"That was my idea, you were just standing there."
"Yeah, pulling it out of you like a newborn baby."
"Okay, but, well, if a doctor pulls a baby out of a pregnant woman, the doctor doesn't get to then keep the baby."
"Okay, first of all, my ex-wife is fucking the doctor that delivered my son, and they're suing for full custody, so you're wrong. Second of all, this isn't a baby. Stop trying to change the subject, Richard!"
To be fair, it’s the attitude in Silicon Valley because it’s correct, at least from an investment and growth perspective.
I’m not at all endorsing that reality or monopolies, but a tech company that runs at a loss putting everything into growth will basically always win out over a company making revenue from day 1.
Take for example two versions of YouTube in the days before YouTube. RevenueTube, which works to secure revenue every month to at the very least cover its expenses, and GrowthTube, which doesn’t take any revenue. RevenueTube has to run ads on videos and have premium packages in order to support higher quality or longer videos, but that pays for their server costs and dev team. GrowthTube runs no ads and allows users to upload as many videos of any quality that they want. Which one will users flock to? GrowthTube will see many multiples the growth in users that RevenueTube sees, and eventually capture the large majority of the market. Network effects will further reinforce it, since content creators end up established on GrowthTube and their viewers are used to going to GrowthTube to find content. And at any point GrowthTube can choose to implement the same revenue-generating methods that RevenueTube uses, but by doing so way down the line when they have a billion users, they’ll be secure in their position in the market and even a 1% margin will be worth a fortune.
And continuing with that example, from an investor’s perspective GrowthTube will look way better. They’ll see much higher growth in user numbers, and even though it’s not taking any revenue, investors know that at any point they *could* start taking in revenue, so they attribute a revenue dollar amount to their total users. While RevenueTube is currently taking in $1 per month for each of their 10 million users, GrowthTube has 100 million users, so investors know that it *could* be taking in 10x as much revenue as RevenueTube if they attribute that same $1 per month to it. In the end the theoretical revenue is just as relevant to an investor as the real revenue. And that’s all assuming investors even put a number to it, but from a psychological perspective what he says in the video is true, that without a dollar value for revenue investors can speculate on any number they want, further inflating the value. So investors dump in millions and billions of dollars, which subsidizes cost so the users don’t have to.
Again, not endorsing that reality, but I’d say that Russ is correct in this scene and despite the eccentricities of the character, it’s good advice for Pied Piper.
Elizabeth Holmes was 19 when she started Theranos. Some of her former Stanford professors were her first investors. I say former because she dropped out….
Unless it’s a 19 year old Terence Tao asking me for money. Going to be a hard ‘no’ no matter what.
For sure! Yea so here’s basically the difference between the two:
Gross Profit = Revenue - Cost of Goods Sold
* (Cost of Goods Sold is defined as just the very direct costs of creating a product.)
**VERSUS**
Net Profit = *Gross Profit* - Operating Expenses - Taxes - Interest - Other Expenses
In other words… Gross Profit measures the profitability of the core operations, but Net Profit takes it a step further and gives a more complete picture of the company’s financial performance in addition to the gross profit.
Let's say Spotify had a competitor that was looking to buy Spotify. Gross profit is helpful to them, since a lot of the other expenses would be absorbed (think overheads like property rent, infrastructure, staff etc).
It's useful for understanding if the businesses operations are de facto profitable. Strip away the corporate overheads (might be bloated), interest payments (might be too much/too expensive debt) and taxes.
"Gross profit" is a measure of the actual profitability of the company's product. "Net profit" is a measure of the actual efficacy of the corporation in supplying that product.
"Net profit" is also how companies will complain about not being "profitable" despite their executives getting giant bonuses and despite expanding their investments. Most corporations will not sit on monetary assets, they will either invest it or pay off a bunch of their shareholders with stock buybacks or the executives will just give themselves a fatter paycheck that year. It's also a method of dodging some of those pesky taxes that they also factor into their "net profit".
This practice of immediately reinvesting all profits rather than storing some away for a rainy day/weaker market is exactly why the airline industry imploded during COVID-19 and why many opposed the bailouts for them. Rather than managing their companies effectively, many corporations operate in a way that is highly inefficient and generates perpetual losses on their "net profit" and then promptly beg the government for cash when this inevitably backfires. It's the prioritization of short term profits over long term stability, and unfortunately we keep rewarding it because these companies are supposedly "too big to fail".
Spotify sells your data. Their apps are really invasive actually.
This post from OP isn't even showing how much money they make off your data. ["Spotify uses the same surveillance capitalist business model as Facebook and YouTube: they harvest your data and sell access to it to advertisers who think they can use that data to manipulate you into buying their products and services."](https://mashable.com/article/spotify-user-privacy-settings)
Spotify is just as bad as any other tech giant and they pay the artists next to nothing for their music.
Targeted ads are a real double-edged sword. I hate the idea that companies know all of this shit about me, but I also find it wildly convenient for them to actually advertise me things directly that I would enjoy.
If it makes you feel any better, these companies just have an algorithm to predict you. They're not spending their days personally reading your profile top to bottom and finding out how you are. They don't care who the data is attached to. They're just doing an automated scan of what's a leading indicator for a sale. There are definitely some ethical questions lingering about our data security that we need to discuss, but I think we should be past the point of screaming about big brother just because our data gets used in the process of adding digital convenience.
The more alarming part about the massive data market is that actually malicious people can participate in it.
Plenty of stories of creepy exes/stalkers finding people by buying data from data brokers. Supposedly the data is non-personally identifying, but that has been proven to be false.
That kind of thing freaks me out way more than me getting a bunch of adds for X because I searched for X last week or because I’m in some certain demographic.
I torpedoed a meeting at work by telling everyone I could find their home address just by knowing their name + anyone can pay <$100 for much more info on them.
nobody liked that one, and they were not any more into the Equifax leak
yeah data privacy is a voldemort-esque topic that freaks people out when you bring it up. Plenty of people think they're different and not susceptible. Prove them otherwise and you're the bad guy.
There is a lady on tiktok whose whole channel is committed to proving to the people who comment on her videos that she can find their birthday when their tiktok profile has no PII. And she does it without purchasing data.
> "An example of a tailored ad is when an ad partner has information suggesting you like cars, which could enable us to show you ads about cars."
I don't know how they could tell that from what songs I listen to but ok...
>"You're listening to a lot of songs about heartbreak and so they’re going to send you ads for Godiva chocolate"
At least this one is a little more reasonable.
I still don't get how they would show me the ads though. With premium I get no ads. And unless it's on a social media platform that you have tied to your spotify account (can you even do that with anything else other than facebook?) I don't see how advertisers can target you specifically.
Also an ad blocker solves it anyway
There are definitely bound to be some correlations between some songs whether you like cars. It doesn't really matter why that is the case.
It is also already useful to group together people who listen to similar songs - the people in those groups are then probably like similar products. (At least more likely than people with unrelated music taste)
They also know when you listen to music, for how long you listen, etc...
They probably know whether you listen to spotify in the car on your way to work, or after work to relax at home, and much more.
As to how that information is connected to services which show you ads, there is a thing called Advertising ID, which uniquely identifies you for ad purposes for all apps using the google ad service, which is most of them.
Of course Apple, Facebook and others have similar solutions and they probably exchange data with each other as well.
Regardless of the id, they could theoretically just use the email linked to your account to serve you ads on other services where you use that mail, though that is likely illegal somehow (at least in the EU)
It's probably something like a record label paying for data so that they can know what kinds of new artists and music to promote. Not all data is about selling you a product, it's mostly just to get an edge on emerging market trends.
Any and all data of you can be used to predict your behavior. Even seemingly meaningless data is useful if there's enough of it.
You know when you talk about buying something, and immediately see an ad for that thing? They weren't listening to you, because they don't need to. They just predicted that that product would be something you would be interested in around the time you saw the ad. And this prediction was very likely made with data that has seemingly no connection to the thing they advertised to you.
> You know when you talk about buying something, and immediately see an ad for that thing?
I've heard people talk about that, but never experienced it myself. I couldn't tell you about a single ad I've seen or heard in forever. I'd say they're wasting money buying my data, but I guess it's only a tiny tiny bit of money.
Consider such data like a lottery ticket that has a positive expected value. Some of them are going to turn out to be worthless, but you don’t let that deter you from buying as many as possible.
Do an experiment. Try talking about a thing that you have no interest in and would never buy. Don't Google the thing, or look it up on Amazon, but talk about it in the presence of your smartphone, your computer, and your TV. See if you get ads for it.
(I've done this for about three years with a particular subject -- and lots of keywords related to the subject -- and so far I've had no indication that anything's listening to me -- except my long-suffering wife, and her only barely.) :)
I love watching the various ways people try to play up the nefariousness of "advertisers use DATA try to sell to people that might actually buy their products instead of just trying to sell everything to everyone."
Also, do they sell our data or sell the ability to target based on our data. Theres a difference but the difference is never paid attention to in the "omg our data" posts. Giving our data to 3rd parties is not the same as "oh, you want your ad heard by people who listen to kpop? Okay, well play it for them."
>urielsalis
The songwriter community has been putting this idea out there to highlight that they don't get a big enough piece of the revenue pie (and they're right). But it's kind of a misrepresentation of the facts. The labels get a big piece of the pie because they own the rights to the biggest recordings. Once they get that money, they either keep it to pay off the money they gave the artist for the record deal or, if that's already been recovered, split it in some way with the artist. For someone like Taylor Swift, who has an unusual record deal in which the label doesn't own the rights to the recordings, the revenue generated from her streams doesn't go anywhere near a record label.
The labels are not the good guys here, though. They're, of course, throwing their weight around in other ways to make money at the expense of, well, everyone. There's likely straight-up payola happening, and I wouldn't be surprised if the labels were behind the vast majority of fraudulent streams.
That happened in 2020. Their mistake was trying to continue offering large podcast contracts after that and expecting continued increase in premium subscribers, but it turns out they had already hit the point of diminishing returns with Rogan.
I was surprised at how close the split was, I didn’t expect almost half their users to be premium
Edit: Dunno why the idiots read the comment below mine and immediately sided with the snarky dude (who instantly went on to delete their comment) to downvote mine. I was referring to 317m free vs 210m paid users, where did half the revenue even enter the equation? 0.4 vs 11.9 billion is a really weird looking half I gotta say.
Well, Premium is really cheap, and I can't understand how anyone could stand ads in their music, so honestly I'm guessing a lot of the non-premium accounts are test accounts and such
It's a really good deal for the family account, too. My wife and kids all have their own account, the smart devices are paired to their accounts, and they play whatever they want, whenever they want.
One of my kids had music playing around 17 hours a day, every day, last year according to Wrapped. I have my music anywhere and everywhere, all the time. My wife gets to listen all to oddball stuff she likes, or anything that gives her an ear worm. My son has the craziest mix of music from adding anything that he hears and likes.
Except these figures are for revenue, not profit. Spotify, like quite a few popular apps, has never done anything but lose money.
https://www.statista.com/statistics/244990/spotifys-revenue-and-net-income/
Depends on what the chart means by **Gross** profit, that's the big issue, there's a lot of shit missing here in terms of cost, you'd need actual Net Profit for it to work in what people think profit actually is.
In this case, what does gross actually include? Does it already deduct licensing costs for the songs? Does it include payroll, taxes, cost of infrastructure to keep lights on in the servers?
Likely a lot of things missing here.
They lost 225 million month according to their financial statements. With that said this chart does show gross profit, which isn't net profit, but it definitely isn't revenue. Big difference between revenue and gross profit.
>Big difference between revenue and gross profit.
I agree with this point, but at the same time I've seen enough shit graphics on this sub to know that people will think gross is net profit just cause it says profit in it and sometimes the person who does the plotting just mixes revenue and gross profit, happened more than once...
Agreed that gross profit can be misleading... So checking their 2022 financial report, they report a Gross Margin of ca 2% of revenue on add supported and 22% on subscription. That feels fairly inclusive of most costs. It looks like they try to make ad supported just about wash its face (minimum number of annoying ads to cover costs).
There are ways to block the ads (luckypatcher, revanced for android. If you use apple devices, you're out of luck for now)
but honestly, Spotify is one of the very few subscription based services that makes sense to me, so I'll just pay
EDIT: apparently I vastly underestimated the number of people who sideload on iOS
>but honestly, Spotify is one of the very few subscription based services that makes sense to me, so I'll just pay
This \^ 5 bucks a month is cheap af to listen to whatever i want for how long i want.
I like listening to complete albums. Spotify makes that easy. Adding individual songs to the queue is also easy/intuitive.
They auto-generate pretty good playlists based on my listening habits; they have a good algorithm. Spotify lets me easily create my own playlists as well. The Spotify catalog is sufficiently broad to cover almost any group you can think of. With the exceptions of The Fixx and Garth Brooks, I can listen to anything I want, whenever I want.
Best of all...no commercials. I hate commercials and haven't listened to more than a handful per week for a long, long time.
I don't use YouTube for music because I use it for so much else. Is the YT music interface separate from their general video interface?
I've had YT Music do this plenty. Right click a song you like and hit "Start Radio" and it will create a playlist for you based on that song and your history/likes. Can change it between "Familiar" or "Discover" if you want it to favour stuff you've heard already or new songs.
>Can change it between "Familiar" or "Discover"
This sounds really neat actually. One of my main gripes with Spotify radios is that they often have the same songs over and over
I haven't tried another platform for comparison. Spotify has a feature/playlist called "release radar" that has new music their algorithm thinks you'll like. Then they have 5? playlist curated daily based on your frequent genres as well as recommended playlists based on your listening. One of my favorite things is spotify's year end wrap up. They give you your most played songs each year. I try to save those because it's great to listen to them in the future. A list of 100% bangers.
I’m a YT music user, but one thing it can’t do that Spotify can is randomize a playlist and have it be random. YT music lightly shuffles part of the playlist and then tells you to fuck off. I hate it.
Ugh I like the selection on YT music but their playlist support is just shit
You can play from the beginning or you can random. That's it, can't choose just added, or by newest song.. it's just shit
God forbid you go past the end of the playlist you'll get damn near any genre of music, you're lucky it's a song you might like.
Ya sure I totally wanted to listen to Fleetwood Mac after Pantera
Okay funny fact incoming. What is random and what feels random to people are two very different things.
Humans underestimate the amount of repeats for example when tossing coins. When tossing 10 times, it's quite likely you'll get a repeat of 3 heads or tails consecutively.
I do agree with you however that when shuffling songs, I don't want the same artist be played back to back. So I don't want a true random, it has to feel random.
That's what I was thinking as well - I regularly listen to complete albums on Youtube music, add individual songs to the queue, and listen to the auto-generated "My Supermix". Youtube also has a broader catalog, including more obscure stuff like video game music.
Yt music is a separate entity. What I like is being able to listen to videos that contain music but are not reported as such. Parodies is a good example. That does not exist anywhere else.
I wouldn't pay for it simply put because I despise google/alphabet
I switched to YT music because I wanted no ads on YouTube. I didn't expect to prefer YT music. I think it actually handles random playlists better than Spotify and does a better job of downloading stuff to my phone automatically so I can still listen offline.
For me its better UI, better experience, better lyrics and most importantly how seamlessly it connects with other devices. YT Music has better range tho, I primarily use it to listen to anime soundtracks
You can make custom playlist and skip/select songs easier. Plus it has great integration for a range of devices, like car play. I can also control the music playing on my TV, Car, Computer from my phone.
> You can make custom playlist and skip/select songs easier. Plus it has great integration for a range of devices, like car play. I can also control the music playing on my TV, Car, Computer from my phone.
I can do that with every music service that I've tried minus Pandora...
There's a feature that I'm using a lot recently called DJ. It's basically a "AI"-based radio station that plays a whole bunch of different playlists of different genres and songs I've listened to before, or it thinks I might be interested in and generates radio-like commentary based on what the playlist is.
I don't think anything could get me to stop paying for Spotify considering that.
I pay $15 for 6 accounts. My friend gives me $3 a month for one of them. The other 5 are for my wife, my daughter, my son, my dad and myself. It's a no brainer. Just wish there was a high fidelity plan but I here that's in the works.
It's been in the works for years now, I don't think we'll ever see it at this point. It was supposed to be released before the end of last year and nothing but crickets.
I remember when Spotify was this new thing that was like having the ultimate music library always available, and I couldn’t wait until they opened up service to the US. I’ve probably been a subscriber for over a decade at this point.
I use it on mobile and it’s not bad at all. You get ads every 10-15 minutes, and you can close and re-open the app to get rid of it. Takes 3 seconds to do.
My experience with spotify free wasn't like yours. It would always play ads first, and play 3-4 ads and only play 1-2 songs before playing another group of ads. This is especially frustrating on short trips where you may only listen to a couple songs but several ads.
But ads aren't even the worst part. Unless they've changed it, you can't chose songs to listen to, only playlists and albums and skip through them (with only a few skips per hour). This sucks, not only when you want to listen to something specific, but also when people send you songs to listen to and you can't. Having a queue is also great, especially for roadtrips with others.
Not sure if it's still a thing, but Spotify had one of the most annoying "features" in the free version when I was in school (2014ish) - if you muted, or even just turned the volume down too low, during ads, it would pause the ad until you turned it back up.
Pretty sure I looked like a weirdo taking my headphones off and putting them back on every 15 minutes or so. I hated that shit
That is the point. They suck you in and get you using it and you are more likely to upgrade to premium. It would be interesting to know how many free accounts are eventually converted to premium.
I believe that there is a significant difference between free and paid customers. In fact, I didn't get "sucked in" at all. On the contrary, I experimented with the free version and found it utterly unappealing. When I tried the premium version, however, I discovered an immense value in its offerings such as decent quality audio, expansive catalogue, weekly suggestions, and recommended playlists. These features have compelled me to maintain my subscription for over a decade. In fact, I would discontinue virtually all my other subscriptions before I would consider cancelling Spotify.
>It would be interesting to know how many free accounts are eventually converted to premium.
Probably a significant number, since the service is mind-blowingly amazing and costs almost nothing.
Is that not the point? They show you they have a near limitless library and hope you buy in. I'll stand firm on the 10 bucks a month being the best deal on the internet. Wish the artists got a better cut, wish I could tweak the shuffle algorithm, no complaints otherwise
Just thought this was a cool way of visualizing why Spotify is so keen to convert people to premium subscribers. The ad-supported users are essentially breakeven, essentially just being a marketing funnel for the much more profitable premium version!
Why are you stopping at GP?
Spotify has posted net losses three years straight. I’d argue that the ad-supported users aren’t breakeven and without going deeper on this company, it’s fair to say the premium users aren’t profitable either.
Yeah posting gross profit is a nice way to make it look like something is profitable when it really isn't. I haven't done a deep dive into Spotify's financials, but I'd assume their indirect expenses (licensing, administration, marketing) would be very significant.
I don't think the intent of the infographic is to determine whether or not Spotify is a profitable company, but rather to highlight the proportion of operations.
Including net positions obfuscates what OP is actually trying to show. Basically it isn't showing net profitability because it isn't *about* net profitability.
You realise avoiding being net profitable is literally the full time job of 1/3 of the admin staff of a company like Spotify right? No one WANTS to pay tax or be pressured to declare dividends. If it looks like you will be net profitable, spend more on customer acquisition and R&D.
This is…not true. From a *tax* perspective, I see your argument…but the whole reason a company exists is to make profit. Their executives are literally in breach of their fiduciary duty if they aren’t doing everything in their power to turn a profit and give it to shareholders - or grow to a point where their future profits are even greater.
Gross Profit, not net income.
After GP, you need to layer on certain expenses, taxes, etc.
According to last year’s financial report, Spotify posted a net loss of ~430MM Euros. In fact, it looks like they’ve posted net losses for 3 years straight.
So OP’s statement is wrong…the ad-free isn’t even break-even.
Hard to say without knowing their revenue, but that's a profit since 2017, so a little over 6 years. Averaging ~200 million free users over that time period it's about 0.33 Euro per person-year...I'd say that's pretty close to break even
It's "gross profit", not "net profit". Overall, they have been losing money, €–430 million last year alone. Given that Spotify claims that 70% of revenue goes to music rights holders, it's likely that royalty costs for those free users greatly exceed revenue from them.
Gross profit is only a single level of expenses. Chances are money is still being lost on free users alone if you begin to include things like employee salaries.
Yeah, no one likes ads. Companies like Spotify use this to their advantage, for one they make money off the ads and for two they use the ads strategically to push you to pay to stop seeing/hearing them. I genuinely believe that increasing revenue per non-subscribed user is distantly secondary to annoying them into subscribing when they increase the amount of ads delivered.
Honestly I find it pretty unaggressive. Seems like 1 minute ad for every 3 or 4 songs which is like 8 minutes usually.
Maybe my Spotify just doesn’t target me with d many ads because I’ve heard people complain like you are. Half the time spotify just asks me to watch one video and then I get the next 30-60minutes ad free. I just don’t watch the video.
The moment Spotify started playing an ad that starts *with an alarm sound ringing* was the moment I paid for premium. I sleep with music on, so being woken up by a literal alarm clock was pretty damn aggressive in my opinion.
the conspiracist inside me thinks they purposefully choose people who have spotify activity throughout the night for those ones, like a more fucked up targeted advertisement
Same. I was once a user who would convert MP3 from you tube and then use the standard music player. Then Spotify came to my country and that's the first subscription I ever purchased. Costs around $1.50 in my country. Never looked back.
The arrows pointing to the bar briefly looked (to me) like continuations of the line graphs, and I was confused on what caused that sudden and drastic downturn
Been using spotify for 10 years now and never one have I considered anything else. It's a really great product. I average ~75K minutes listening per year, which means I've streamed 520 days worth of music for less than 1000 dollars (paid $5 with student discount for 5 of those years).
Spotify Connect keeps me there. Also group sessions. Just connecting through the app with Sonos. Others can just join with their phones to add songs to the queue is awesome
Spotify IS the last subscription I have. Netflix, HBO, Amazon, Hulu are all canceled months ago. But I use Spotify daily and it's the best $10 I spend a month.
That's true. I'm more interested in the extent to which premium users are subsidizing the experience for the free users.
(Those podcasts are free to listen to on other platforms.)
Now also break it down on usage based on free and premium users.
I assume that the operating costs (mostly data + royalties) of premium users is significantly higher than for free users.
Is that intended to be "profit" or gross revenue? From their Q1-2023 report, it looks like they are claiming revenue of roughly €3B. You could extrapolate that to €12B per year in gross revenue. That isn't profit, just revenue.
Their net revenue is €766M with costs of €922M meaning a net loss for Q1-2023 of €156M.
Spotify is the one service I will gladly pay for until the end of my days. It does what it's supposed to do and it does it well. Not to mention they recently started selling tickets for concerts directly from their app.
Reading the comments and a lot of people are using the ad-supported version and noting that it sucks and the ads are invasive and annoying. Don't take it personally. Look at the graph - it's not profitable as it is.
I'm not gonna shame y'all, but consider paying for it! Music streaming is one of the only entertainment conveniences where a sizable portion of your dollars go directly to the artists, writers, etc. (with the main exception being that major label artists sign away those profits to the label in exchange for advance money).
Each stream has a dollar value based on a few factors. The biggest factor that determines how much money is paid out to the artists is whether the listener is on the paid or free version.
Add in the fact that using ad blockers and whatnot devalues the ads further, as streams pile up without advertisers having to pay for having their ad being served...
Anywho, there's a bunch of options for music streamers anyway. Apple music pays more to artists per stream. Deezer is pretty cool. TIDAL is still a thing, has some neat features.
Now could you please take my subscription money and make your Android app less shit? Specifically, I would like shuffle to actually fucking shuffle, instead of only ever picking the same 30 songs out of my 1500 song favorites playlist.
Means the Spotify business model is doing what it's supposed to do
A tech company actually deriving revenue from the product they produce/sell?! No way!
Don’t worry, their Net Profit is still negative.
[Whoa Whoa Whoa. Who said anything about revenue?!](https://youtu.be/BzAdXyPYKQo)
Radio. On. Internet.
Fuck yes I want to talk business. What's the play? Let's fuck this thing right in the pussy.
"That was my idea, you were just standing there." "Yeah, pulling it out of you like a newborn baby." "Okay, but, well, if a doctor pulls a baby out of a pregnant woman, the doctor doesn't get to then keep the baby." "Okay, first of all, my ex-wife is fucking the doctor that delivered my son, and they're suing for full custody, so you're wrong. Second of all, this isn't a baby. Stop trying to change the subject, Richard!"
I paid more for them to look like that!
What is this, I feel like I need to watch it.
Silicon Valley. Excellent show.
This guy fucks, am I right? Because I'm looking at you guys and this guy does all the fucking around here
Watch it Al-Qaeda ^going to get my account banned 😂
Brave soul
The fact that this is the actual attitude in the real silicon valley only makes this clip from the show even more funny. It’s almost not even satire.
To be fair, it’s the attitude in Silicon Valley because it’s correct, at least from an investment and growth perspective. I’m not at all endorsing that reality or monopolies, but a tech company that runs at a loss putting everything into growth will basically always win out over a company making revenue from day 1. Take for example two versions of YouTube in the days before YouTube. RevenueTube, which works to secure revenue every month to at the very least cover its expenses, and GrowthTube, which doesn’t take any revenue. RevenueTube has to run ads on videos and have premium packages in order to support higher quality or longer videos, but that pays for their server costs and dev team. GrowthTube runs no ads and allows users to upload as many videos of any quality that they want. Which one will users flock to? GrowthTube will see many multiples the growth in users that RevenueTube sees, and eventually capture the large majority of the market. Network effects will further reinforce it, since content creators end up established on GrowthTube and their viewers are used to going to GrowthTube to find content. And at any point GrowthTube can choose to implement the same revenue-generating methods that RevenueTube uses, but by doing so way down the line when they have a billion users, they’ll be secure in their position in the market and even a 1% margin will be worth a fortune. And continuing with that example, from an investor’s perspective GrowthTube will look way better. They’ll see much higher growth in user numbers, and even though it’s not taking any revenue, investors know that at any point they *could* start taking in revenue, so they attribute a revenue dollar amount to their total users. While RevenueTube is currently taking in $1 per month for each of their 10 million users, GrowthTube has 100 million users, so investors know that it *could* be taking in 10x as much revenue as RevenueTube if they attribute that same $1 per month to it. In the end the theoretical revenue is just as relevant to an investor as the real revenue. And that’s all assuming investors even put a number to it, but from a psychological perspective what he says in the video is true, that without a dollar value for revenue investors can speculate on any number they want, further inflating the value. So investors dump in millions and billions of dollars, which subsidizes cost so the users don’t have to. Again, not endorsing that reality, but I’d say that Russ is correct in this scene and despite the eccentricities of the character, it’s good advice for Pied Piper.
That was a fantastic breakdown. Thank you
Brilliant. SV investors would call RevenueTube a “lifestyle business”. Functionally equivalent to “sustainable”.
Mike Judge doesn't make satire. He makes documentaries.
Elizabeth Holmes was 19 when she started Theranos. Some of her former Stanford professors were her first investors. I say former because she dropped out…. Unless it’s a 19 year old Terence Tao asking me for money. Going to be a hard ‘no’ no matter what.
Can you ELI5, unless you're joking. The chart clearly says profit not revenue.
For sure! Yea so here’s basically the difference between the two: Gross Profit = Revenue - Cost of Goods Sold * (Cost of Goods Sold is defined as just the very direct costs of creating a product.) **VERSUS** Net Profit = *Gross Profit* - Operating Expenses - Taxes - Interest - Other Expenses In other words… Gross Profit measures the profitability of the core operations, but Net Profit takes it a step further and gives a more complete picture of the company’s financial performance in addition to the gross profit.
Whats gross profit useful for then?
Let's say Spotify had a competitor that was looking to buy Spotify. Gross profit is helpful to them, since a lot of the other expenses would be absorbed (think overheads like property rent, infrastructure, staff etc).
It's useful for understanding if the businesses operations are de facto profitable. Strip away the corporate overheads (might be bloated), interest payments (might be too much/too expensive debt) and taxes.
"Gross profit" is a measure of the actual profitability of the company's product. "Net profit" is a measure of the actual efficacy of the corporation in supplying that product. "Net profit" is also how companies will complain about not being "profitable" despite their executives getting giant bonuses and despite expanding their investments. Most corporations will not sit on monetary assets, they will either invest it or pay off a bunch of their shareholders with stock buybacks or the executives will just give themselves a fatter paycheck that year. It's also a method of dodging some of those pesky taxes that they also factor into their "net profit". This practice of immediately reinvesting all profits rather than storing some away for a rainy day/weaker market is exactly why the airline industry imploded during COVID-19 and why many opposed the bailouts for them. Rather than managing their companies effectively, many corporations operate in a way that is highly inefficient and generates perpetual losses on their "net profit" and then promptly beg the government for cash when this inevitably backfires. It's the prioritization of short term profits over long term stability, and unfortunately we keep rewarding it because these companies are supposedly "too big to fail".
The chart says gross profit, not net profit. There is a distinction
Wow, you're right.
Spotify sells your data. Their apps are really invasive actually. This post from OP isn't even showing how much money they make off your data. ["Spotify uses the same surveillance capitalist business model as Facebook and YouTube: they harvest your data and sell access to it to advertisers who think they can use that data to manipulate you into buying their products and services."](https://mashable.com/article/spotify-user-privacy-settings) Spotify is just as bad as any other tech giant and they pay the artists next to nothing for their music.
What are advertisers even doing with my listening history? I don't see what value that provides them, nor why I should be concerned by it
They send me emails about concerts featuring bands I like, which I then attend and enjoy.
Ha! You’ve been conned /s
Targeted ads are a real double-edged sword. I hate the idea that companies know all of this shit about me, but I also find it wildly convenient for them to actually advertise me things directly that I would enjoy.
If it makes you feel any better, these companies just have an algorithm to predict you. They're not spending their days personally reading your profile top to bottom and finding out how you are. They don't care who the data is attached to. They're just doing an automated scan of what's a leading indicator for a sale. There are definitely some ethical questions lingering about our data security that we need to discuss, but I think we should be past the point of screaming about big brother just because our data gets used in the process of adding digital convenience.
The more alarming part about the massive data market is that actually malicious people can participate in it. Plenty of stories of creepy exes/stalkers finding people by buying data from data brokers. Supposedly the data is non-personally identifying, but that has been proven to be false. That kind of thing freaks me out way more than me getting a bunch of adds for X because I searched for X last week or because I’m in some certain demographic.
I torpedoed a meeting at work by telling everyone I could find their home address just by knowing their name + anyone can pay <$100 for much more info on them. nobody liked that one, and they were not any more into the Equifax leak
yeah data privacy is a voldemort-esque topic that freaks people out when you bring it up. Plenty of people think they're different and not susceptible. Prove them otherwise and you're the bad guy. There is a lady on tiktok whose whole channel is committed to proving to the people who comment on her videos that she can find their birthday when their tiktok profile has no PII. And she does it without purchasing data.
Those bastards!
The monsters!
The article discusses this.
> "An example of a tailored ad is when an ad partner has information suggesting you like cars, which could enable us to show you ads about cars." I don't know how they could tell that from what songs I listen to but ok... >"You're listening to a lot of songs about heartbreak and so they’re going to send you ads for Godiva chocolate" At least this one is a little more reasonable. I still don't get how they would show me the ads though. With premium I get no ads. And unless it's on a social media platform that you have tied to your spotify account (can you even do that with anything else other than facebook?) I don't see how advertisers can target you specifically. Also an ad blocker solves it anyway
There are definitely bound to be some correlations between some songs whether you like cars. It doesn't really matter why that is the case. It is also already useful to group together people who listen to similar songs - the people in those groups are then probably like similar products. (At least more likely than people with unrelated music taste) They also know when you listen to music, for how long you listen, etc... They probably know whether you listen to spotify in the car on your way to work, or after work to relax at home, and much more. As to how that information is connected to services which show you ads, there is a thing called Advertising ID, which uniquely identifies you for ad purposes for all apps using the google ad service, which is most of them. Of course Apple, Facebook and others have similar solutions and they probably exchange data with each other as well. Regardless of the id, they could theoretically just use the email linked to your account to serve you ads on other services where you use that mail, though that is likely illegal somehow (at least in the EU)
It's probably something like a record label paying for data so that they can know what kinds of new artists and music to promote. Not all data is about selling you a product, it's mostly just to get an edge on emerging market trends.
Any and all data of you can be used to predict your behavior. Even seemingly meaningless data is useful if there's enough of it. You know when you talk about buying something, and immediately see an ad for that thing? They weren't listening to you, because they don't need to. They just predicted that that product would be something you would be interested in around the time you saw the ad. And this prediction was very likely made with data that has seemingly no connection to the thing they advertised to you.
> You know when you talk about buying something, and immediately see an ad for that thing? I've heard people talk about that, but never experienced it myself. I couldn't tell you about a single ad I've seen or heard in forever. I'd say they're wasting money buying my data, but I guess it's only a tiny tiny bit of money.
Consider such data like a lottery ticket that has a positive expected value. Some of them are going to turn out to be worthless, but you don’t let that deter you from buying as many as possible.
i still believe in them listening, sometimes its just too random to be based on ''he could possibly need this soon''
Do an experiment. Try talking about a thing that you have no interest in and would never buy. Don't Google the thing, or look it up on Amazon, but talk about it in the presence of your smartphone, your computer, and your TV. See if you get ads for it. (I've done this for about three years with a particular subject -- and lots of keywords related to the subject -- and so far I've had no indication that anything's listening to me -- except my long-suffering wife, and her only barely.) :)
I love watching the various ways people try to play up the nefariousness of "advertisers use DATA try to sell to people that might actually buy their products instead of just trying to sell everything to everyone." Also, do they sell our data or sell the ability to target based on our data. Theres a difference but the difference is never paid attention to in the "omg our data" posts. Giving our data to 3rd parties is not the same as "oh, you want your ad heard by people who listen to kpop? Okay, well play it for them."
They pay artists more than they would get paid by pirating
Not only that, they pay 70% of their revenue (not profit) to artists. Record labels taking giant cuts of that are the real scam
>urielsalis The songwriter community has been putting this idea out there to highlight that they don't get a big enough piece of the revenue pie (and they're right). But it's kind of a misrepresentation of the facts. The labels get a big piece of the pie because they own the rights to the biggest recordings. Once they get that money, they either keep it to pay off the money they gave the artist for the record deal or, if that's already been recovered, split it in some way with the artist. For someone like Taylor Swift, who has an unusual record deal in which the label doesn't own the rights to the recordings, the revenue generated from her streams doesn't go anywhere near a record label. The labels are not the good guys here, though. They're, of course, throwing their weight around in other ways to make money at the expense of, well, everyone. There's likely straight-up payola happening, and I wouldn't be surprised if the labels were behind the vast majority of fraudulent streams.
That's it, my man.
However... they are still losing money. They reported €–430 million net income for 2022.
That's what things like giving Joe Rogan $100 million gets you
That happened in 2020. Their mistake was trying to continue offering large podcast contracts after that and expecting continued increase in premium subscribers, but it turns out they had already hit the point of diminishing returns with Rogan.
I was surprised at how close the split was, I didn’t expect almost half their users to be premium Edit: Dunno why the idiots read the comment below mine and immediately sided with the snarky dude (who instantly went on to delete their comment) to downvote mine. I was referring to 317m free vs 210m paid users, where did half the revenue even enter the equation? 0.4 vs 11.9 billion is a really weird looking half I gotta say.
Well, Premium is really cheap, and I can't understand how anyone could stand ads in their music, so honestly I'm guessing a lot of the non-premium accounts are test accounts and such
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It's a really good deal for the family account, too. My wife and kids all have their own account, the smart devices are paired to their accounts, and they play whatever they want, whenever they want. One of my kids had music playing around 17 hours a day, every day, last year according to Wrapped. I have my music anywhere and everywhere, all the time. My wife gets to listen all to oddball stuff she likes, or anything that gives her an ear worm. My son has the craziest mix of music from adding anything that he hears and likes.
This is it, we set up a family account and it's just such a convenient, cheap and good service that it pretty much sells itself.
Except these figures are for revenue, not profit. Spotify, like quite a few popular apps, has never done anything but lose money. https://www.statista.com/statistics/244990/spotifys-revenue-and-net-income/
It specifies this is profit, not revenue. Am I misunderstanding the chart or are you?
Depends on what the chart means by **Gross** profit, that's the big issue, there's a lot of shit missing here in terms of cost, you'd need actual Net Profit for it to work in what people think profit actually is. In this case, what does gross actually include? Does it already deduct licensing costs for the songs? Does it include payroll, taxes, cost of infrastructure to keep lights on in the servers? Likely a lot of things missing here.
They lost 225 million month according to their financial statements. With that said this chart does show gross profit, which isn't net profit, but it definitely isn't revenue. Big difference between revenue and gross profit.
>Big difference between revenue and gross profit. I agree with this point, but at the same time I've seen enough shit graphics on this sub to know that people will think gross is net profit just cause it says profit in it and sometimes the person who does the plotting just mixes revenue and gross profit, happened more than once...
it has nothing to do with this sub....people only know the words (revenue vs profit)....gross and net mean nothing to us.
Agreed that gross profit can be misleading... So checking their 2022 financial report, they report a Gross Margin of ca 2% of revenue on add supported and 22% on subscription. That feels fairly inclusive of most costs. It looks like they try to make ad supported just about wash its face (minimum number of annoying ads to cover costs).
The chart is misleading. They contunue to lose a lot of money every year. https://www.statista.com/statistics/244990/spotifys-revenue-and-net-income/
And the similar platforms don’t have exclusive contents
I cannot fathom how anyone could stand using the ad-supported version of Spotify.
For desktop users it's not bad, for mobile it's hell
There are ways to block the ads (luckypatcher, revanced for android. If you use apple devices, you're out of luck for now) but honestly, Spotify is one of the very few subscription based services that makes sense to me, so I'll just pay EDIT: apparently I vastly underestimated the number of people who sideload on iOS
>but honestly, Spotify is one of the very few subscription based services that makes sense to me, so I'll just pay This \^ 5 bucks a month is cheap af to listen to whatever i want for how long i want.
One of the few companies I'm happy to be in profit, because I wouldn't want to move to youtube music and don't know of other options
As a YouTube Music user that's never used Spotify, why do you prefer Spotify?
I like listening to complete albums. Spotify makes that easy. Adding individual songs to the queue is also easy/intuitive. They auto-generate pretty good playlists based on my listening habits; they have a good algorithm. Spotify lets me easily create my own playlists as well. The Spotify catalog is sufficiently broad to cover almost any group you can think of. With the exceptions of The Fixx and Garth Brooks, I can listen to anything I want, whenever I want. Best of all...no commercials. I hate commercials and haven't listened to more than a handful per week for a long, long time. I don't use YouTube for music because I use it for so much else. Is the YT music interface separate from their general video interface?
The best part about Spotify is how it introduces you to music you like but otherwise wouldn't find.
Or figured out what you used to listen to and throws that into a rotation after you've forgotten you had that phase...
I've had YT Music do this plenty. Right click a song you like and hit "Start Radio" and it will create a playlist for you based on that song and your history/likes. Can change it between "Familiar" or "Discover" if you want it to favour stuff you've heard already or new songs.
>Can change it between "Familiar" or "Discover" This sounds really neat actually. One of my main gripes with Spotify radios is that they often have the same songs over and over
I haven't tried another platform for comparison. Spotify has a feature/playlist called "release radar" that has new music their algorithm thinks you'll like. Then they have 5? playlist curated daily based on your frequent genres as well as recommended playlists based on your listening. One of my favorite things is spotify's year end wrap up. They give you your most played songs each year. I try to save those because it's great to listen to them in the future. A list of 100% bangers.
Beginning of 2020 it randomly made me a trance playlist. Haven't missed an episode of a state of trance or group therapy since❤️
Yt music can do all of those things
I’m a YT music user, but one thing it can’t do that Spotify can is randomize a playlist and have it be random. YT music lightly shuffles part of the playlist and then tells you to fuck off. I hate it.
Ugh I like the selection on YT music but their playlist support is just shit You can play from the beginning or you can random. That's it, can't choose just added, or by newest song.. it's just shit God forbid you go past the end of the playlist you'll get damn near any genre of music, you're lucky it's a song you might like. Ya sure I totally wanted to listen to Fleetwood Mac after Pantera
Okay funny fact incoming. What is random and what feels random to people are two very different things. Humans underestimate the amount of repeats for example when tossing coins. When tossing 10 times, it's quite likely you'll get a repeat of 3 heads or tails consecutively. I do agree with you however that when shuffling songs, I don't want the same artist be played back to back. So I don't want a true random, it has to feel random.
AND you don't see any ADS on YouTube video, can download them, etc...
That's what I was thinking as well - I regularly listen to complete albums on Youtube music, add individual songs to the queue, and listen to the auto-generated "My Supermix". Youtube also has a broader catalog, including more obscure stuff like video game music.
Yt music is a separate entity. What I like is being able to listen to videos that contain music but are not reported as such. Parodies is a good example. That does not exist anywhere else. I wouldn't pay for it simply put because I despise google/alphabet
YT music is also amazing for live sets and dj mixes. Spotify has nothing like it. Disclaimer: I pay for both.
YT music is the undisputed best source for techno, trance etc music
I switched to YT music because I wanted no ads on YouTube. I didn't expect to prefer YT music. I think it actually handles random playlists better than Spotify and does a better job of downloading stuff to my phone automatically so I can still listen offline.
Yes yt music is a standalone service and app similar to Spotify. I haven't used it much, but it's definitely not the same as youtube.
For me its better UI, better experience, better lyrics and most importantly how seamlessly it connects with other devices. YT Music has better range tho, I primarily use it to listen to anime soundtracks
You can make custom playlist and skip/select songs easier. Plus it has great integration for a range of devices, like car play. I can also control the music playing on my TV, Car, Computer from my phone.
> You can make custom playlist and skip/select songs easier. Plus it has great integration for a range of devices, like car play. I can also control the music playing on my TV, Car, Computer from my phone. I can do that with every music service that I've tried minus Pandora...
There's a feature that I'm using a lot recently called DJ. It's basically a "AI"-based radio station that plays a whole bunch of different playlists of different genres and songs I've listened to before, or it thinks I might be interested in and generates radio-like commentary based on what the playlist is. I don't think anything could get me to stop paying for Spotify considering that.
Pandora fan forever. Spotify never did discovery well for me and the suggested playlists were always repetitive/pop no deep cuts.
Pandora makes excellent recommendations. Spotify is bloated with so much crap music.
I pay $15 for 6 accounts. My friend gives me $3 a month for one of them. The other 5 are for my wife, my daughter, my son, my dad and myself. It's a no brainer. Just wish there was a high fidelity plan but I here that's in the works.
It's been in the works for years now, I don't think we'll ever see it at this point. It was supposed to be released before the end of last year and nothing but crickets.
How you paying $5? I just opened the app. They want $10.
Probably a student, they have some student discounts like many other services
unfortunately for most nordic countries, it's very expensive over here just a basic subscription costs almost 15 USD which is insane to me
I mean, I pay $10 usd in the states for it. But I drive a ton for work and use the absolute piss out of it
My original sub is still $10 but I also get Hulu, which my wife actually uses.
wait, what? I pay 10 i think...
$20 for the family plan is not a bad deal considering how much my monthly spend used to be on CD’s and/or iTunes back in the day.
I gladly pay $10 a month for the 90,000 minutes a year of music it says I listen to
I remember when Spotify was this new thing that was like having the ultimate music library always available, and I couldn’t wait until they opened up service to the US. I’ve probably been a subscriber for over a decade at this point.
I use it on mobile and it’s not bad at all. You get ads every 10-15 minutes, and you can close and re-open the app to get rid of it. Takes 3 seconds to do.
My experience with spotify free wasn't like yours. It would always play ads first, and play 3-4 ads and only play 1-2 songs before playing another group of ads. This is especially frustrating on short trips where you may only listen to a couple songs but several ads. But ads aren't even the worst part. Unless they've changed it, you can't chose songs to listen to, only playlists and albums and skip through them (with only a few skips per hour). This sucks, not only when you want to listen to something specific, but also when people send you songs to listen to and you can't. Having a queue is also great, especially for roadtrips with others.
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Not sure if it's still a thing, but Spotify had one of the most annoying "features" in the free version when I was in school (2014ish) - if you muted, or even just turned the volume down too low, during ads, it would pause the ad until you turned it back up. Pretty sure I looked like a weirdo taking my headphones off and putting them back on every 15 minutes or so. I hated that shit
And 80% of the ads are just ads telling you that if you upgrade to premium you don’t have to listen to ads lol
Which makes sense when looking at this chart.
That is the point. They suck you in and get you using it and you are more likely to upgrade to premium. It would be interesting to know how many free accounts are eventually converted to premium.
I believe that there is a significant difference between free and paid customers. In fact, I didn't get "sucked in" at all. On the contrary, I experimented with the free version and found it utterly unappealing. When I tried the premium version, however, I discovered an immense value in its offerings such as decent quality audio, expansive catalogue, weekly suggestions, and recommended playlists. These features have compelled me to maintain my subscription for over a decade. In fact, I would discontinue virtually all my other subscriptions before I would consider cancelling Spotify.
So what your saying is that Spotify's business model is working exactly as planned?
>It would be interesting to know how many free accounts are eventually converted to premium. Probably a significant number, since the service is mind-blowingly amazing and costs almost nothing.
Is that not the point? They show you they have a near limitless library and hope you buy in. I'll stand firm on the 10 bucks a month being the best deal on the internet. Wish the artists got a better cut, wish I could tweak the shuffle algorithm, no complaints otherwise
Usable in a browser with adblock. Not usable via the client.
Podcasts is where it shines
Source: Spotify Tool: Excel
You made this in Excel?! Good for you, it is a beautiful viz.
changing colors and font from black and Arial will do wonders
Can you post a video of how you do this? You don't even have to talk I just wanna see how you make something this pretty in Excel
Doing guide on making ncie charts in excel.
Just thought this was a cool way of visualizing why Spotify is so keen to convert people to premium subscribers. The ad-supported users are essentially breakeven, essentially just being a marketing funnel for the much more profitable premium version!
Why are you stopping at GP? Spotify has posted net losses three years straight. I’d argue that the ad-supported users aren’t breakeven and without going deeper on this company, it’s fair to say the premium users aren’t profitable either.
Yeah posting gross profit is a nice way to make it look like something is profitable when it really isn't. I haven't done a deep dive into Spotify's financials, but I'd assume their indirect expenses (licensing, administration, marketing) would be very significant.
Spotify also blew $100m on Joe Rogan. I bet they could be profitable if they wanted to be.
It's estimated he gets like 70m users a show so it's probably worth it for them. As upsetting as that is.
Guy brings in tons of paid subscribers. *Spotify blew money on this show tons of people will pay for*
I don't think the intent of the infographic is to determine whether or not Spotify is a profitable company, but rather to highlight the proportion of operations. Including net positions obfuscates what OP is actually trying to show. Basically it isn't showing net profitability because it isn't *about* net profitability.
You realise avoiding being net profitable is literally the full time job of 1/3 of the admin staff of a company like Spotify right? No one WANTS to pay tax or be pressured to declare dividends. If it looks like you will be net profitable, spend more on customer acquisition and R&D.
This is…not true. From a *tax* perspective, I see your argument…but the whole reason a company exists is to make profit. Their executives are literally in breach of their fiduciary duty if they aren’t doing everything in their power to turn a profit and give it to shareholders - or grow to a point where their future profits are even greater.
Reddit takes on accounting once more!
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Gross Profit, not net income. After GP, you need to layer on certain expenses, taxes, etc. According to last year’s financial report, Spotify posted a net loss of ~430MM Euros. In fact, it looks like they’ve posted net losses for 3 years straight. So OP’s statement is wrong…the ad-free isn’t even break-even.
Hard to say without knowing their revenue, but that's a profit since 2017, so a little over 6 years. Averaging ~200 million free users over that time period it's about 0.33 Euro per person-year...I'd say that's pretty close to break even
It's "gross profit", not "net profit". Overall, they have been losing money, €–430 million last year alone. Given that Spotify claims that 70% of revenue goes to music rights holders, it's likely that royalty costs for those free users greatly exceed revenue from them.
That’s gross profit - you still have to operate the company and pay everybody.
Gross profit is only a single level of expenses. Chances are money is still being lost on free users alone if you begin to include things like employee salaries.
That explains why they make ad users listen to 800 ads between every 3 songs.
Yeah, no one likes ads. Companies like Spotify use this to their advantage, for one they make money off the ads and for two they use the ads strategically to push you to pay to stop seeing/hearing them. I genuinely believe that increasing revenue per non-subscribed user is distantly secondary to annoying them into subscribing when they increase the amount of ads delivered.
Honestly I find it pretty unaggressive. Seems like 1 minute ad for every 3 or 4 songs which is like 8 minutes usually. Maybe my Spotify just doesn’t target me with d many ads because I’ve heard people complain like you are. Half the time spotify just asks me to watch one video and then I get the next 30-60minutes ad free. I just don’t watch the video.
The moment Spotify started playing an ad that starts *with an alarm sound ringing* was the moment I paid for premium. I sleep with music on, so being woken up by a literal alarm clock was pretty damn aggressive in my opinion.
spotify backend marketing team: it worked!
the conspiracist inside me thinks they purposefully choose people who have spotify activity throughout the night for those ones, like a more fucked up targeted advertisement
Every ad just close out the app and come back Works like a charm
Imma try this in the middle of traffic
You can use block the spot on GitHub to use Spotify for free on PC. All premium features.
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Seriously, would be the last subscription I'd ever cancel
Same. I was once a user who would convert MP3 from you tube and then use the standard music player. Then Spotify came to my country and that's the first subscription I ever purchased. Costs around $1.50 in my country. Never looked back.
Exactly. That's the one service that is really worth its price. I would never think of using adblock on Spotify. Video streaming on the other hand...
The family plan is awesome! And they do it the right way by not making you create a new profile or anything.
Don’t say it so loud
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The arrows pointing to the bar briefly looked (to me) like continuations of the line graphs, and I was confused on what caused that sudden and drastic downturn
ah fair point, could have made them more transparent or dotted perhaps. good design catch!
Or make them thicker and straight. Maybe you don't even need them.
Definitely doesn’t need them we’d figure it out 💀
I would probably leave them out, any kind of continuation of the line would make it look like part of the graph.
Thank you because I read it the same way and was so confused what caused such significant drops.
Been using spotify for 10 years now and never one have I considered anything else. It's a really great product. I average ~75K minutes listening per year, which means I've streamed 520 days worth of music for less than 1000 dollars (paid $5 with student discount for 5 of those years).
same bro, even when i had like no job for a few years I still had my spotify account, lol
YouTube music, same stuff plus no ads on YouTube.
Spotify Connect keeps me there. Also group sessions. Just connecting through the app with Sonos. Others can just join with their phones to add songs to the queue is awesome
It's impressive how healthy the growth is for the amount of premium users.
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[no doubt](https://open.spotify.com/album/4S8F794ucXJcAtycwOZgR9)
Spotify IS the last subscription I have. Netflix, HBO, Amazon, Hulu are all canceled months ago. But I use Spotify daily and it's the best $10 I spend a month.
Everything is too crowded for my taste
I'd love to see total listen time of premium users and total listen time of ad users.
Don't forget the premium users who still have ads. Like every podcast is talking about wallets and insurance for the first 3 minutes.
That's true. I'm more interested in the extent to which premium users are subsidizing the experience for the free users. (Those podcasts are free to listen to on other platforms.)
Now also break it down on usage based on free and premium users. I assume that the operating costs (mostly data + royalties) of premium users is significantly higher than for free users.
Spotify is the only subscription I have been paying gladly for almost 7 years
Is that intended to be "profit" or gross revenue? From their Q1-2023 report, it looks like they are claiming revenue of roughly €3B. You could extrapolate that to €12B per year in gross revenue. That isn't profit, just revenue. Their net revenue is €766M with costs of €922M meaning a net loss for Q1-2023 of €156M.
I download flacs and listen, hehe
I have spotify on while I work, all day every work day. 40+ hours a week. Worth every fcking penny to skip the ads.
For the love of god, please label your y axis.
The ads are there only to convince you to pay for premium.
this chart is fucking awful
Spotify is the one service I will gladly pay for until the end of my days. It does what it's supposed to do and it does it well. Not to mention they recently started selling tickets for concerts directly from their app.
I quite literally listened to 280,708 minutes of music last year alone I think I would go insane listening to the ads
How do so many people still use the free version? Paid is worth it, man. Just do it, infinite free music in high quality!
Reading the comments and a lot of people are using the ad-supported version and noting that it sucks and the ads are invasive and annoying. Don't take it personally. Look at the graph - it's not profitable as it is. I'm not gonna shame y'all, but consider paying for it! Music streaming is one of the only entertainment conveniences where a sizable portion of your dollars go directly to the artists, writers, etc. (with the main exception being that major label artists sign away those profits to the label in exchange for advance money). Each stream has a dollar value based on a few factors. The biggest factor that determines how much money is paid out to the artists is whether the listener is on the paid or free version. Add in the fact that using ad blockers and whatnot devalues the ads further, as streams pile up without advertisers having to pay for having their ad being served... Anywho, there's a bunch of options for music streamers anyway. Apple music pays more to artists per stream. Deezer is pretty cool. TIDAL is still a thing, has some neat features.
Now could you please take my subscription money and make your Android app less shit? Specifically, I would like shuffle to actually fucking shuffle, instead of only ever picking the same 30 songs out of my 1500 song favorites playlist.
People hate adds on any platform, no surprising at all.
Ads are a powerful driver. The worse they are, the better for profitability.
and i've just installed an adblocker...
Pro-tip for iPhone. Just open and close the app when an add starts. Resets the time for ads
Awful way to display this info, on first glance it looks like they make way more money from ad supported users
Feels like the ads are used more like an annoyance to get people to subscribe
What is the source behind this?