Spotify falls due to disappointing subscriber growth

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Jamie McKane

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Spotify falls due to disappointing subscriber growth

Spotify Technology SA posted a 45 percent jump in subscriptions during its first quarter as a public company. That wasn’t enough to please its increasingly bullish investors.

The shares tumbled as much as 10 percent in late trading Wednesday after the music-streaming service said it reached 75 million premium users last quarter. Though the number matched Spotify’s projections, it wasn’t the breakout growth shareholders expected after a strong debut on the New York Stock Exchange last month.

[Bloomberg]
 
Jesus, how is 45% subscriber growth for one quarter not good enough?

As much as I love Spotify, I'm not sure they can survive long term. Look at what they're up against:

Play Music - Google merging it with Youtube Red & Youtube Music soon. Amazing value just to block Youtube ads.
Apple Music - Deep integration with iOS devices, catches a lot of ignorant users who might (but certainly not necessarily) prefer an alternative. Apple wants to push hard for original video content.
Amazon Music - Included free with Amazon Prime, one of the best value services out there.

So all of Spotify's most serious competition are not focused on music, but rather how they can use music streaming to add value. And a significant component of Spotify's expenses, namely their infrastructure, cost almost nothing to their competitor's streaming divisions as the wider companies are already heavily invested in that area. Spotify has a tough road ahead imo.
 
Bryn said:
Jesus, how is 45% subscriber growth for one quarter not good enough?

As much as I love Spotify, I'm not sure they can survive long term. Look at what they're up against:

Play Music - Google merging it with Youtube Red & Youtube Music soon. Amazing value just to block Youtube ads.
Apple Music - Deep integration with iOS devices, catches a lot of ignorant users who might (but certainly not necessarily) prefer an alternative. Apple wants to push hard for original video content.
Amazon Music - Included free with Amazon Prime, one of the best value services out there.

So all of Spotify's most serious competition are not focused on music, but rather how they can use music streaming to add value. And a significant component of Spotify's expenses, namely their infrastructure, cost almost nothing to their competitor's streaming divisions as the wider companies are already heavily invested in that area. Spotify has a tough road ahead imo.
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It's not a winner takes all market specially if you're eyeing a billion users. None of those got the amount of playlists and artist curated playlists Spotify has.
 
backstreetboy said:
It's not a winner takes all market specially if you're eyeing a billion users. None of those got the amount of playlists and artist curated playlists Spotify has.
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I'm not talking about the quality of the service though. Obviously I feel that Spotify is very good if I'm prepared to pay for it.

I'm commenting on how they've never been profitable and are always eyeing some point in the future where they might be, partly based on using their market power to negotiate cheaper royalties. This may never be possible though, as their competitors are converging on the quality of Spotify (Play Music just needs the massive quantity of regularly updated curated playlists), don't have the expenses of Spotify (music divisions not responsible for infrastructure) and are looking to add a lot of extra value at the same price point. Spotify may never have the dominance needed to strong-arm rights holders and may eventually be unable to offer a comparable value proposition.

Honetly, Apple Music would be perfect if the desktop & mobile apps weren't sluggish, the curated playlists were better and the auto stations weren't total crap. Those changes could occur out of the blue and present an immediate existential threat to Spotify.

Play Music is already excellent, particular with regards to auto stations. If it added a wealth of good curated playlists then it too would present a serious problem for Spotify. The extra Youtube Red content and Youtube ad blocking are incredible additions for the money.

You see the problem Spotify has? Its main competitors could potentially close the gap at any moment and decimate Spotify's value to consumers.
 
Anyone here used Deezer before? Its the only reason I never even looked at Spotify... I even think they use the same database?
 
SpeX said:
Anyone here used Deezer before? Its the only reason I never even looked at Spotify... I even think they use the same database?
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They definitely don't use the same database, but their catalogues are indeed very similar if that's what you're alluding to.

I have used Deezer before and it's not bad. The problem has never been that Deezer sucks, but that Spotify, Apple Music and Play Music are all better.
 
Bryn said:
They definitely don't use the same database, but their catalogues are indeed very similar if that's what you're alluding to.

I have used Deezer before and it's not bad. The problem has never been that Deezer sucks, but that Spotify, Apple Music and Play Music are all better.
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Sure, we all have our own tastes and opinions. You do you.

I am just saying,my musical requirements are more than satisfied using Deezer, music is music no matter the app I use for it.
 
SpeX said:
Sure, we all have our own tastes and opinions. You do you.

I am just saying,my musical requirements are more than satisfied using Deezer, music is music no matter the app I use for it.
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Well I'm hardly going to crap on Deezer that much when I've already said there's nothing particularly wrong with the service. There is more to mere access to music when it comes to music streaming services though, which is why I don't use Deezer. For me the most important aspect is discovering new music, and I don't think any of the services are as good as Spotify in that regard. Play Music takes second place for me.

The irony is that none of them can adapt to your tastes better than Spotify.
 
Bryn said:
75 million Premium subscribers seems like a good number, especially for such a competitive industry...
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Think the 45% growth was in the context of South African users.
 
Hamster said:
Think the 45% growth was in the context of South African users.
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I'd have to assume it's global, seeing as the CEO is making comments and the 75 million Premium users exceeds the population of SA.
 
I tried Spotify Premium this week.

Love the seamless integration between devices, but in general it's slow, clunky and does not offer anything more than my Google Play Music subscription. There's a lot of "There was a problem displaying this page" issues too on the desktop and web pages, which Google never has.
 
genetic said:
I tried Spotify Premium this week.

Love the seamless integration between devices, but in general it's slow, clunky and does not offer anything more than my Google Play Music subscription. There's a lot of "There was a problem displaying this page" issues too on the desktop and web pages, which Google never has.
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Very strange.

Spotify is considered to be one of the best available. I've tried most of the services and have settled on two : Spotify and Tidal. There's nothing inherently wrong with the other services, but there really is nothing that makes them stick out.
 
Just FYI, in regions with YouTube Red, it's bundled with Play Music at a higher price. That said, in those regions Spotify is usually the same price as Play Music/ YouTube Red (more than SA).

I pay A$11.99 ~R120pm for YouTube Red and Play Music.
 
genetic said:
I tried Spotify Premium this week.

Love the seamless integration between devices, but in general it's slow, clunky and does not offer anything more than my Google Play Music subscription. There's a lot of "There was a problem displaying this page" issues too on the desktop and web pages, which Google never has.
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Update Windows multimedia components. Try K-Lite Codec Pack on older computers.
 
sajunky said:
Update Windows multimedia components. Try K-Lite Codec Pack on older computers.
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It's an app issue. Anyway, Spotify does not need 3rd party components to play an MP3 file format.

Seems to be performing much better today. Got 3 weeks of the trial left to come to a conclusion.
 
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