Spotify just tanked on reporting another huge loss and increasing their prices. I wonder whether their business model is sustainable at all especially when they are competing with the tech giants who are bundling music into other services?
Discussion
TLDR, most tech biz models;
Raise boat loads of capital during zero interest rate phenomena. Spend 60% of it on Facebook and Google ads to fuel adoption.
yes!
Not sure if this is true, but from what I understand, they have the additional problem that raising prices doesn’t help them because they have to pass any surplus on to the labels anyway.
In other words, their only path to profitability is 1) hoping for better bargaining power in the next cycle of contract renewals and 2) reducing overhead
They’ve had 3 worthwhile quarters out of 26, pretty sure they will be raising again. 