Spotify Will Die an Expensive and Embarrassing Death
Why is it the darling of private equity and Wall Street?
Whenever I conclude Spotify is a poser , I return to the drawing board. I feel dirty, like I'm thinking impure thoughts about a hot mom at my kid's school or breaking the 11th commandment -- Thou Shall Not Say Anything Even Remotely Negative About Spotify .
Soon, Goldman Sachs (GS) will tell us that Jesus Christ listens to Spotify.
Forgive me for being hyperbolic or sacrilegious, but, my fragile child, things have gotten ahead of themselves, even out of control.
Anecdote alert : I paid for a monthly subscription to Spotify. I still can't figure out exactly what I'm paying for. Spotify feels like a glorified iTunes. A really busy, not-very-useful, not-even-close-to-intuitive iTunes.
Spotify makes me want to beg Apple (AAPL) for forgiveness. Like so many others, I have been hard on iTunes. But, man, it hits the spot. It's everything it needs to be. The modest version 11 upgrade, due any minute now, ought to be just right.
These are complementary services:
iTunes: When you know exactly what you want to listen to. After all, your library contains songs you purchased and/or downloaded. iTunes also plays a key role throughout the purchase process, particularly at fulfillment. Pandora: When you want personalized radio and discovery. YouTube: You know what you want. Or you seek videos, covers, bootlegs, lyrics and/or exploration/discovery.
Spotify tries to play each role, specifically with respect to iTunes and Pandora. I'm sure that's possible, but Spotify just doesn't do a very good job of it. Jack of many trades, master of none.
But that's all subjective stuff. For every person like me who just can't get with Spotify, there are several -- or, given the number of users it claims, like one-tenth of a person -- who love the platform. (We won't even get into Spotify's scale problem; something Pandora does not have to deal with).
As a business, Spotify has no future. With Spotify in the news so much, I'm not quite certain why Pandora gets branded as the company with the unsustainable business model. That could not be farther from the truth.
Earlier this year, Patrick Carney of The Black Keys said this about Napster founder Sean Parker, Spotify board member and investor, in response to Parker's absurd claim that Spotify would make more money for the music industry than iTunes: