Riddle Me This

Is it a fatal flaw?

 

What makes less even as it makes more?

The headlines are always large, trumpeting huge gains in subscribers and listening.

But just underneath is the truth: Losses are rising too.

Their business model doesn’t work, at least not yet.

And most musician artists hate it because it pays them virtually nothing.

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Spotify’s number of premium subscribers increased to 205 million as of Dec. 31, the company announced in Tuesday’s earnings release, representing a 14% increase year-on-year. That helped increase its monthly active users (MAUs) to 489 million, a 20% rise. (The Verge)

Spotify’s revenue of €3.2 billion (about $3.47 billion) in the fourth quarter was up 18% year-on-year, excluding foreign exchange fluctuations. Losses widened to €231 million (around $250 million) or €1.40 a share. (Deadline)

Spotify is continuing to invest in advertising, and its ad-supported revenue grew 14% year over year and accounted for 14% of total revenue. The company said growth was driven by podcasting. (CNBC)

The company has invested more than $1 billion in building out its podcast business which currently has more than 4 million titles. But those investments have hit gross margins. (Reuters)

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And then, there’s this:

Spotify reduces staff by 6%, Chief Content Officer Dawn Ostroff to leave

A key architect of Spotify’s podcast strategy, Ostroff joined the company as it made large audio and advertising investments, acquiring production companies and making podcast deals with newsmakers and celebrities.

But the company’s aggressive investments in the podcast space have drawn more scrutiny amid a cooling economy.”

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It’s easy to believe the hot new thing will finally prove the death of Radio, but so far, we remain standing – and profitable.

We would be even more profitable if not for consolidation.

Our challenges remain:

  • over-commercialization;
  • weak talent throughout resulting in forgettable content;
  • weakening links to local communities and information;
  • under-staffing in all programming and promotion departments;
  • lack of strong, visionary leadership.

But the rumors of our demise continue to be wildly over-stated.