Veteran Sound Project

On April 3^rd, the largest music streaming service globally officially released it’s IPO (Initial Public Offering). The highly awaited tech stock offering launched successfully with a $30 billion dollar evaluation of the Swedish company. On it’s first day of the trading the SPOT stock closed around $149 dollars. Wallstreet hopes Spotify will be the beacon of light in a market that has not been to kind to investors the last couple weeks. Fears of the potential trade war with China and the data controversy with Facebook has left Wallstreet on edge.

As many institutions are eager to invest in Spotify, others are worried that the 10 year old company has not turned a profit in…10 years. In fact, the company has been losing more money per user in the past three years. Spotify executives have promised they are closing the gap on streaming expenses and revenues, but many speculate it’s ability to meet this change and compete with streaming heavy weights Apple and Amazon. Both have deep pockets and have been gaining ground on Spotify’s overall market share. Meanwhile Spotify has been dealing with a massive 1.6 billion dollar lawsuit from Wixen Music Publishing. Spotify still dwarfs all the competition with more than double the premium customers to nearest rival Apple Music.

Spotify has seen controversy in the streaming payouts that are offered to artists on the platform. Currently, the streaming rate offered is 0.0038 cents per stream. To compare, any song that would receive 100,000 streams, the artist would earn about $380. Therefore, only very successful artists can truly make a living off their music streamed. Unfortunately, the chance of these rates increasing anytime soon are very slim. Spotify has actually decreased the rate over the years and will likely continue the trend to appease new investors in turning the financials around. Many artists avoid Spotify for these reasons and others, such as Taylor Swift’s feud with the company to limit her music to paying subscribers. Realistically though, most independent artists need the exposure through Spotify to grow their music. Even though other services pay significantly higher rates, no other streaming platform can compete with Spotify’s over 150 million customers.