify is not exactly a shining beacon on the hill for a successful company. They aren’t profitable and they are total beholden to the record labels. They are forced to give 70% of their revenue to record labels. Their fixed cost go up in lockstep with their revenue - not exactly the model of a successful tech company.

Netflix paid a fixed amount to license content and then could spread that cost as it gained customers. It’s the same with their own content. They never have to pay the content producers again for the content they fund.

[kmeisthax]

...until Netflix's licensing agreements expire, which they do regularly. Then the networks demand twice as much money and they have to either keep growing to outpace the cost of licensing or jack up subscription fees, or both.

[scarface74]

Or they “become HBO before HBO becomes them”. That was the entire reason for them doing their own content.

[dopeboy]

I would argue they are in a much more stable position vs Netflix. They are the one stop shop for every kind of audio. Retention will be the true barometer here.

[scarface74]

How is a company that is not profitable and will never make more than a 30% gross margin on a customer in a more stable position?

They are also suffering from the “DropBox problem”. Streaming music is not a product. It’s a feature. Their largest competitors don’t have to make money on streaming music. Streaming music for Apple and Amazon are just features to sell hardware.

[dopeboy]

Is this were the case, why is Amazon's and Apple's pricing the same as Spotify's?

[scarface74]

Spotify isn’t profitable. Apple and Amazon don’t need for their streaming products to be profitable as stand a line services.

Just like Microsoft doesn’t need for OneDrive to be profitable by itself - hence the “Dropbox problem”.

https://www.inc.com/will-yakowicz/why-dropbox-founders-said-...

Do you think AppleTV+ is profitable as $7.99 stand alone service?

[PaulDavisThe1st]

Reason #1: if your work is still available on a cheaper, bigger platform, people are not likely to switch to the the more expensive, smaller platform.

If your old work is still available on the cheaper+bigger platform, but the new work is only on the more expensive+smaller platform, maybe the true fans will switch, but A-listers don't make money just from the true fans.

[dopeboy]

It is my understanding - and correct me if I'm wrong - that a-listers have the leverage to move their entire catalogue over if they wish.

Could they have, en masse, done this over to Tidal? Would that have broke Spotify?

[mongol]

Was it not that Spotify let record companies in on ownership, making it a joint venture of sorts?