Category: Spotify IPO Watch

@alliecanal8193: Spotify CEO admits he got ‘carried away’ investing, will rein in spending this year

[Editor Charlie sez: There are no words for the arrogance.]

Speaking on the company’s fourth quarter earnings call, Ek said certain mistakes were made after the company heavily invested in high-growth areas like podcasts, telling investors: “I probably got a little carried away and over-invested.”

Ek, who called out a shaky macroeconomic environment, emphasized the company will be tightening investments in 2023 across the board as the music streaming giant doubles down on streamlining efficiencies “with greater intensity.”

Read the post on Yahoo! Finance

@alliecanal8193: Spotify not raising prices reveals ‘competitive weakness’: Analyst

[Editor Charlie sez: For the impact on streaming royalties, read the background on MusicTech.Solutions: The Elusive Obelus: Streaming’s Problem With Denominators]

Spotify’s (SPOT) decision not to raise prices on its U.S.-based premium subscription plan speaks volumes about the music streaming giant’s lack of pricing power. At least according to one bearish analyst.

“[It’s] a strategic play. It speaks to the relative competitive weakness of their business compared to these bigger firms that have bigger, larger platforms that bring a lot more to the table,” New Constructs CEO David Trainer told Yahoo Finance Live, referring to recent price hikes from both Apple Music (AAPL) and YouTube Premium (GOOGL)….

Spotify stock, which lost more than two-thirds of its value in 2022, surged more than 12% on Tuesday following the company’s report. The stock is down more than 65% compared to its February 2021 record high.

“There’s a disconnect here between valuation and the underlying economics and fundamentals of the business,” Trainer said. “[Spotify] is an unprofitable business that’s been burning through a lot of cash.”

Read the post on Yahoo! Finance

@alliecanal8193: ‘They’ve gone too far’: How Spotify dug a giant hole — and how it can dig itself out

But after a disastrous 2022 for investors, Spotify’s dive into podcasting raises key questions about the company at large:

  • Does the business model work?
  • How long until sustained profitability?
  • Is the streaming service losing core appeal for the younger audiences, who are the most avid music consumers?
  • Has its CEO lost credibility with investors?

The answers to these questions hold the key to whether Spotify can mount a turnaround in the eyes of investors in the years ahead.

Read the post on Yahoo Finance

Daniel Ek’s Edifice Complex: Millions for tribute, but not one red cent for royalties as Spotify buys naming rights to biggest football stadium in Europe

If screwups were Easter eggs, Daniel Ek would be the Easter bunny. Right in the middle of Spotify’s crashing stock price, billion-dollar stock buy backs, shenanigans at the Copyright Royalty Board (which grows more chaotic by the day), the Joe Rogan controversy, and an investigation by the UK competition authorities after an investigation by the Digital Culture Media and Sport Committee of the UK House of Commons, here’s another Easter egg that Little Danny missed.

According to Marca, the sport site based in Spain, Ek is soothing his (so far) failed bid to buy the UK football club Arsenal by acquiring the naming rights to Barcelona FC’s super-stadium, Camp Nou, the largest football stadium in Europe. According to Marca:

Sponsorship seems to be the way in which Laporta hopes to get the Blaugrana out of the red and into the black.

An agreement with music streaming platform Spotify, which is expected to be confirmed imminently, will see the club receive 225 million euros.

In turn, Spotify will sponsor the men and women’s shirts as well as their training wear. Furthermore, Spotify will have the rights to the stadium for the next three seasons- which has received mixed reviews from fans of the club.

Barcelona expect annual income of 20 million euros from Spotify to sponsor the Camp Nou, which is estimated to be more than Manchester City‘s deal with Etihad – who sponsor their stadium for 15 million euros per season.

That’s right–not one red cent for artists (or songwriters) but millions for tribute. And how did this deal come about do you think? Well, realize that Barcelona is also shopping for a rather large loan to renovate the Camp Nou stadium and they turned to…Goldman Sachs, which happens to be one of Spotify’s investment bankers. So which came first?

Does Goldman think there’s anything unethical about a company that screws creators all the livelong day but spends hundreds of millions on naming a soccer stadium after itself? (OK, I got that out with a straight face, but you can laugh now.) Evidently not, because in the catechism of Goldman, you stop at the fees novena.

And speaking of fees, what is the source of funds for Daniel Ek’s latest self-aggrandizement or whatever you call it? Perhaps a loan from Goldman before interest rates spike this year if the Federal Reserve really does say goodbye to the easy money era that has bubbled up assets around the world?

@ddayen: Spotify’s Risk Doesn’t End With Joe Rogan

A critical mass of artists who demand changes at Spotify could get something done, however, since Spotify relies on them to make their product worthwhile. Spotify promises its customers that, by paying one subscription fee, you get access to essentially all recorded music. If the Young firestorm continues, suddenly Spotify would be a balkanized platform, losing fans of the various artists who object to Rogan. It wouldn’t be able to rely on the network effects that make people think they cannot live without Spotify, because it’s one-stop shopping for everything audio.

The situation could inspire artists to realize their power in another context: demanding fair compensation for their work. An artist boycott based on being treated like sharecroppers by the streaming giant could gain a lot of traction. Unfortunately, the (understandable) business decisions of some legacy artists, extreme inequality among musical artists, and the way in which musicians are beset on all sides by monopolies may make it difficult to make headway.

Read the post on The American Prospect