Spotify Earnings: The Music Streaming War Is Heating Up

The market has reacted. So just to give you an idea, I mean 2014 was really the year where we started to see Spotify was the leader in this industry scale. It was founded in 2006, but it's first five, 10 years of existence, it was a much smaller business, just trying to A, get the access to the content that it needed and then B, just to build it ou... See more

What's driven the growth of this industry for the last five to 10 years is this emergence of streaming. We just talked about how it's more than half the business today. It was single digit seven years ago and so that's just been rapid. All of the growth of the value of streaming has basically come from a few developed markets, historic markets that... See more

The streaming giant is asking record labels and artists for money to advertise their songs within its app, arguing that they’ll reach new fans and increase their popularity. The effort is controversial because it’s complicating wider talks over long-term music rights between Spotify and the record companies.

Your competitors are the most successful tech companies in the world, who have enormous war chests of cash, with an in-built hardware advantage, who can use audio as a loss leader for their existing products and services. I’m comfortable with this risk because this has been the case for years now, and Spotify through focus and execution has maintai... See more

Secondly, your strengths to distribution increasingly get fragmented. So in the early days of streaming Spotify as the leader was the dominant platform, but we've seen not only other large leading streaming platforms develop and we can get into that dynamic because that's a very interesting part of the market as well, but we've now started to see d... See more

Consumers transitioned from the ownership of physical CDs and Digital MP3s to accessing an unlimited catalog of music, for $9.99 / month (a price that has not changed almost 13 years later).

Now streaming is still the most important digital channel by far, but you're starting to see these new things emerge. So for an artist, there is a lot more complexity to distributing your product now.  

Spotify is rolling up the internet audio market, which their CEO, Daniel Ek, thinks will grow from $100 billion in revenue a year to somewhere near the video market, which is $1 trillion. People spend about the same amount of time consuming audio as video content. “Are our eyes,” he asks, “really worth 10 times more than our ears?”