Spotify's Q2 2019 — The Good, The Bad, and The Ugly

Spotify has released its financial report for the second quarter of 2019 (Q2 2019).

First, the good news.

For the three months ended June 30th, 2019, the music streaming giant reported 232 million monthly active users (MAU), up 29% over the same period last year.  This figure outperformed Spotify’s estimates.  The company had expected between 222 and 228 million MAUs.

Total revenue also reached €1.66 billion ($1.85 billion), growing 31% year-over-year.  In addition, revenue from Premium subscribers also grew 31% to €1.56 billion ($1.67 billion).  Still relatively low, ad-supported revenue rose 34% to €165 million ($183 million).  This shows companies that offer ad-supported music streaming (YouTube, Deezer) don’t earn a lot of money from freemium.  In addition, companies like Spotify also pay the music industry much, much less on royalties from ad-supported streams.

The music streaming giant’s monthly churn rate – how quickly customers cut ties with the service – fell 4.6% year-over-year, a historic low.

After finalizing three major acquisitions earlier this year, Spotify’s podcast gamble has paid off.  Podcast audience on the service has grown more than 50% over the previous quarter.  In addition, podcast engagement has doubled since the start of 2019.

Over 400 artists and their teams are now using Spotify for Artists each month.  The company has also paid over €13 billion ($14 billion) to rightsholders since its launch in 2008.

Spotify’s gross margin was 26%, far above its guidance range between 23.5-25.5%.  Premium gross margin was 27.2%, up from 25.9% in Q1 2019.  Ad-supported gross margin also reached 15.8%.

Now, the bad news.

Spotify has 108 million subscribers.  While still far ahead of rival Apple Music (which has 60 million), investors had expected more.  In fact, as the company explained in a press release, the new figure fell “below the midpoint of our guidance range of 107-110 million.”

Spotify also earned “below plan” from Student subscriptions.  In addition, the company’s bi-annual ad campaign remained in line with expectations.  As with previous quarters, average revenue per user (ARPU) continued to fall, dipping nearly 1% to €4.86 ($5.40).  This is due to further rollouts in developing markets, where Premium subscriptions cost far less than in developed countries.

The company’s operating expenses grew 4% year-over-year to €437 million ($485 million).  Operating losses totaled €3 million ($3.3 billion).  The company attributed the ‘better-than-expected loss’ to higher gross profit and lower-than-expected spending across artist, marketing, R&D, and G&A.

And finally, the ugly.

Reacting to the financial report, investors swiftly punished Spotify’s stock.

Due to fewer subscribers than expected, the company’s shares fell 2.3% in early morning trading.

Spinning the bad news, Spotify CEO Daniel Ek reminded investors the company now has nearly double the subscribers of Apple Music.  In addition, with podcast engagement and usage growing on the service, Spotify now expects its podcast ad revenue to grow in the long term.

Stating the company’s “lifetime value” versus the acquisition cost of subscribers is “on the rise,” Barry McCarthy, the company’s Chief Financial Officer, explained,

We’re seeing a virtuous cycle of growth.”

Whether investors actually believe this statement remains to be seen.

 


Featured image by Spotify.

As Music Piracy Significantly Declines, Italy's Top Music Industry Boss Reveals the True Problem — Spotify and YouTube

According to an Italian rights organization, Spotify and YouTube – not piracy – remain the music industry’s worst problem.

In 2014, the United States Trade Representative removed Italy from the Watch List in its Special 301 report.  This publication tracks the countries that don’t do enough to combat piracy.

In a special announcement, the USTR proclaimed,

Italy’s removal from the Special 301 List reflects the significant steps the Government of Italy has taken to address the problem of online piracy, and the continued U.S. commitment to meaningful and sustained engagement with our critical partner, Italy.”

To combat piracy, the country granted AGCOM, the Italian Communications Regulatory Authority, the legal right to directly deal with copyright infringement.

Avoiding courts altogether, AGCOM swiftly grants content creators injunctions against piracy websites.  Rightsholders simply ask the watchdog for a block, which it quickly grants.

Now, five years later, the Italian Communications Regulatory Authority has released information revealing the music industry’s true threat.

Music piracy on the decline while freemium kills the music industry.

In a new report, AGCOM has revealed overall visits to piracy sites have substantially declined.

Between 2018 and 2019, for example, total piracy visits on mobile and desktops decreased 35% across.

Site blocking has proven an effective tactic in combating copyright infringement.  In January 2019, for example, visits to 2Conv and FLV2MP3 immediately sank.  Contrary to popular belief, most users didn’t switch to a VPN to access both sites.

Praising the hardline tactic, Enzo Mazza, Head of Italian music industry group FIMI, explained,

The first major blockade targeted the Pirate Bay in 2008 and the case was confirmed by the Supreme Court.  In terms of market impact, site blocking has proven to be effective in conjunction with the increase of the legal offer.

He added AGCOM regulation played a major role in decreasing piracy visits.

Most of the blocked sites have a landing page, created by AGCOM and shown by the ISPs, which explains to visitors how to reach legal sites.

Yet, a much larger problem exists in the music industry.  Ironically enough, these come from two major music streaming platforms.

“The main issue here isn’t piracy.  It’s how to convert people from free YouTube and Spotify accounts to premium services.”

He explained Italy is a country where the ‘culture of free’ remains firmly planted in users’ minds.

It’s not easy to drag people into a subscription model.

Nearly 90% of music consumers in Italy use YouTube alone to stream their favorite songs.  This leads to lower conversions – and thus lower payouts for labels, publishers, songwriters, and artists, among many other parties.

Conversion rates are still below the global average and this is a major challenge for the industry.

So, what’s the solution?  Mazza said Spotify and YouTube must do more to increase conversion rates.

We’re urging in particular Spotify to do more in terms of promotional campaigns in order to engage new premium customers.

Yet, while Spotify has barely added just 1 million more subscribers in the U.S. alone, and YouTube’s floundering music service has discovered, this is much easier said than done.

The real solution?  Kill freemium music streaming altogether.

Again, easier said than done.

 


 

Five Months After Launching in India, Spotify Barely Has Over 2 Million Local Users

Shifting the global music streaming race, Spotify recently rolled out its ‘Lite’ app in over 36 countries.

comes after a year of testing the 15 MB app in small countries, including Brazil.

So, what makes the ‘Lite’ app so unique?  Spotify allows users to save battery, storage, and data.  Users will first set a monthly mobile data cap.  Most developing and emerging countries have a very limited, capped data plan.

To save battery power, Lite also removes the popular Spotify Connect option.  This feature allows listeners to stream their favorite tracks on wireless audio devices.  Users also shouldn’t expect to stream music with ‘extreme quality’ audio.

The app also allows users to quickly clear their cache within Lite.  This frees up much-needed space on low-end smartphones.

Finally, the search function only provides links to albums and playlists.

The official launch of Lite in 36 countries comes immediately after BofA Merrill Lynch and data analytics firm SimilarWeb shared a surprising study.  Despite dominating the market in terms of overall users and subscriptions, YouTube Music and Spotify both emerged as the most listened to music apps in India.  That’s due to poor user experiences in competitors’ apps.

Breaking down the study, Indian users streamed their favorite works on YouTube Music for 10 minutes and 8 seconds each day.  Spotify came close behind with 10 minutes and 4 seconds.  Gaana – the current market leader – had the lowest average daily time with 5 minutes and 48 seconds.  Wynk Music followed with 6 minutes and 2 seconds.  Users spent 9 minutes and 23 seconds on JioSaavn.

Now, we know how Spotify aims to conquer the emerging market.

A Lite turnaround in India?

For months, Spotify has remained silent on its total subscription numbers following its launch in India.

During the annual Rise startup conference in Hong Kong, the company’s Global Head of Markets Cecilia Qvist revealed it may finally conquer the Indian music market.  Granted, after many, many years.

After reaching over a million users in India during the first week of its launch, Spotify now has over 2 million listeners.  It remains unclear whether the company tallied only subscriptions or if this figure includes trial accounts.  In fact, this number remains rather unimpressive, revealing Spotify has yet to find the success it hoped to have in the country.

Qvist also revealed people have readily installed Lite in India and around the world.

[Lite] has 90% of the same attributes as our core product but is installing much faster.

The company also hasn’t found the same success in every other emerging market.

Qvist admitted that despite now rolling out in 79 countries, Spotify still has a lot of work to do.

Just look at the penetration of mobile phones, for example, across the globe.  I think it’s almost five billion, right?  And we have 217 million users, so there is much, much more room to grow.

 


 

Spotify Launches the Disney Hub Featuring Classic TV and Movie Songs

On the video side, Disney is taking on the market with a dedicated SVOD platform. That’s not the case with music, however.

The Walt Disney Corporation has unveiled a partnership with Spotify.  The music streaming giant will now feature a “prominent spot” for Disney in its iOS and Android mobile app.

Starting today, users in the U.S., U.K., Ireland, South Africa, Canada, Australia, and New Zealand will find a designated music hub after searching for “Disney.”

On a blog post, the company explained,

Stream playlists full of everything from The Little Mermaid to modern favorites like Frozen to Star Wars instrumentals and even Marvel movie soundtracks.  Plus, Disney compilations made for every part of your day — road trip, shower, or sleep time — will help ensure your life is nothing short of magical.

Songs featured in the music hub include those featured in films, television shows, and theme parks.  As stated above, the new hub will feature music from Disney’s properties.  These include songs from the upcoming film The Lion King, including ‘Can You Feel the Love Tonight’ and ‘I Just Can’t Wait to Be King.’

According to Spotify, Disney’s catalog has a strong presence on the platform.  Fans have streamed over 2 billion combined minutes (more than 333 million hours).  The 10 most-streamed songs are Idina Menzel’s ‘Let It Go,’ Auli’I Cavino’s ‘How Far I’ll Go,’ Dwayne Johnson’s ‘You’re Welcome,’ Rascal Flatts’ ‘Life is a Highway,’ Agatha Lee Monn’s ‘Do You Want to Build a Snowman?,’ Donny Osmond’s ‘I’ll Make a Man Out of You,’ Alan Menken’s ‘A Whole New World,’ Shakira’s ‘Try Everything,’ and Kristen Bell’s ‘Love is an Open Door.’

The move comes alongside Disney’s aggressive efforts to establish Disney.

The dedicated subscription video-on-demand (SVOD) platform is a direct stab at entrenched behemoths like Netflix and Hulu, neither of whom enjoy Disney content licensing.

Perhaps a direct play in the streaming music market makes little sense for Disney — though of course, Disney apparently thought the same about video up until recently.

Both companies refused to provide financial arrangements about the new deal.

Current playlists offered include Disney Hits, Favorites, Classics, Singalongs, Princess, Marvel Music, and Best of Star Wars.

Spotify has previously rolled out a collection of content themed around talk show host Ellen DeGeneres.  Dubbed the Ellen Hub, this includes exclusive content from her show.

 


 

Vodafone's 'My Muze' Music Streaming App Quietly Reaches Over a Million Downloads in South Africa

In March 2018, Spotify went live in South Africa.

The company local users a Premium subscription for R5.99, or about $0.42 USD at the time.

Yet, the low price only lasted for a short time.  Shortly after the introductory offer – good for only three months – Spotify jacked up the price to R59.99, or $4.20 USD per month.  Not bad for a country that has a low employment rate.  On average, people earn R20,860 ($1,472) a month in South Africa.

Now, a rival music streaming service has confirmed a new download milestone.

Taking on Apple Music, YouTube Music, and Spotify in South Africa.

Six years ago, and in a surprise move, the Swedish music company with global telcom giant, Vodafone and its parent company, Vodacom.

Under terms of the agreement, the telcom company gave customers two bundle options.  Along with their 4G Red service, clients could choose between a subscription to Spotify Premium or Sky Sports Mobile TV.

Earlier this year, the telcom giant revealed it has 43.8 million customers in the country – 38.2 million prepaid and 5.6 million contract customers.  Vodacom remains ahead of its closest rival – MTN South Africa, which has 26.6 million.

Like India, and to take on international music streaming services, Vodacom rolled out My Muze in April.  Since then, the company has quickly reached over a million downloads on the Play Store alone.  My Muze’s international partners include Deezer, Google Music, and Joox.  Users can also use the app’s Recharge section to purchase music tickets and data bundles.  Weekly streaming plans start at R9.99 ($0.70) a week.

Spotify has yet to disclose how many subscribers – or even total users – it has in the country.  When pressed on the issue, Claudius Boller, the company’s Managing Director for the Middle East and North Africa (MENA), merely said,

We see the user numbers by far exceeding what we had expected.

In PR talk, this usually means the real numbers are much, much lower than the company expected.

Vodacom’s decision to launch its own music streaming and download service in the country is two-fold.  First, My Muze solidifies Vodafone’s dominance in the country.  Second, the service allows the telcom company to diversify its revenue streams.

Touting the success of its own music streaming and download service, MTN’s MusicTime! has over 240,000 downloads on the Play Store and the App Store.

Yet, don’t expect My Muze and MusicTime! to completely wipe out international players.  According to Ndzalo Mpangana, an analyst at iAfrikan Digital, middle and upper-middle-class South Africans prefer using Apple Music and Spotify.  However, thanks to rampant music piracy in the country, MTN and Vodacom may ultimately turn this around among low-income music fans.

 


Featured image by Chris Eason (CC by 2.0).

Surprise! Spotify Hands Over Your Personal Information to Major Labels When You 'Pre-Save'

Spotify’s reputation isn’t exactly in top shape right now.

This year alone, the company with songwriters over much-needed royalty payments, lost , its relationship with Warner/Chappell and Warner Music Group, from top financial firms, from music publishers, European Union law, $159 million in net losses this year so far, and .

Most recently, in a bitter fight against Spotify following its accusations of an ‘App Store monopoly,’ Apple revealed that its rival a commission on 0.5% of its over 100 million subscribers.  Apple’s retort dismisses Spotify’s chief complaint filed in the European Union against its rival.

Now, the music streaming company faces a new controversy — this time, affecting its entire user base.

Have things gotten worse for Spotify?  Yes.  Yes, they have.

For years, the streaming music giant has offered a unique option for users – ‘Pre-Save.’

The feature allows fans to pre-save their favorite artists’ music. Once released, fans can immediately stream new songs and albums.

There’s just one problem, though.  The ‘Pre-Save’ feature comes with a significant caveat – one Spotify has chosen to hide.

According to Billboard’s Micah Singleton, major music labels, including Warner, Sony, and Universal Music, immediately receive access to personal user data after a pre-save is triggered.  The list of data includes e-mail addresses and playlist information, among many other things.  Singleton reports this only happens when users pre-save works.

Even worse: this has been going on for years.

He explains,

Labels also ask for far more permissions than they need.  Spotify users who, for example, tried to pre-save the Little Mix single, ‘Bounce Back,’ from links shared by the act or its label, Sony Music, were prompted to agree that Spotify could allow Sony to “view your Spotify account data,” “view your activity on Spotify” and “take actions in Spotify on your behalf.”

“The exact permissions Sony requests are only visible to those who click through to the corresponding submenus, so users may not fully understand all that they’re agreeing to – or that the changes apply to their account unless they change it on Spotify’s website.

The grabbing dates back to 2017.  Labeling Sony Music as “the worst offender,” the report notes that all three major labels have routinely snooped into Spotify users’ data.

Image by Micah Singleton (Click to enlarge.)

He later tweeted,

Since 2017, labels — the worst offender being Sony Music — have asked for an excessive amount of permissions, when it only requires a single permission to pre-save an album.  Why haven’t you noticed?  Spotify hides the actual permissions requested behind a drop-down menu.”

Citing a key example, users who pre-save Chris Brown’s track, ‘Guidance,’ will first have to provide Sony Music permission to “upload images to personalize your profile or playlist cover.” The major label also receives authority to “manage who you follow on Spotify.”

Other information record labels will have access to includes your personal listening history, works saved to your library, created and save playlists, followed artists, and works you’re currently streaming.  They can also take actions on your account on your behalf.

Image by Micah Singleton (Click to enlarge.)

Thus far, the music streaming company has remained quiet on the report.  So, you can expect this privacy invasion against its loyal fan base to continue.

 


 

Spotify Settles Two Copyright Infringement Lawsuits With Damages Exceeding $365 Million

In July 2017, prior to the enactment of the Music Modernization Act (MMA), Bluewater Services and songwriter Bob Gaudio filed massive copyright lawsuits against Spotify.

Both cases dealt with a tricky part in music copyright – the mechanical license.

In a massive $365 million copyright infringement lawsuit, Bluewater Music Services Corporation alleged that Spotify willfully infringed on 2,339 copyrighted works.  These include Sam Gay’s ‘10,000 Pieces’ and Bob Morrison’s ‘You’d Make An Angel Want To Cheat.’

Bluewater had reportedly terminated the company’s license to reproduce and stream the works in November of 2016.

Bob Gaudio from Frankie Valli and the Four Seasons filed a similar lawsuit.

In short, Spotify streamed their songs without permission.

After checking streamed works dating back to April 2015, Bluewater realized that Spotify hadn’t paid any mechanical royalties.  In fact, the streaming giant hadn’t negotiated a direct mechanical license.

Powerhouse attorney Richard Busch represented Gaudio and Bluewater.

According to Spotify, however, doesn’t apply to the music streaming company (again, this was before the Music Modernization Act codified the streaming mechanical into law).

Spotify’s lawyers wrote,

“‘Streaming’ – by its very definition – cannot infringe upon either the reproduction right under 17 U.S.C. § 106(1) or the distribution right under 17 U.S.C. § 106(3).

The company further defended itself, stating that it didn’t have data to track the compositions or sound recordings.  These included tens of millions of copyrighted works on its platform.

A judge didn’t buy Spotify’s argument.  Last October, a federal court in Tennessee the company’s bid to dismiss both lawsuits.

Now, to avoid paying millions in damages, the streaming music giant has given in.

Spotify finally pays up.

Late last year, the music streaming company a year-long $1.6 billion lawsuit with Wixen Music Publishing.

Like Gaudio and Bluewater, Wixen alleged that Spotify had used tens of thousands of its songs without permission or proper royalty payouts – for years.  Under terms of the undisclosed settlement, both sides reached a “fair and reasonable” deal.

In Tennessee, Spotify has agreed to a joint motion filed to postpone further discovery.  As with Wixen, terms of the deal remain undisclosed.

The move comes ahead of a House of Judiciary Committee hearing investigating copyright laws.  Topics will include unmatched royalties unpaid by Spotify and Apple Music, among other streaming services.

 


 

Spotify Only Paid 0.5% on App Store Commissions to Apple for Premium Subscriptions

Several months ago, and with the help of Anghami and Deezer, Spotify formally lodged an antitrust complaint against Apple in the European Union.

The Swedish music streaming company its rival of taking a 30% “fee” on the App Store.  This, claimed top executives, stifles creativity and innovation while Apple readily promotes its own music streaming service.

Siding with Spotify, a Deezer spokesperson person wrote,

Companies should be able to compete through innovation, content, and customer focus.  Right now, that’s not the case.  iOS and Apple users who love music streaming are disenfranchised, with higher fees and less realistic options as a result.”

Elie Habib, Anghami’s Co-Founder, added,

I think the entire music streaming industry stands behind Spotify in this battle – because it’s blatantly anti-competitive.

The Cupertino tech company quickly fired back, stating Apple has offered to work with Spotify.  Yet, the Swedish company’s CEO, Daniel Ek, hasn’t wanted to.

That didn’t stop the European Union from launching its own investigation into Apple, however.  The Department of Justice a similar investigation.

Now, the Cupertino tech company has responded.

Spotify wants to have its cake, and eat it, too.

As part of its rebuttal earlier this year, Apple said 84% of all developers on the App Store don’t pay a dime.  The company also doesn’t directly compete with Spotify.

Taking a swipe at its rival’s increasingly bitter fight against songwriters, the Cupertino tech company wrote,

We share Spotify’s love of music and their vision of sharing it with the world.  Where we differ is how you achieve that goal.

Underneath the rhetoric, Spotify’s aim is to make more money off others’ work.  And it’s not just the App Store that they’re trying to squeeze — it’s also artists, musicians, and songwriters.

According to documents seen by German newspaper Der Spiegel, Apple argues Spotify has operated on “misleading numbers.”

The Cupertino tech company, for example, had only collected the 30% commission when its rival allowed subscriptions through its iOS app.  During that time, Spotify only signed up 680,000 customers.  Since 2016, however, the Swedish company changed that model, forcing iOS users to subscribe to Premium through its own website.

In short, Spotify only pays the App Store 15% after the first year of a subscription for new customers.  In fact, now that Spotify has 100 million users, the App Store commission has only applied to 0.5% of its worldwide subscribers.

Basically, Spotify hasn’t paid Apple a dime for iOS subscribers in the past three years.  This led an unnamed top music executive to allegedly tell MBW, “Spotify just wants to pay nothing.”

 


Featured image by aisletwentytwo (CC by 2.0).

Despite Downgrade from Evercore, Spotify's Stock Recovers and Gains

Over the weekdn, Spotify’s stock had plummeted.

The drop came following a bearish report from investment firm Evercore.  Spotify’s shares had declined 3.6% in after-hours trading to $143.

Knocking the music streaming company’s stock from In Line to Underperform, analyst Kevin Rippey said investors have overstated Spotify’s ability to make money from podcasts as well as its services to musicians.  He slashed the company’s price target to $110.

Explaining why shares have rebounded this year, Rippey added investors expect one of two outcomes.  Either the company will come out “way ahead” in licensing negotiations with the Big 3 labels – Warner, Sony, and Universal Music – or it will make “a bundle of money” from services which have previously accounted for none of its income.

So, Rippey continues, for the company to achieve Wall Street’s gross profit targets, either Spotify will have to take a larger cut of song royalties from streams, or generate up to $650 million in “ancillary areas” by 2022.  These include Spotify for Artists and podcasts, among others.

Rippey added the company has also overestimated its potential market position in emerging markets.  These includes India, the Middle East and North Africa (MENA), and in Indonesia.

Stating Jio and Gaana remain the current streaming music market leaders in the regions, he wrote,

In emerging markets like India, local players dominate the market.  This fragmentation leads to an understatement of how competitive streaming music is globally.

In addition, Spotify also remains in a tricky position in the United States.  Still behind Apple Music in subscriptions locally, the company could lose its battle with the Copyright Royalty Board (CRB).

Should the CRB uphold its ruling, Spotify will have to pay songwriters and publishers much more per stream.  This, says Rippey, would cut into the company’s income, which the company hasn’t yet “embedded” in its estimates.

Investors have largely ignored Evercore’s bearish report.  Today, Spotify’s stock closed at $150.11.  The company opened at $143.  On Friday, it closed at $148.31.

 


 

Spotify Faces Backlash Over Axing Beloved Features on Mobile

Once again, users aren’t happy with Spotify’s new mobile update.

Spotify doesn’t have a great track record with iOS users as of late.

Several months ago, the streaming music company a controversial new feature aimed at forcing fans to share songs on social media.  In the process, Spotify deliberately hid the often-used repeat and play queue buttons.

Following a major backlash online, the company rolled back the update.

Android users haven’t fared much better.

On multiple devices, including Galaxy S10s, S9s, Note9s, and Huawei smartphones, Spotify’s playback lockscreen controls no longer functioned correctly.  This also happened to music lovers who streamed their favorite tracks Bluetooth in their cars.

Unfortunately for Android users, the company  with tone-deaf copy-and-pasted answers.

We’re still looking into this, and will get back to you as soon as we have updates.”

Now, the company has updated its mobile apps, introducing controversial features no one has asked for and axing those users loved.

Who needs the alphabet, anyway?

On June 13th, Spotify posted an update to the ‘Your Library’ feature.

Aimed at forcing users to finally listen to the company’s expanding podcast offerings, the blog post reads,

Starting today, we’re introducing a new version of Your Library to Premium users that mixes form with function.  Everything about the reimagined Library is designed to get you to the content you want faster.  It also makes getting started and staying up-to-date with podcasts on Spotify a seamless, personalized experience.

Basically, the company removed the alphabetical scroll bar as well as the Recently Played tab.  Under Music, users will now find ‘Playlists,’ ‘Artists,’ and ‘Albums.’

It didn’t take long to subscribers and non-paying listeners to lash out.

On the popular Spotify subreddit, you’ll find topics ranging from “BRING BACK OLD SPOTIFY” (which quickly went gold), “I just canceled Premium,”New mobile update sucks!,” and a post titled “This update is bulls—t.”  Complaints range from poor functionality to Spotify’s copy-and-pasted justifications about how the axed features “make the user experience easier.”

One long-time listener didn’t hold anything back when addressing company executives.

What the f—k Spotify?  Why would you shoot us all in the foot like this?  I’m considering switching services if this isn’t fixed before the next billing cycle but I don’t know how other services compare.  Maybe I’ll do a trial of Apple Music but I have years of music stored on my Spotify.  This has ruined my day.

So far, the company has yet to respond to the criticism.  Yet, based on its recent history, expect Spotify to either roll back the update, or tune out its loyal listeners altogether.

Besides, who needs the alphabet when streaming their favorite music, anyway?  Just about everyone.

 


 

20+ Music Industry Organizations Sign the 'Anti-Stream Manipulation Code of Best Practice'

Admittedly, the music industry has a major problem – fake streams.

Three years ago, for example, Norwegian newspaper Dagens Næringsliv (DN) found Jay-Z’s music streaming service, TIDAL, about its total streaming numbers for two popular albums – Kanye West’s The Life of Pablo and Beyoncé’s Lemonade.

Despite just having under 3 million subscribers at the time, TIDAL reported that The Life of Pablo had magically achieved 250 million streams in 10 days.  Lemonade had also reached an astonishing 306 million streams in just 15 days

In a published extensive Digital Forensics report by CCIS, the newspaper found that the company manipulated the data.  CCIS first started its investigation on February 7th, 2017.

Now facing a federal investigation in Norway, TIDAL executives deny any wrongdoing, despite authorities receiving a manipulated hard drive as evidence.  An unspecified number of artists and labels their music from Jay-Z’s service.

At around the same time, reports Spotify had also gamed the industry to avoid paying top artists like Kendrick Lamar.

In a lengthy piece, Vulture’s Adam K. Raymond claimed Spotify has purposefully filled its service with fake accounts.  The Swedish streamer had yet to tackle “the coverbots and ripoff artists who vomit… inferior versions of popular songs.”  These ‘fake artists’ allegedly manufactured by the company to six-figure salaries for ripping off popular songs.

Spotify any wrongdoing, stating it wouldn’t “pay itself” for fake streams.

Yet, not everyone is convinced.

Dealing with the issue earlier this week, Louis Poen, founder of indie record label Hopeless, the real cost of fake streams for labels – $300 million a year.

One particular track, for example, earned around 3,000 streams per day.  Then, that number jumped up to 35,000 streams each day for three days straight.  Finally, it had abruptly returned to its previous numbers.

Poen explained where the fake streams came from – Spotify.

When we looked at where those streams came from, 100% of them came from six playlists on Spotify.  It couldn’t be more suspicious.  The playlists were created recently.  They gained a bunch of followers in one week.  They’ve never gained another follower since then.

Now, top organizations and major labels have declared war on platforms which readily allow this form of manipulation.

Clamping down on gaming streaming.

Top tech and music industry companies have signed a new code of conduct.  IMPALA and the International Confederation of Music Publishers (ICMP) are among the signatories of the

The signatories have agreed on 22 codes to tackle “stream manipulation.”  These include identifying dishonest manipulation and artificial creation “by human or non-human means,” and stating music streaming services and other digital platforms must play “a valuable role” in tackling fake streams.

Main topics of the code include the definition of fake streaming – now dubbed “streaming manipulation” – ways to identify legitimate versus illegitimate music consumption, practice and reasonable measures against streaming manipulation, compliance with existing national and EU laws, and the legal status of the code of conduct.

Each signatory has agreed the code of conduct will not “affect” existing private agreements with and streaming service providers.

The complete list of signatories include Amazon, the American Association of Independent Music, Artist Rights Alliance, Deezer, IMPALA, the International Artist Organization, ICMP, the International Federation of Musicians, IFPI, the Independent Music Publishers International Forum, Merlin Network, the NMPA, Recording Academy, the RIAA, Sony/ATV Music Publishing, Sony Music Entertainment, Spotify, Universal Music Group, and the Worldwide Independent Network.

You can view the complete code of conduct below.

 


Featured image by Spotify.

Spotify CEO Daniel Ek Says Artists May Get Paid Better Using Facebook's Cryptocurrency, the Libra

Several days ago, and confirming a previously leaked report, Facebook unveiled its new cryptocurrency project – the Libra – which Spotify readily supported.

The social media company also introduced the Calibra, its new global subsidiary.  The subsidiary will provide financial services, allowing Facebook’s 2.4 billion users and others to access and participate in the Libra network.

Around two dozen companies, including Spotify, have signed up to support the Libra.  Each will invest at least $10 million as a part of the Libra Association.  These include Visa, Mastercard, Lyft, PayPal, MercadoLibre, and Uber, among many others.

Facebook had reportedly recruited the backers last month.  Calibra, the new digital wallet for the Libra, will purportedly help users save, send, and spend money.

According to , executives have purportedly worked to create a platform where fans can directly access the audio they want “at any time, anywhere, and at the right price.”  They also want to offer a service with economic bility.

Keep in mind the music streaming company in the music streaming market, just above Pandora and YouTube.  Spotify CEO Daniel Ek also to pay songwriters a 44% increase on royalties, stating it would harm its own ‘affordable’ music platform.

Now, Ek has said using the Libra will actually get artists paid.

Will the Libra help artists get paid?  No, not really.

The Libra Association, an independent, non-profit organization, was founded to create a single global currency and the financial infrastructure to “empower” billions of people around the globe.

Promoting the new digital coin, Spotify wrote,

Libra offers [a] massive opportunity for simple, convenient, and safe payment over the internet (particularly for the 1.7 billion adults worldwide without access to mobile money, a bank account, or a payment card).  We’ve seen this directly in many of the developing markets where we operate.

Pushing its own announcement of backing the Libra, Ek gave a personal interview about the cryptocurrency on the company’s podcast, Culture: Now Streaming.

I think like cryptocurrencies and blockchain are obviously two of the biggest buzzwords you can have today.  And for me, I don’t think technology in itself is that interesting.  What I do think is interesting is what we can do with that technology.”

Repeating Facebook’s argument, Ek said “several billion people around the world…don’t even have access to a bank account.”

In fact, accidentally defeating the purpose of the Libra, he says, these people – most likely from poorer, developing countries – don’t trust “their governments or other people.”

Quickly realizing his mistake and in full damage control, he “[thinks] blockchain…can facilitate trust.”

What Libra is trying to do is really about creating money on the internet by allowing this thing to go, especially to the place of where people don’t have these opportunities.

People, Ek adds, can purchase everyday common goods using the digital coin, including using WhatsApp to pay for rice.

Then, he says a service “like” Spotify can facilitate direct payments to artists.

The most important thing is it will enable paying for things digitally in many of the places around the world where those kind of methods just [don’t] exist.  A service like Spotify, you can imagine what would happen by allowing users for instance to be able to pay artists directly.

A music fan, for example, in Japan could directly pay an artist in Argentina using the Libra.

That opens up huge opportunities for how we can further our mission.”

Yet, one key question remains.  If, after ten years and a highly successful direct listing (including only one profitable financial quarter), Spotify hasn’t paid artists their fair share, what hope do musicians have following the launch of the Libra their money won’t end up in the already deep pockets of company executives?

 


Featured image by foreverseptember (CC by 2.0).

Spotify Officially Signs On to Support Facebook's New Cryptocurrency — the Libra

According to a leaked report from the Wall Street Journal last week, Spotify had signed on to support Facebook’s cryptocurrency project.

Dubbed the Libra, over two dozen other companies would also support the cryptocurrency.  Each company around $10 million as part of a consortium.

The consortium – known as the Libra Association – will govern the digital coin, ensuring it remains ble and profitable.  Facebook recruited the backers last month to fund the crypto-based payments system.

Now, as expected, the social media company has confirmed the project.

Officially introducing the Calibra and the Libra.

Facebook has formally introduced its new global subsidiary – the Calibra.  The goal of the company is to provide financial services, allowing its 2.4 billion users and others to access and participate in the Libra network.

Launching a separate website for the new cryptocurrency, the social media company explained the purpose of the Libra.

A simple global currency and financial infrastructure that empowers billions of people.

Reinvent money.  Transform the global economy.  So people everywhere can live better lives.

According to Facebook, people have a difficult time saving, sending, and spending money online.  In addition, for people in developing countries, almost half don’t have an active bank account.

The cost of that exclusion is high — approximately 70% of small businesses in developing countries lack access to credit and $25 billion is lost by migrants every year through remittance fees.

Calibra, the new digital wallet for the Libra, will purportedly help users save, send, and spend money.  Using a smartphone, people can send the Libra “to almost anyone” with a smartphone as with a simple text message.  Partnering with over two dozen companies, Facebook wants people to pay bills “with the push of a single button,” buy a cup of coffee with a quick code scan, and even ride local public transportation “without needing to carry cash or a metro pass.”

Calibra will purportedly launch with strong protections and safeguards to keep users’ information and wallets safe.  Dismissing past privacy breaches and high-profile leaks by the company, Facebook vows to never share personal account information or financial data to third parties “without consent.”

Of course, the social media company says these goals could change at any time.

So, why did Spotify sign on as a backer?

Publishing its own blog post, Spotify explained the reason for joining the Libra Association.

According to the music streaming company, executives have worked to create a platform where fans can directly access the audio they want “at any time, anywhere, and at the right price.”  They also want to offer a service with economic bility.

The Libra Association, an independent, non-profit organization, was founded to create a single global currency and the financial infrastructure to “empower” billions of people around the globe.

The company writes,

Libra offers [a] massive opportunity for simple, convenient, and safe payment over the internet (particularly for the 1.7 billion adults worldwide without access to mobile money, a bank account, or a payment card).  We’ve seen this directly in many of the developing markets where we operate.

Plugging the new cryptocurrency, Alex Norström, Spotify’s Chief Premium Business Officer, concludes,

One challenge for Spotify and its users around the world has been the lack of easily accessible payment systems – especially for those in financially underserved markets.  This creates an enormous barrier to the bonds we work to foster between creators and their fans.

“In joining the Libra Association, there’s an opportunity to better reach Spotify’s total addressable market, eliminate friction, and enable payments in mass scale.

Facebook hopes to launch the new cryptocurrency next year.

 


Featured image by Facebook.

Spotify Reportedly Signs On to Support Facebook's New Cryptocurrency, the Libra

Spotify has reportedly jumped on the lengthy backers’ list for Facebook’s new project.

For more than a year, Facebook has quietly worked on a new cryptocurrency dubbed the Libra.  Now, the company has prepared to formally unveil the project this week.

Reportedly launching next year, the social media platform has signed up over two dozen companies who will back the Libra.  According to a leaked list from reputable crypto-news site The Block, supporters include Visa, Mastercard, Lyft, PayPal, and Uber, among many others.

One name, however, sticks out – Spotify.

Venture capitalists, along with the finance, e-commerce, and other companies, will invest $10 million each as part of a consortium.  The consortium – known currently as the Libra Association – will govern the digital coin, ensuring it remains ble and profitable.  Facebook has previously recruited the backers last month to fund the Libra, a crypto-based payments system.

Users, sources told the Wall Street Journal, would send the digital coin to each other.  They will also use the Libra to make payments on Facebook and other websites.

Facebook has yet to lock down agreements with all the major backers, however.  The sources added the consortium’s memberships may also change.

In addition, most major companies have no clue how the Libra will function exactly, nor its value.  Members remain concerned about how Facebook and its users will use the cryptocurrency tokens.  This includes potential money laundering and terrorist financing.

Member companies in the Libra Association may ultimately serve as nodes, allowing them to verify transactions and maintain financial records.  Facebook nor backers, including Spotify, would control the cryptocurrency.  Separating itself from the Libra would also add legal protection for the social media giant against potential liability over how its 2.4 billion users actually use the cryptocurrency.  Yet, Facebook may still “exert considerable control” of the Libra.

The social media giant reportedly wants at least 100 companies to back the Libra.  Other supporters include Stripe Inc. and Argentinian company MercadoLibre.  Facebook has also asked several member companies to back the Libra’s official introduction this week.

 


Featured image by MichaelWuensch (CC by 2.0).

Spotify Unveils Daily Drive, a Personalized Playlist Featuring Music and News

Spotify has unveiled a new feature for your daily commute.

Taking full advantage of its recent podcast acquisitions – – the company has rolled out Daily Drive.

The feature incorporates news podcasts alongside music recommendations.  NPR, The Wall Street Journal, and Public Radio International will provide news audio clips.  Music and news recommendations will update multiple times a day, meaning your evening news and music listening won’t be the same as in the morning.

Daily Drive represents Spotify’s broad efforts to aggressively grow its podcast listener base as well as its podcast offerings.  As described by the music streaming giant, the new feature mixes personalized music with “timely world updates from reputable sources.”

Daily Drive also follows other podcast-centric features.  Last week, the company rolled out human-curated podcasts to around 5% of its users in the UK, United States, Canada, Mexico, Sweden, Colombia, Chile, and Argentina as part of a test.  Podcast themes include comedy, geek culture, motivational walking, and true crime, among others.  With this new feature, Spotify aims to improve podcast discoverability.

Doubling down on its podcast features, the company has also posted a new job listing – News and Documentary Podcast Producer.

Serving in the news and culture lead division in New York, the selected candidate will work as a producer for pre-production, production, and distribution of Spotify’s internal News-focused podcasts.

The job will also include managing and producing content for publication on all platforms as well as audio production.

Based in New York, the selected candidate will report directly to Natalie Tulloch, Spotify’s Director of Planning and Ops in Content Partnerships.

The selected candidate will also have between 5 and 6 years of related work experience serving in the news and documentary community, proficiency with ProTools and Hindenburg, proficiency with presentation decks and data pulls, the ability to maintain a high attention to detail in a fast paced environment, experience recording in a studio setting, excellent interpersonal and communication skills, and the ability to work under pressure and an ease with people from different cultural and educational backgrounds.

People interested in the position can apply directly on Spotify’s website.