Spotifying the Differences: Spotify’s Attempt to Match with Netflix
Spotify, the music industry giant that has been leading the whole industry for over a decade has experienced major losses. This mellifluous giant which is the Netflix equivalent in the music world is said to have faced some downfall.
While monthly active users are at an all-time high as shown in the 2nd Quarter report of Spotify, the company has still reported an operating loss of 120 million dollars. The company is the behemoth that Apple Music, YouTube Music, and Amazon Music have to battle against. It has a cult-like following in comparison to its rival platforms. However, the problem with its business model is that even if it prioritizes growth over profitability, it might not be able to sustain it.
The company is battling its euphonious contenders which have a huge amount of capital, these companies are all part of trillion-dollar empires. Spotify, even though respectable, has only a measly market capital of $31.5 billion. One could say that it’s similar to an ant battling against an elephant.
Spotify Might be a Google Cloud Addict
Even though it’s a competitor, Spotify itself loves being a Google Cloud user. They transferred their work over to the Cloud infrastructure back in 2016 and have not looked back once since then. In a protocol interview with Tyson Singer, Vice President of Technology and Platforms at Spotify, he stated that they are in the process of creating a modified environment ( similar to Google Cloud services).
Spotify’s Battle with the Krakens
As expressed earlier, Google has a cloud service that mints money by providing it to an individual or a business. However, Spotify on the other hand just has a music platform which is its only product. Yes, the platform is expanding and is now competing in the podcast department but the diversity in what it offers is no way closer to what Google, Apple, and Amazon have to offer.
When flipping through such statistics, one would wonder that Spotify has a lot of catching up to do. However, Spotify is not behind the competitors in terms of features. Others simply offer just as competitive products with more convenience.
Apple’s platform is the one leading behind Spotify. Spotify and Apple Music have been just as much of a heated discussion as IOS and Android to some enthusiasts. Apple Music is still failing to catch up due to the creation of the Apple ecosystem (Apple users are well aware of this).
Google’s product is the newest of the bunch, it had a previous product called Google Play Music which was replaced with YouTube Music. Youtube Music has portrayed itself to be promising, mainly because artists use this platform for sharing their music on Youtube which is why the music platform has access to all the music from its sister app.
Amazon Music is the least talked about, out of them all. However, it has created a pretty active and stable user base for itself. Through more of its products like Amazon Echo, it has also been set up as one of the default ways to play music in some homes. However, it has not been able to create hype for its platform that other brands have created for theirs.
Artist’s Prefer Apple’s Monetizing
One of the biggest grumbles of the Swedish giant is its method of paying the artists slowly and how it is treated as the quiet kid in the school. Spotify has been known for paying artists a low amount of money for every stream. Nevertheless, there have been arguments that it is the record labels who are at fault.
The streaming model of Spotify and its fiscal handouts is cherished in the industry, which is why many artists lean toward Apple’s monetary proceedings. Users in iTunes can buy licenses of the songs they enjoy, and if they do not wish to support creators individually then they can benefit from the subscription-based model for which one has to pay money, which provides an artist way higher money as instead of ads they directly pay money.
Why Spotify Will Never Be as Big as Netflix
Spotify, even though as big as Netflix in terms of subscribers, will never be able to match its Herculean market capital of 200 billion dollars. The company has repeated losses, while Netflix, even though has faced a bit of turmoil recently, has been making its own content which has propelled it to the top.
The music giant cannot make a huge profit alone. It has to share the meat with other publishers in order to sustain itself in the jungle that is the music industry. The Sweden-based company can also never own music, due to its contracts.
Spotify is still struggling to manage itself, In January it laid off 600 employees and is now cracking down on white-noise creators to save costs. It could still be some time before it turns a profit, but it is also establishing its podcast empire in preparation for that. There is still a long way for Spotify to go but it might just pull it off.
