Spotify

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If you can just proofread it, please.

Introduction

Observing the developments regarding the situation between Spotify and the Artists, I believe that the statement is correct and the reason why Spotify is behaving in this way is because its main goals are all about making profit. I think that a company who has not strong foundations will be unsuccessful. In my opinion, a logic based on immediate profit to the detriment of a strategy and a plan of action which include growth and expansion in a long term, it is not, a winning formula.

Spotify does not reciprocate the effort of Artists. For example Aloe Blacc, the singer of the song “Wake Me Up” from Avicii (which is one of the composer too) said that he felt cheated from Spotify. Although the song was the most streamed of all the platform, with hundred of millions, he earned only twelve thousand dollars. He continued saying that because of this way of thinking everyone is trying to create something from nothing. In the last two decades the music business lost 7 billion dollars, and this is because the true worth of things is disappearing. A good example he did was the one about “Imagine” from John Lennon which cannot have the same worth of “Who Let the Dogs Out?”. This makes no sense at all.
Based on the Swot analysis, the current Spotify’s strength is that for users it is a very good streaming service. It has to be said that is not too great as a strength compared on the bad sides, which are going to be analysed in the following paragraphs.
The weaknesses are the bad relationships with Artists, day after day the situation is getting worst. It is well known that Artists don’t like streaming services, due to the insignificant payment they receive and the lack of meritocracy to them. Spotify does not reciprocate the effort of Artists. For example Aloe Blacc, the singer of the song “Wake Me Up” from Avicii (which is one of the composer too) said that he felt cheated from Spotify. Although the song was the most streamed of all the platform, with hundred of millions, he earned only twelve thousand dollars. In the last two decades the music business lost 7 billion dollars, and this is because the true worth of things is disappearing. A good example he did was the one about “Imagine” from John Lennon which cannot have the same worth of “Who Let the Dogs Out?”. Taylor Swift for example thinks that albums should be sold in the traditional way, physically and digitally. In an interview she compared streaming services to computer piracy, she went on saying that this is the reason why music is losing its value. Thom Yorke said that spotify is “the last desperate fart of a dying corpse”.
The opportunities are not to be underestimated, Spotify is losing money day after day. It counts more than seventy-five million of users but only thirty are paid users, against 45 million free users. On the other hand there is Netflix who is having an enormous success, they are well known for charge everyone who use their services. The problem is easy to detect, Spotify needs to charge every users, in order to earn more and hopefully pay more the Artists. If this is the way and nothing is going to change in a few years there will be almost two billion users and less than 20% paying; it means no profit. They need to monetise all the subscriptions as soon as possible, they need a major change in the strategy, they have to move to a paid economy.
The threats have to be taken into consideration, there are possibilities that users might be unwilling to pay after being used to have the service for free.
The main problem and the main reason for Spotify being criticised is that for users it is a very good service, but for stakeholders it is almost unprofitable and it is not worth it. Usually the deal it is between the streaming platforms and the label. For example Spotify pays the Artists based on the percentage of their songs’s streams and then a formula is applied to pay the label. The problem is that it is up to the label paying the artist, it happens that generosity it is not their virtue but it is also the Artist’s manager duty to ensure a good payment to the Artist. Maybe a very big Artist like Justin Bieber with hundred of millions of streams could do money out of it but for independent Artist the amount is insignificant. With Spotify the figures are 0.0011 cents per stream to the Artist which means that for earn a thousand dollars would be necessary almost a million streams.
Conclusion

In conclusion I believe that Spotify should charge every users like Netflix does, to be able to earn more and pay more the Artists and consequently reinstall a good relationship with them and go away from the eye of the storm. Obviously, I assume that Artist’s manager should do a better job with Major Label, concerning the income percentage based on the payment from Spotify.