Spotify, the master challenged the “streaming” of music

AFP

AFP

Thursday, 1 march 2018 11:29

UPDATE
Thursday, 1 march 2018 11:35

Look at this article

STOCKHOLM | Spotify reigns challenged on the “streaming” of music. Side A: instrument of “democratization” of the music fit to ” improve the world “. Side B: diffuser raptor who requite evil the real creators, artists and majors.

“I truly believe that we can improve the world, song after song “, has modestly ventured to its CEO Daniel Ek in the documents to the ipo delivered Wednesday to the gendarme american financial (SEC).

From Madonna to Daft Punk, songs, Spotify has released million since its inception in 2006 to Rågsved, a suburb without charm of Stockholm by Daniel Ek and Martin Lorentzon.

And with 71 million paid subscribers, the platform which has revolutionized the listening to music enjoys a comfortable lead over its competitors, Apple Music, number two in the sector, Google Music, Tidal, Deezer or Napster.

And yet Spotify has never been profitable.

By inviting them to Wall Street, the young grows to become the world’s number one streaming music hopes to finally convert it to hard cash its “success story” that has become a legend hightech.

In 2006, Ek and Lorentzon, that the internet bubble has gold covered, imagine a music distribution service legal in the face of the platforms of download pirates that abound then.

After ringardisé the vinyl, the CD enters its twilight while the mobile music is still only science-fiction: a year prior to the launch of the first iPhone, this is the golden age of “torrent” files and low-speed.

Ek and Lorentzon named “Spotify” their joint venture “Goldcup D1650” and join Felix Hagnö, co-founder with Lorentzon the digital marketing company Tradedoubler.

The three men grope, share mp3 files that they store on their hard drives.

Spotify has finally launched in October 2008. Daniel Ek says he has “lived in the aircraft for two years” to convince the majors to open up their catalog.

The record companies require to enter the capital of Spotify. In 2009, they control nearly 20 %.

Ek and Lorentzon are betting a portion of their fortune to boost the confidence of investors.

The anointing of Zuckerberg

Bet to win on all the tables. In the autumn of 2009, Spotify receives the anointing of the public of Mark Zuckerberg, founder of Facebook: “Spotify is so good “, he wrote on the network.

However, that the majors seem to soften as the root of their traditional revenue.

In 2011, Spotify landed in America and combines with Facebook: the service claims its first million paying users, five million the following year.

For the visionaries they are, the creators of Spotify does not see it coming the explosion of the smartphone. The Swedish has not developed App and when it is finally available, it has not negotiated with the owners of the operating systems.

“We would have been able to die at the time,” will recognize Daniel Ek.

Then begins another fight for Spotify: the flagship artists accuse the service of “streaming” of their pay too little, in addition to cannibalizing album sales.

For these reasons, Taylor Swift broke his contract in 2014. She will return in 2017.

“The hacking does not give a penny to the artists: nothing, zilch, zero “, prevails Daniel Ek.

According to the website The Trichordist, Spotify has paid last year’s average of 0.3 crown (0,03 euro) per song being played.

In comparison, the value of the shares of Daniel Ek and Martin Lorentzon expect, respectively, 1.6 and 2 billion crowns (160 and 200 million euros), according to the financial daily Swedish Dagens Industri.

“The Winner Takes It All”

“When Daniel Ek wrote that Spotify wants to “democratize” the music industry, it sounds hollow (…). The big four record companies last year accounted for 87 % of the content on Spotify, ” noted the newspaper Thursday.

Even reserve for Johanna Kull, an analyst at Avanza, according to which Spotify is the name of a model without sharing. “The Winner Takes It All” (The winner takes it all), ” she said in reference to a title of Abba.

In the perspective of its ipo, Spotify, which has spent lots of investment in 2016, has found the money with an agreement of reciprocal cross-holdings with the technological giant chinese Tencent.

An approximation questionable for some analysts who are concerned about the links between Tencent and the chinese State. “Be indirectly a business partner with the chinese government, is not necessarily clearly seen in the United States “, says DI.

As to the future shareholders equity of Spotify, prompted by estimates that are more crazy who value the service at more than $ 23 billion, “they should expect a trip turbulent,” predicts Johanna Kull.