Hi, this is Wayne again with a topic “How Does Spotify Work?”.
Thanks for watching tech, quickie click, the subscribe button then enable notifications with the Bell icon. So you won’t miss any future. Videos remember when we were all flinging, songs back and forth across a Napster and LimeWire and getting cease and desist letters from some suit. At a record label or alternatively, trying to figure out how many 99-cent songs we could fit into our monthly budget and our 4 gig iPod. Well, much of that changed when Spotify started, offering free internet music streaming in 2009, trying to appeal to those who wanted a legal way to listen to their favorite artists without spending buckets of money on DRM, protected tracts and appeal, they did less than ten years later.
Spotify now has 170 million active users and a library of 35 million songs, thanks to licensing deals with three of the biggest rights holders in the music industry, Sony Warner and Universal, and also Merlin a key agency that represents a large number of smaller, more independent artists. I mean to say: things have gone well would be an understatement: they’re even listed on the New York freaking Stock Exchange and that’s a big deal, but how exactly do they survive by taking something that costs money, music and giving it away for free? Ok, yes, yes, the obvious answer is advertising. Hence the guy shouting about the sales event at the local car lot, when you’re just trying to chill out to something mellow but they’ve also featured a premium subscription option since 2008. That offers offline listening the ability to choose a specific song on mobile and an ad-free experience similar to Netflix is video streaming service which launched the year before, but, unlike Netflix, Spotify isn’t yet profitable, although it is making enough to stay afloat.
Ok, but how does that work? Well, Spotify brings in significant revenue from both advertising and premium subscriptions, but they also spend a great deal on licensing songs. People actually want to hear around 10 billion dollars so far, something that’s actually been a source of some controversy. You see even with these huge sums of overall royalty fees. The amount of money that goes to the record label per playback can seem insultingly small, with many rights holders only making around three-quarters of a cent each time someone listens to one of their tracks, leaving only some portion of that for the actual artist.
You can’t even say they’re making pennies per play in 2014. The situation escalated to the point that Taylor Swift very publicly removed all of her songs from Spotify, though in fairness to them at tea, Swift’s level of Fame, a solidly performing album could net five or even six figures per month. So we don’t blame you for not feeling too bad for her and Radiohead. I mean I’ll feel bad for Radiohead they’re artists.
Of course, Spotify popularity isn’t only due to its vast song catalogue. It used to rely on its own servers and peer-to-peer connections for content delivery, but now much of Spotify chopper ations are handled through Google cloud similar to how Netflix uses Amazon Web Services. Instead of its own servers to process user requests and recommendations, which you can learn more about appear leveraging a large redundant cloud service, as well as storing its files in OGG Vorbis, which is not a malicious alien race, but a compressed format that takes up less space Than mp3, while maintaining quality has given Spotify reputation for being a fast, reliable streaming application, at least so far until they can figure out how to turn a profit, their future will always be in question, but for now, investors see enough potential to continue to fund them. Maybe the plan is to pull a page out of Netflix’s book and launch their own record label cutting out the middleman, so both Spotify and artists could make more money.
Hopefully, they’ll do this by the time tech wikis, debut, album bite me drops next year and trust me. It’S a real summer, sizzler speaking of Sizzlers, keep your finances hot and fresh with fresh books. Are you racing against the clock as a freelancer it’s challenging, but with the growth of the internet, there’s never been more opportunities for the self-employed to meet. This need to check out fresh books, cloud accounting software designed for the way you work.
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