Launch a DIY upload service (again) - but this time, charge for it What, then, should Spotify do in the face of the cost/opportunity conundrum presented by DIY music? To my mind, it has three options. How lucrative is that DIY sector? One only need look to Believe, the parent of indie distribution giant TuneCore, which is reportedly plotting a $2 billion-plus IPO next year. It can’t be long before Wall Street analysts twig that Spotify is allowing the vast majority of revenue associated with the DIY music sector to live entirely outside of its walls. Hosting this ocean of DIY artist tracks isn’t only an expense for Spotify: It’s also an unexplored revenue opportunity. The consequence of failing to convince Wall Street of this seriousness goes beyond mere share price: History tells us Daniel Ek’s CEO standing could become a target should his company stumble in its quest. But “Discovery Mode” also denotes an important new era for the loss-making Spotify, suggesting that the company is under pressure - and willing - to deploy swift margin-improving tricks to convince Wall Street that it’s serious about finding a path profitability. The news kicked up fierce debate over whether “Discovery Mode” actually constitutes a form of streaming payola. On November 2nd, Spotify announced “Discovery Mode,” a tool that enables labels and artists to gain influence over algorithmic recommendations in exchange for agreeing to a lower royalty rate. This comes at a particularly interesting juncture for Daniel Ek and co.
This eruption in track volume on the likes of Spotify and its rivals can largely be credited to one segment of the music industry: the DIY, a.k.a independent, artist market. Now it’s over 70 million.” Last week, YouTube’s Global Head of Music Lyor Cohen announced within a slew of new stats about music consumption: “YouTube Music has more than 70 million official tracks, more than any other music service.”Īnd in early November, Spotify CFO Paul Vogel told his firm’s investors that the streaming service now has “65 million to 70 million music tracks” in its library - up by 15 to 20 million on the “50 million” estimate that Spotify reported at the close of 2019. In recent job ads, Apple Music is telling would-be candidates: “We started with 1,000 songs in your pocket. Music streaming services have a new favorite number.
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