Spotify keeps blowing up. The music-streaming leader now boasts 140 million listeners (far more than any of its competitors) and saw its revenue grow 50% last year, to $3.3 billion. But profitability is another story. The company, which is expected to go public later this year, is still losing money as it doles out the majority of its income to record labels and rights holders, as Recode reports. That math may be starting to change as it renegotiates its deals with the major labels, trading concessions (like the option to temporarily hold new music from Spotify's free tier) to the music industry in exchange for friendlier rates. JPT
Spotify is turning your listening binges into millions for artists
The next time you binge on a guilty pleasure on Spotify, maybe you shouldn't feel so bad after all: Your streams could be helping artists in a new way. Fans First is a beta program at Spotify that targets super fans with concert ticket pre-sales, limited edition merchandise, and other exclusive perks. Not surprisingly, homing in on the music fans most likely to click a "buy" button is an effective strategy.
"We're generating tens of millions of dollars in gross revenue for these artists," says Shane Tobin, who runs Spotify's creator insights and activations. A remarkable 40% of recipients are opening these Fans First emails on average, according to Tobin.
So far, the pre-sales alone are generating an average of $40,000 per campaign. And many of the merch items–like a green vinyl EP by The Strokes–sell out quickly. Other artists who have tried the program include Vince Staples, Red Hot Chili Peppers, and Run The Jewels. And the list is growing.
You can now stream the new Beatles’ “Sgt. Pepper” remix on Spotify and Apple Music
The sonically overhauled reissue of The Beatles' Sgt. Pepper's Lonely Hearts Club Band is now available to stream on Spotify, Apple Music, and other subscription services. This deluxe edition features a fully remixed version of the transformative album, plus a slew of bonus tracks and outtakes. It sounds great.
"The feedback we got back is that you can suddenly hear everything," says Giles Martin, son of late Beatles producer George Martin, who led the project to retool the sound of the album. You can read our deep dive with Martin about the whole process here.
Who will Spotify acquire next?
The streaming music market leader just hired somebody to help it buy companies. Sheila Spence, whom Recode calls "a longtime M&A specialist," will start as Spotify's vice president of corporate development at the end of May.
Spotify's biggest acquisition to date was its fortunately timed Echo Nest deal in 2014. More recently, it bought a startup focused on AI and another one focused on using the blockchain for music.
So who's next? Maybe those SoundCloud talks will restart under Spence. In a similar vein, buying Bandcamp would be a smart move. At the same time, acquiring concert data and ticket-seller Songkick would bolster Spotify's own product and annoy its competitors (some of whom use Songkick's data). Whoever it is, expect to see more headlines from the Stockholm-based company ahead of its public offering later this year. JPT
Spotify is coming to the NYSE in an unusual way
Spotify's long-anticipated public listing on the New York Stock Exchange is reportedly inching closer. The streaming music market leader, now valued at $13 billion, is currently being advised by Morgan Stanley, Goldman Sachs, and Allen & Co on the process of placing a direct listing on the market, rather than filing a traditional IPO, Reuters reports. Spotify would be the first major tech company to list its stock this way. A direct public offering, or DPO, lets companies avoid some of the logistical and financial hurdles of a regular IPO by eschewing underwriters and raising funds directly. The listing is expected to happen at some point later this year.
[Photo: TORU YAMANAKA/AFP/Getty Images] JPT
Proof that Drake is the living embodiment of the fire emoji
Spotify has just released proof that Rihanna is a queen, or at least that Spotify users believe she deserves the crown 👑 (Crown emoji). The streaming-music company just pored through its playlists and determined the most "emoji-ed" artists on the platform. Drake is the reigning title holder, because his fans believe he is pure fire emoji 🔥 . He's followed by Justin Bieber, because a lot of people think he merits the heart face emoji 😍 , and One Direction rounded out the top three with the nearly bespoke ID emoji 🆔 .
Adele's broken-heart ballads earn her the heart-break emoji, while Daft Punk gets a robot, Metallica gets the ogre face, Florida Georgia Line and Jason Aldean battle it out for No. 1 in the tractor-emoji using demographic, and bachata heartthrob Romeo Santos gets a well-deserved dancing lady. Other findings include that David Bowie is most closely associated with the lightning bolt emoji, in homage to his iconic look on the 1973 album, Aladdin Sane, while The Weeknd gets the emoji 💦 that Spotify claims is "sweat droplets".
Spotify may be looking to get into the hardware game
Spotify may want to control its own hardware destiny, at least according to a company job posting. As spotted by Dave Zatz, Spotify is seeking a senior product manager to build "a category defining product akin to Pebble Watch, Amazon Echo, and Snap Spectacles."
From that description, it's unclear what kind of hardware Spotify is looking to build (wearable, home speaker, or something else entirely?). The company declined to comment, and has now removed the relevant job posting from its website. But given that Spotify is competing in streaming music with the companies whose platforms it relies on—namely Apple, Google, and Amazon—it's understandable that it would want some hardware to call its own. JN
Spotify’s new deal with indie labels shows it’s getting serious about the upcoming IPO
Spotify just signed a new licensing deal with Merlin, the organization that represents thousands of independent record labels. This is another important step in the company's march toward going public later this year. And like its recent deal with Universal Music Group, this one reportedly gives rights holders the option to keep new music off of Spotify's free tier temporarily. If widely utilized, the provision could have the effect of pushing more people to pony up and pay for Spotify. Or maybe they'll just pirate new tunes. Either way, this detail placates the labels and helps Spotify take another step toward the stock market. JPT
Spotify opens up its data to hungry musicians
If Spotify has one advantage over its music streaming competitors, it's data. With over 100 million listeners, the company has an incredible amount of insight into how people listen to music. And now they're sharing it with musicians.
Spotify For Artists is an analytics dashboard that breaks down streaming activity like total listeners, how many are true fans, where they live, and how they break down demographically. It also shows artists and their managers which Spotify playlists are funneling new listeners into a band's fan base. It's all incredibly valuable data for artists who may still be wondering how the streaming era–and its infamously small royalty payouts–benefits them.
A Spotify exec was killed in Stockholm’s terror attack on Friday
Chris Bevington was the streaming company's director of global partnerships and business development. A British national, he worked in Stockholm for Spotify for over five years. Bevington was one of four killed when a truck plowed into a shopping district in Sweden's capital on Friday, reports Variety. Daniel Ek, the founder of Spotify, confirmed Bevington's passing in a Facebook post this weekend.
Why Spotify is planning an IPO that’s not an IPO
The music streaming service is finally set to go public this September, reports the Wall Street Journal. However, instead of a traditional IPO, Spotify will go public via what's known as a "direct listing." As the WSJ explains:
"By pursuing a direct listing, the company could save on hefty underwriting fees and avoid dilution that comes with issuing new shares, according to some of the people familiar with the matter. Its early investors would be subject to less stringent lockups governing the sale of insiders' shares, those people said. What's more, the company could avoid the first-day trading pop that characterizes many IPOs shepherded by underwriters. They are good for some investors but also indicate a company left money on the table."
Caving to labels, Spotify ends its music free-for-all
Looks like the music industry finally got its wish. In a renewed deal with Universal Music Group, Spotify agreed to let labels hold new releases from the service's free tier for up to two weeks, giving paid subscribers priority access to new jams. This has been a sticking point in relations between Spotify and the music industry for some time, since ad-supported streaming generates less revenue than paid subscriptions. Thus far, Spotify has declined to play the expensive "album release exclusive game" that Apple Music and Tidal have famously (and controversially) embraced. This compromise, the industry hopes, will give free listeners an extra incentive to pay up for a subscription. That is, if they don't opt to pirate the new stuff.
In exchange, Spotify scored a lower per-stream payout to UMG, which will help keep its massive costs under control ahead of its potential IPO later this year.