This & That

Sitar Teli Provides Much Needed Reality Check Regarding Music and Start-Ups

Thirty Roses

At a Midem’s June 3 panel titled ‘Startups & Corporations: from Competition to Coopetition’, Connect Venture’s Sitar Teli offered a contrary opinion to that of her peers. While the other panelists spoke highly of the music industry and its  relationship with VC and startup culture, Teli strongly disagreed.

When asked if music and tech companies have arrived at a place which is helpful for all involved, most of the panel felt it had. Teli interjected to say:

“I’m going to say no, it’s not, and it’s been a really shitty industry to work with for years. “It was hit much harder by a lot of the early internet stuff that happened, particularly file-sharing, than other content industries. And the reaction to that was to [become] distrustful of technology companies.

It can be a little awkward to watch at times but all important discussions are uncomfortable. Music tech startups are really…

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This & That

The 2 Spotify Charts You Need To See

Interesting & topical reading, right here (Y)

Music Industry Blog

Tuesday’s media scrum around Spotify’s financials illustrate that whatever ground Apple and Tidal may have made in recent months, Spotify clearly remains the poster child / bellwether for streaming. The stories oscillated between the broken nature of the underlying economics to how streaming is the future of the music business. Both are true. But a closer look at the numbers reveal some even more important findings.

spotify margin per user

Rights costs are Spotify’s Achilles Heel. Rights and associated costs accounted for 83% of Spotify’s 2015 revenue, up from 81% in 2014 and this resulted in a dramatic fall in Spotify’s gross margin per user: down from $4.20 in 2013 to $3.45 in 2015. This is particularly challenging for a model with already wafer thin margins. A number of factors underpin this decline:

  • Discounted promotions: Promos such as the £0.99 for 3 months have supercharged Spotify’s growth for the last 18 months. But as…

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