I hate stupidity and Spotify have been very very stupid. Numbers don’t lie: 75% of their audience is the freemium tier and they provide 10% of Spotify’s revenue. Or to reverse it 25% of their clients provide NINETY PERCENT of their revenue.
I haven’t seen their conversion rates but that will nail down a whole lotta this story but whatever they might be, with an open opportunity, Ek and his elk had one job, up paid subscriptions and up em hard and they failed. Why? They sold to their base when they should have spent 100% of their energy into selling it to the world.
Now, the last refuge of a moron, they are changing their model by expanding into video. According to Hypebot, yesterday’s press conference announced “biggest set of changes yet with the addition of video, original content and a passel of personalization.”
This won’t do.
How can you go into another business when the business you have is not under control. Where is the full tilt power rush to get new customers? Why are the messing around with new ideas when the old ones aren’t firmed up? It makes no sense to me at all, the only thing these guys need to do is place ads looking for paid subscribers. Tell em subscribe now and get a free boom box, tickets to your favorite show, a sweepstake to meet Taylor Swift… well, maybe not Taylor Swift but you know what I mean.
The blame goes to the majors, and maybe deservedly so, but Spotify needed to push subscriptions like a a bitch, it was the one that could save them from the hell of their existence so ungovernably tied to powers that can destroy them. How do they do this, how do they deal with the future when all it takes is a change of heart for them to be out of business.
Paid subscriptions was their lifeblood, it was exactly what they should’ve been doing, it would have protected them from not being able to reach compromises, if 25% of their business was freemium, who would care. They think Freemium is the portal to premium but it doesn’t appear to be quite that.
These guys have a problem and video won’t solve it.