![]() Now the next problem: original content is expensive and Spotify's competitors are all moving into this space. The false notion that you can convert every subscriber to a more expensive subscription.) ![]() A tactic to make the company look more successful for their IPO listing, but it has been clearly to the detriment of the company's bottom line. Ignoring ad revenue, which has been described as minimal, simple math shows that their average "premium" subscriber pays around $58 euros a year, this is less than HALF the cost of the full price subscription ($119.88 euro a year) - since we know that people do indeed pay full price, this reveals that a majority of their "Premium subscribers" are utilising a promotional discount of 50% or more, this is why Spotify have had recent spikes in paid subscribers, they've been using very cheap promo offers to artificially drive up membership. The below is just an straight forward evaluation for why this is going to be a very challenging time for Spotify.įirstly: The lie is calling them "Premium Subscribers" - the reason why they don't turn a profit is because they're overloaded with promotional memberships. Although I'm no longer a subscriber (I prefer what Apple is doing with Apple Music) I see the two services as indirect competitors due to their differing priorities. I quite like Spotify, they were early on the market and introduced a product at just the right time and technological mix.
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