Spotify Is Going Public CEO Says It Will BeNow Some Kind of Global Cultural Nexus or Something2/28/2018
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Spotify Is Going Public, CEO Says It Will Be Now Some Kind of Global Cultural Nexus or Something http://ift.tt/2oFvQoc Stockholm-based streaming giant Spotify finally made it official and filed documents for its much-rumored plans to go public on the New York Stock Exchange on Wednesday, pursuing the unusual option of a direct listing instead of a traditional IPO. Per the New York Times, that process is one “in which no new stock is issued—and therefore no money is raised,” and that will allow investors and insiders to freely trade shares on the market. In other words, it bypasses the traditional method by which Wall Street financial institutions would stage-manage the entire IPO process, which means Spotify shares could immediately experience volatility as the company sprints out the door. In his 1,259-word founder’s letter, Spotify CEO Daniel Ek was significantly more orthodox, in the sense that like every tech CEO, he is now touting a vision of their company becoming the cultural platform of the future or something. No, really, Spotify is now peak corporate Burning Man:
Later, Ek promised to “democratize the industry and connect all of us, across the world, in a shared culture that expands our horizons,” adding that what “started out as an application and grew into a platform must now become a global network—one that recognizes and nurtures the interdependent relationships between creators, producers, publishers, labels, fans, and everyone in between”:
It goes on and on like this, though as Business Insider noted, it’s at least “respectfully shy” of Facebook CEO Mark Zuckerberg’s 2,189-word 2012 manifesto. Advertisement Though Spotify has a strong userbase, it has long struggled with songwriters and publishers who claim streaming services stiff them on royalties, and MarketWatch noted its filing documents indicate that it may have screwed up internal financial procedures that could result in lawsuits if it turns out the company underpaid copyright holders. As the Wall Street Journal added, while Spotify claims to be worth up to $23 billion and is scaling quickly, its losses are also skyrocketing:
However, the Journal wrote Spotify has less pressure to raise cash because it has a positive free cash flow, in part due to upfront subscription fees “that are deposited in the company’s bank account but not immediately reflected on its profit-and-loss statement.” Advertisement Spotify now claims to have 159 million monthly active users with 71 million paid subscribers, which is impressive growth. But Bloomberg recently noted that rivals with very deep pockets like YouTube, Apple, and Amazon are all trying to scale up their operations and have shown a willingness to play dirty when it comes to competitors’ access to their hardware products. They’re willing to burn cash on music just to create synergy with that hardware, whereas Spotify doesn’t have the luxury of being funded by a larger product line. Apple Music in particular is preloaded on Apple devices and has grown immensely as of late in the US, regularly pulling out its huge wallet to pay for exclusive music deals. It may yet turn out that piles of cash and multi-platform market dominance will end up determining the future of the streaming market, not soaring utopian ambitions. [Business Insider/New York Times] Digital Trends via Gizmodo http://gizmodo.com February 28, 2018 at 11:12PM
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