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Lausanne Davis Carpenter's avatar

We're all going to have to learn to sell direct. Maybe a car boot sale is in my future.

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Ash Roberts's avatar

I kept reading all the way to the end, hoping that you would eventually make an argument That would tie all the points that I was disagreeing with together in a way that made me see it all in a different light. But it never happened.

Spotify had ~$12b in revenue last year, but paid artists $8b. So that's already 75% of their revenue. There were apparently another billion in operating costs, bringing gross profit to $3b. But gross profit doesn't tell you all that much, really. Gross profit is just how much you sold minus the cost of creating/buying it. What you want to look at is net revenue, which is the thing that people are thinking of when they say profit. The two terms always sounded backwards to me.

But when you look at their net income, Spotify has actually lost money 3 years in a row. Almost a billion dollars last year.

The reason streaming services pay so little for content is because people consume so much more on an all-you-can-eat model than ala carte. In 1999, I could get a CD a month, giving me 12 hours of music, for the price I can get hundreds of hours of music to listen to on Spotify. To keep the cost of a song what it was in 1999, Spotify would cost hundreds of dollars per month.

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