Spotify doesn't make profit from music streaming, despite having over 400M monthly active users, because it pays two-thirds of all its revenue to the rights holders.

chemicalwonka , 6 months ago

They just want your personal and behavioral data to sell to third parties for shady purposes. After all, AI’s don’t feed themselves

derpgon , 6 months ago

How does me listening to “I’m Blue” on repeat help, especially in case of AI? I fail to see the connection.

chemicalwonka , 6 months ago

1000086422

bigthink.com/…/is-spotify-spying-on-you/

chemicalwonka , 6 months ago

1000086424

www.wired.com/…/spotify-tracking-how-to-stop-it/

Lucidlethargy , 6 months ago

And yet, they still aren’t even close to the highest paying service when it comes to musicians getting their cut.

dittomusic.com/…/how-much-do-music-streaming-serv…

It’s hilarious that Napster now tops the list. I use Tidal, myself, since it’s got great quality audio. Spotify is horrible quality for 2023.

MaxVoltage , 6 months ago

as a young 20 year old i doubt those services have new music. Spotify has albums SAME day

im sure that works great for oldies like blink182 tho

ILikeBoobies , 6 months ago

They do

crab , 6 months ago

Spotify is horrible quality for 2023

To my surprise, even Spotify’s standard (not high or very high) is extremely difficult, if not practically impossible for the average consumer to differentiate from lossless (on better than consumer grade hardware). Upon hearing this, me and several friends decided to test it for ourselves by taking lossless files for several songs and resampling them to the same codec and bitrates that Spotify’s standard quality uses, then ABX testing the before and after with Foobar’s ABX and exclusive mode plugins (also tried the popular comparison website, but that’s apparently less accurate). One of my friends had access to a college studio, I have a dac and sennheiser, and the third had sony wxm4s. To our surprise, none of us could consistently differentiate the two. Its not perfect considering we didn’t grab the outputs directly from the streaming platforms, but that would’ve added extra variables like volume normalizing (louder sounds better).

Our conclusion is that the quality “difference” is likely placebo and probably a waste of bandwidth.

pup_atlas , 6 months ago

I wholeheartedly disagree. I have more trained ears then most (worked in video production), but not by much, and when i got my AirPods Max, I thought they sounded awful at first. They were crunchy and dithered sounding in this weird way. I was gonna return them, but I did some testing, and discovered that I was hearing Spotify compression. I turned up the quality as high as it would go in the settings, and that made it a little bit better, but I could still hear it, and can to this day. I did some further testing by signing up for a tidal free trial, in addition to Apple Music. Listening in lossless was an entirely different experience, I could definitely tell the two apart blindly, without even specifically looking for sound quality. There were like 2 to 3 instruments in a given song that I wouldn’t be able to pick out in the lower quality audio, that I could easily pick out in the lossless audio. You have to have a pretty decent pair of headphones to be able to hear it, but some of the higher and consumer stuff can definitely hit that level, and when you do, it’s not something you have to go looking for, it sounds very obvious.

astray , 6 months ago

I’m not trained in anything useful but I had a similar experience. It was like upgrading from a 720 screen to a 4k screen.

First , 6 months ago

Do you realize AirPods Max/iPhone is capped at AAC/256 kbps over BT, and needs DAC -> ADC -> DAC to use a wired connection?

HexagonSun , 6 months ago (edited 6 months ago)

Yep, absolutely this.

You cannot listen to music losslessly with AirPods Max, cabled or not.

From Apple’s own site: “The Lightning to 3.5 mm Audio Cable was designed to allow AirPods Max to connect to analog sources for listening to movies and music. AirPods Max can be connected to devices playing Lossless and Hi-Res Lossless recordings with exceptional audio quality. However, given the analog-to-digital conversion in the cable, the playback will not be completely lossless.”

If someone thinks AirPods Max sound amazing, they’re agreeing how good compressed audio can sound, whether they realise it or not.

pup_atlas , 6 months ago

If someone thinks AirPods Max sound amazing, they’re agreeing how good compressed audio can sound, whether they realize it or not.

Yes! (Kinda) I’m not saying lossless music is the end all be all, and honestly in normal life I prefer non-lossless, because its SOO much less data, and you can hardly tell the difference in normal listening anyway. What I was trying to express was how bad badly done compression can sound. Good compression exists, and it can sound nearly identical anecdotally, but there is a limit to how low you can go before you start hearing it, and I’m trying to say that I think Spotify has chosen a rate below that level by default. I switched to a higher profile and the problem is mostly gone.

pup_atlas , 6 months ago

There may be other factors at play, Apple quite likes to compress stream data between their own devices, even on “standard” protocols (just look at their monitor collaboration with LG where they did the same thing to exceed the max resolution of an existing display signal). Regardless, there is a difference, and it is not a small one. It was immediately obvious to me after listening to a single song. Something about the pipeline is crunching audio to the level where it’s obviously degraded. This isn’t audiophile grade splitting hairs and “I think it sounds ever so slightly better with these gold cables” it was like the difference between 480p and 1080p video to me, enough to be actually annoying during normal listening, even if I was actively trying to forget about it.

First , 6 months ago

Ok it sounds like what you experienced was caused by something completely different than detecting an audible difference between Spotify’s 320 kbps AAC encoding and lossless encoding, encoded over a 256 kbps AAC BT codec, but if you actually want to do a true A/B blind test of 320 kbps vs. lossless on your setup, here’s the place to do it:

abx.digitalfeed.net (select the first link - “The statistically valid Tidal test to make”)

BigBananaDealer , 6 months ago

i figured having volume normalizer off would be the best quality

i think a lot of people that complain about the “bad” quality simply have the volume normalizer on, which makes the quality worse for some songs

LordWiggle , 6 months ago

Poor Spotify. Here’s a Link to a documentary about the dark side of Spotify, by Slightly Sociable. Their illegal business, extortion of artists and support for scamming.

chitak166 , 6 months ago

Profit can be distorted based on how much you’re paying your employees.

In this case royalties paid out to imaginary property holders means spotify is functioning exactly how it should. Those people are profiting, spotify’s employees are being paid. Everyone directly involved has more money than they need.

thedirtyknapkin , 6 months ago

except tht artists, which is more the fault of the rights holders in this case really…

lolcatnip , 6 months ago

How is this news? The price you pay for media of any kind I can think of goes mostly to the rights holders, not the companies physically delivering it to you. You may object to the rights holders being shitty record labels, but that term also includes independent artists. And more to the point, rights holders are by definition the people who are entitled to profit from selling access to the media they own.

If you want to get pissed at someone, get pissed at the record labels sharing a ridiculously small part of their licensing fees with the artists who make their product.

donuts , 6 months ago

I call bullshit. Yeah I'm sure they spend 2/3 of their income on rights holders, mainly Joe Rogan, Ed Sheeran and Taylor Swift.

The average musician isn't making shit, and yet the spotify execs are sipping champagne.

StinkyRedMan , 6 months ago

You know they don’t pay the artist directly? Like with physical the ones taking the biggest share are the labels… Also the average musician isn’t making shit cause compared to a very few bigger artists they represent an extremely low percentage of the overall streams on the platform.

giggling_engine , 6 months ago

“not making profits”

Just massive salaries and equity

snek , 6 months ago

Taylor Swift somehow being a hallmark of the times makes me wish the whole world would end in a giant ball of fire.

___ , 6 months ago

She’s not the worst role model we’ve ever seen, so at least the world isn’t completely mad. I think her music is mediocre, and don’t understand the fanfare, but to each their own.

snek , 6 months ago

I think as a person she’s fine. But as a branding machine… meh.

rab , 6 months ago

I’m glad bands I like aren’t big so I can afford to go to their shows :)

Candybar121 , 6 months ago

deleted_by_author

snek , 6 months ago

I’m 30…and you? (kinda afraid to ask at this point lol)

Darkhoof , 6 months ago

The rights holders are the record labels. As much as artists want to complain about Spotify they should direct their criticism to their record labels.

Corgana , 6 months ago (edited 6 months ago)

Spotify is far from powerless in this arrangement too. Nobody is forcing them to be in this business.

ky56 , 6 months ago

Pretty sure Spotify is more powerless than you think. The record labels nearly burned their industry to the ground in the 2000s over digital piracy.

Netflix wouldn’t be around today if it wasn’t for their move into becoming their own movie studio thanks to just about every big Hollywood studio pulling out, arrogantly thinking that they can each run their own service for a bigger slice of the pie. Newsflash, it’s going really bad. Especially for Disney, who deserve everything coming to them.

I reckon if Spotify makes even a small move to undermine the big record labels, they would yank all the popular music. Spotify either wouldn’t last long or best case they down size into a niche music platform.

restingboredface , 6 months ago

it’s going really bad. Especially for Disney, who deserve everything coming to them. <

I can’t like a statement hard enough. Amen.

echoplex21 , 6 months ago

Basically the moral of the story is that Spotify should have followed in their footsteps and become their own record company.

chitak166 , 6 months ago

Moral of the story is people should stop lowering their standards so those richer than them can be even richer.

jonne , 6 months ago

Hold on, what’s going to happen to Disney? I got the impression they’re really eating into Netflix’ market share. They basically own a huge chunk of the content most people care about.

small44 , 6 months ago

What about independent artists?

Blackmist , 6 months ago

If they were getting as many listens as Taylor Swift, I’m sure they’d be making bank. But they’re not. A listen ain’t worth a lot and never has been.

rab , 6 months ago

Average musician probably makes more than you think youtu.be/qjb-pJIfQXI?si=Zbi54GvD3NqomIrv

Kraiden , 6 months ago

I'll take "Unethical accounting" for 500, Alex

scottywh , 6 months ago

And the artists still don’t really make shit from it.

negativeyoda , 6 months ago

It was them or Joe Rogan

Thcdenton , 6 months ago

BLITZSCALE BABY

blackjack , 6 months ago (edited 4 months ago)

deleted_by_author

spiderman , 6 months ago

I will be ready to pay for Spotify again if they bring that.

Kyoyeou , 6 months ago

Honnestly Deezer Student has “HIFI” file on in so it’s great for me But I’m quite certain when Spotify HIFI will be launched I’ll already pass on to Quobuz because I wont be a student anymore

Rosco , 6 months ago

Still not paying for it.

flambonkscious , 6 months ago

Amen! Ownership counts!

NaoPb , 6 months ago

Yeah it’s all the fault of the rightsholders. Definitely not bad management.

Not that I’m a fan of rightsholders but this is more like shifting the blame.

where_am_i , 6 months ago

400m subs x 100$ a year on avg = 40 billions in revenue. Even if only 25% e.g. 10 bil is retained by Spotify it’s a lot of money to maintain infra and pay stuff.

EnderMB , 6 months ago

Sometimes, I see some of the takes on here, and it’s hardly surprising that the fediverse isn’t particularly popular.

Spotify are somewhat responsible for their current position. They hired too many people, extended into markets they didn’t need to enter, and have a CEO that has blown money in places that didn’t need it. Let’s not forget that Spotify spent $300m on sponsoring FC Barcelona, which could have allowed Spotify to employ ALL of the employees it laid off for 1-2 years. Spotify had no need to give $200m to Joe Rogan, either! That’s half a billion spunked up the wall on decisions that have done nothing for the company but cause grief. Instead, they could have focused their efforts on paying more out to smaller artists that provide the long tail for their service, while also making deals to promote merch and tour dates where possible.

With that being said, if you think that Spotify didn’t play a huge part in making music streaming accessible you’re just being contrarian for no reason. They provided (at the time) a solid application, good connectivity with services like last.fm, and had the social connection sorted from the start. Once phones took off, Spotify removed the need for mp3’s for the majority of people, largely killing iTunes. Spotify was the winner of the music streaming wars.

Frankly, a lot of people were praising Spotify for their “good” severance package, but IMO shareholders should be livid, and should be calling for a new person at the helm.

abhibeckert , 6 months ago

IMO shareholders should be livid

Why? Shareholders gave Spotify billions of dollars - they expect the company to spend that money. Shareholders are quite capable of depositing their own money in a bank if they didn’t want it to be spent.

My take is Spotify hired over 5,000 employees over 2020 and 2021 when the economy looked great. Then Russia Invaded Ukraine in 2022 screwing the global economy and particularly Europe which is Spotify’s biggest market. They’ve laid off about half the people they hired, which is unfortunate… but it’s understandable. The couldn’t have foreseen the economic shift.

Spotify removed the need for mp3’s for the majority of people, largely killing iTunes

Huh? Apple’s music service has about a hundred million users. Up from eighty million a few years ago. Spotify has more than twice that, but iTunes is hardly dead.

squidman64 , 6 months ago

Apple Music the music subscription service is different from iTunes the music purchasing store. When’s the last time you heard of anyone buying an individual song / album on iTunes?

1371113 , 6 months ago

When’s the last time you heard of anyone buying an individual song / album on iTunes?

I’m yet to hear a first time, and I remember when mp3s first became a thing.

Jtotheb , 6 months ago

You’ve never heard of someone buying music on iTunes?

1371113 , 6 months ago

Genuinely, never. It wasn’t that popular in my country.

blazeknave , 6 months ago

Yarrrrrr

joel_feila , 6 months ago

This is the way

small44 , 6 months ago

I hear people buying music from Bandcamp everyday

lemann , 6 months ago

R.I.P. Bandcamp

c0mbatbag3l , 6 months ago

What happened to Bandcamp?

lemann , 6 months ago

It was purchased by Epic Games a year ago, who recently sold it to Songtradr, a licensing platform for background/‘mood’ music. Songtradr only retained 50% of existing Bandcamp staff (the rest were laid off a few weeks after the sale AFAICT, with the worst affected departments including Bandcamp’s editorial team and customer support. Epic Games handled the severance package, for some reason.)

People are pretty upset about the editorial team being laid off because it provided exposure for smaller/niche artists in a weekly publication. I’ve never checked it out personally checked it out because I never knew it existed - wishing I had now

Such a large layoff so quickly by the new owner feels like a sign of darker times ahead for Bandcamp IMO, seeing that it’s apparently been profitable since 2012 (Wayback link, new owners have nuked this from the site?). No need to milk the cow even more when the bucket is full…

olmec , 6 months ago

I still buy music on iTunes. I prefer having my collection available on CD, but if I only want a single track or two, I just go to iTunes and buy the songs. This year, I think I bought 4 songs. It isn’t ton, but it is still in my mind.

postmateDumbass , 6 months ago

removed the need for.mp3s

Im not sure this was a win

EngineerGaming , 6 months ago

Also it hasn’t, because having your actual collection on a streaming service is leagues less convenient than a bunch of mp3s on a hard drive.

deweydecibel , 6 months ago

Sometimes, I see some of the takes on here, and it’s hardly surprising that the fediverse isn’t particularly popular.

You genuinely think the reason the fediverse isn’t popular is because people have negative opinions of Spotify? As if these opinions wouldn’t also be prevalent on Reddit? As if having to see opinions you didn’t agree with was ever holding reddit back to begin with?

And yeah, Spotify made music streaming accessible, but the overall problem is they did what all tech companies at the time did: burned money to establish themselves hoping the profit would come later.

You’re praising them for killing iTunes, but maybe iTunes didn’t need to be killed. Maybe breaking markets with a type of streaming that wasn’t profitable and fucked over artists has given us a few years of good streaming, but the honeymoon is coming to an end, and we’ll all be worse off when the stockholders start demanding profit.

Same thing that happened with YouTube, basically. Company runs something at a loss for so long they’ve effectively broken the market and now that it’s time to make money, we’re all fucked over.

Strykker , 6 months ago

No it’s not because people here don’t like Spotify, but the stupid ass takes y’all have that lead to Spotify hate bleed through in half the other content on here that people don’t like either.

That fact that you thought ops comment was about disliking Spotify specifically reinforces it.

teichflamme , 6 months ago

Exactly. The amount of insufferable people with absolute shit takes that wouldn’t stand in the real world is amazing here on lemmy

c0mbatbag3l , 6 months ago

This problem existed on reddit too but it seems concentrated here, like all the people with shit takes who got ignored on reddit came here so there voice could be heard.

I wish the fediverse the best but at this point it feels like it’ll never progress past the few hundred thousand point due to the highschool level analysis of socioeconomic problems.

0xD , 6 months ago

YouTube is fucking you over because they’re trying to get rid of freeloaders? How entitled.

Darkhoof , 6 months ago

Completely agreed. If they focused on their core business they would’ve already been in much better shape.

small44 , 6 months ago

In it’s whole history, Spotify only made profits in two quarters and if I’m not wrong the other streaming services aren’t profitable either so it doesn’t looks to me that the problem is just over hiring but the nature of streaming business itself You also underestimate the power of sponsorship especially sponsoring sport. I’m sure a lot of people are using Spotify just for that. Investing in podcast make sense because it’s more profitable than music, Spotify need to diversify it’s revenues. You said that Spotify have good connectivity with lastfm but that’s not true. Most of issues lastfm users have with lastfm is related to Spotify.

ribboo , 6 months ago

I doubt Joe Rogan and Barcelona has only caused grief. There’s a reason huge companies throw absurd amounts of money on advertising and right deals. It’s often lucrative and worth it.

As we don’t have the numbers we can only speculate in what return they got on those deals. But it was most definitely not 0.

Tour deals, merch and independent artists are great, but you do not reach critical mass when it comes to a general audience that way. It’s basically like trying to advertise on the Fediverse versus advertising on Reddit.

frezik , 6 months ago

Marketing like that doesn’t have solid numbers. Did sponsoring FC Barcelona cause people to signup to Spotify? How many? How much revenue did they get from each one?

Even when people fill in the “where did you hear about us?” option during signup, the data there is murky, at best. You can try to do tracking like “we saw a 20% increase in signups during and immediately after FC Barcelona games”, but that’s still just a proxy measure. Maybe it isn’t 20%, but more like 2%, and that could easily be noise.

These deals tend to have an amorphous “increase in brand awareness” that has little hard data to back it up.

ribboo , 6 months ago

I can take your word for it, or I can consider the fact that basically every major company in the world does it. Somehow I don’t think it’s totally useless.

frezik , 6 months ago

People who are good at marketing have convinced people with money to do it, yes.

Arcka , 6 months ago

Yeah, that dude’s take reads just like climate science denial and flat earth conspiracies.

joel_feila , 6 months ago

Yeah spotify did wind up how most people listen to music, and podcasts. They had what people wanted and made it cheap. Then they also made a lot of decisions that wasted money. Dont know for certain but i doubt the exe there stopped geting big bonuses or pay cuts over those decisions

Lucidlethargy , 6 months ago

Spotify has a lot of Blockbuster energy, but with a mixture of something far worse, since they did indeed stand by Rogen and profit off him.

Lutra , 6 months ago

Equity.

In total, at the close of last year, SEC documents show that exactly 65 percent of Spotify was owned by just six parties: the firm’s co- founders, Daniel Ek and Martin Lorentzon (30.6 percent of ordinary shares between them); Tencent Holdings Ltd. (9.1 percent); and a run of three asset-management specialists: Baillie Gifford (11.8 percent), Morgan Stanley (7.3 percent), and T.Rowe Price Associates (6.2 percent). These three investment powerhouses owned more than 25 percent of Spotify between them — a fact worth remembering next time there’s an argument about whose interests Spotify is acting in when it makes controversial moves (for example, SPOT’s ongoing legal appeal against a royalty pay rise for songwriters in the United States).

Furthermore, according to MBW estimates, which my sources suggest are still solid, two major record companies — Sony Music Entertainment and Universal Music Group — continue to jointly own between six percent and seven percent of Spotify (Sony around 2.35 percent and Universal around 3.5). With Sony and UMG added into the mix, then, the names mentioned here comfortably own more than 70 percent of Spotify.

<span style="color:#323232;">
</span><span style="color:#323232;">https://www.rollingstone.com/pro/news/who-really-owns-spotify-955388/>
</span>

helenslunch , 6 months ago

…they paid Joe Rogan $100M to be exclusive so they must be making profit somewhere…