Music Industry

Spotify is launching the ability for users to stream music directly from their Apple Watch. 

In a Spotify support document, the company said the new streaming feature is now rolling out to Spotify Premium users who have an Apple Watch Series 3 or later. Users must also have the latest version of the Spotify app and a cellular or Wi-Fi connection. 

To listen to Spotify music or podcasts, users simply connect Bluetooth headphones to their Apple Watch. Users can navigate through their music by swiping left and right on their watch and adjust the volume via the digital crown. 

Spotify customers have been asking for support for standalone streaming via the Apple Watch for nearly two years. The company said the introduction of the feature follows a September trial among a small subset of users. 

“We’re focused on developing experiences that enable users to listen to Spotify wherever and whenever they want – regardless of the device or platform,” a Spotify spokesperson told TechCrunch. “After an initial testing period, we are now rolling out streaming capabilities for Spotify on the Apple Watch.” 

Spotify has announced that it will be launching a new Premium Family plan with parental controls -- a feature it says has been “long-requested” on community boards. 

Parents will soon be able to exclude songs with swearing, violence, and other explicit content by toggling on the parental control setting. Deactivating the feature will require the parent’s passcode, so kids won’t be able to switch off the feature themselves. 

“At a time where parents are trying to reduce screen time for both themselves and their family, we’re creating more ways for families to bond over music together, while still celebrating individual tastes and giving parents more control if they want it," Spotify's chief premium business officer Alex Norstrom said in a press release.

The music streaming giant has also added a “Family Mix” feature, which gives all family members using the account access to the same personalized playlists. Parents will be able to “control who is in each session” to personalize the playlist, which can help ensure that the playlist won’t be dominated by tunes favored by one family member. 

The new parental control feature was launched in Ireland on Monday and will roll out more widely “soon.” Spotify’s Premium Family plan costs $15 a month for up to six people who live in the same household. 

Spotify has teamed up with Disney to create a new streaming hub specifically for music from Disney films and TV shows. 

Starting Wednesday, Spotify users who search “Disney” will be taken to a dedicated hub for music featured in Disney, Pixar, and Marvel movies. Spotify has also created theme-oriented playlists of Disney music for its new Disney Hub. Examples of playlists include “Disney Princess,” “Marvel Music,” and “The Best of Star Wars.” 

The music streaming giant says its users have streamed nearly 2.5 billion minutes of Disney music so far this year. In launching the new Disney Hub, Spotify is likely hoping to persuade more users to purchase a family membership for $14.99 ($5 more than a Spotify Premium membership).

“Stream playlists full of everything from The Little Mermaid to modern favorites like Frozen, to Star Wars instrumentals, and even Marvel movie soundtracks,” Spotify said in a press release. “Plus, Disney compilations made for every part of your day—road trip, shower, or sleep time—will help ensure your life is nothing short of magical.” 

Spotify’s new Disney Hub is available in the U.S., U.K., Ireland, South Africa, Canada, Australia, and New Zealand.

Spotify’s previous rules for downloading songs offline left many consumers frustrated because of its strict limitations. Prior to its most recent update, users were restricted to downloading 3,333 songs to play offline across three devices.

Now, Spotify unveiled its latest update, and without a proper announcement, Spotify nearly tripled its download limit. Users noticed this week that the limit had been raised, and Spotify confirmed the change to Rolling Stone.

“At Spotify, we’re always working on improving the experience for our users,” a spokesperson said. “We can now confirm that we have increased the number of offline tracks per device -- from 3,333 on three devices to 10,000 tracks per device for up to five devices.”

The download limit was users’ biggest gripe with the streaming service, as being able to download songs to a computer, phone, or tablet allowed them to listen to music without an internet connection. While users still can’t download an infinite number of songs, the boost should definitely make a difference for listeners.

Spotify users without a paid subscription could soon have the ability to skip audio and video advertisements. The music streaming service has quietly rolled out the new feature, dubbed “Active Media,” to users of its free, ad-supported version in Australia.

Currently, only premium users have the ability to skip ads. The new feature would enable free users to choose whether they want to see or hear the ad or skip it entirely. Advertisers would only pay for completed views or listens and would benefit from knowing more about user preferences.

Spotify says its Active Media feature is the "first of its kind globally."

Ads tailored to users’ tastes

In an interview with Advertising Age, Danielle Lee, Spotify’s head of partner solutions, said the company believes users will only skip ads that are not of interest to them, which would allow Spotify to deliver only ads that consumers want to see or hear.

"Our hypothesis is if we can use this to fuel our streaming intelligence, and deliver a more personalized experience and a more engaging audience to our advertisers, it will improve the outcomes that we can deliver for brands," Lee said.

"Just as we create these personalized experiences like Discover Weekly, and the magic that brings to our consumers, we want to inject that concept into the advertising experience."

The company hasn’t said if or when the feature will be launched in markets beyond Australia.

In July, Spotify reported that it finished out the second quarter of the year with 180 million monthly active users -- a figure that represents an increase of 30 percent year-over-year. The company now has over 101 million ad-supported users in 65 markets globally. Its total ad revenue has reached $158 million, up 20 percent.

Apple Music now has more paying subscribers per month in the United States than Spotify.

Based on confidential details shared with Digital Music News, a recent report reviewed subscriber tallies from the country’s most popular music subscription providers, including Tidal, Spotify, Apple Music, and Sirius XM, with Apple Music now taking control of the top spot.

It was reported that both Apple Music and Spotify have 20 million subscribers, with Apple Music now hitting “20 million plus.” The exact number has not been revealed to protect confidentiality; however, trial users were not used in the final numbers.

Data shows that Apple Music has been on the rise since the start of 2018, and the lead over Spotify is only expected to grow throughout the rest of the year. Back in February, the Wall Street Journal reported that Apple Music was growing at a five percent rate in the United States, whereas Spotify was growing at a two percent rate.

The report did not indicate the amount of money each subscriber pays per month, though the experts at Digital Music News believe Apple Music to be ahead of Spotify in this category as well. The site notes that Spotify offers users a three-month free trial of Spotify Premium, student discounts, and other cut-rate plans, while Apple’s discounts are much more limited.

Global growth

On a global scale, Apple Music has over 45 million subscribers, with an additional five to 10 million trail subscribers. Apple’s free trial lasts for three months, with some exceptions in certain countries. Comparatively, Spotify has over 70 million subscribers worldwide, with nearly 160 million users overall.

Though this appears to be an advantage for Spotify, data collected from the recent release of Drake’s album Scorpion suggests otherwise. During the first week of the album’s release, Apple Music scored 170 million streams of the album’s tracks. Spotify estimated 130 million streams by comparison.

These numbers raise questions as to how active Spotify’s hundreds of millions of users are on a regular basis. Additionally, Spotify heavily promoted Scorpion for weeks, and many are questioning the platform’s engagement with its users.

Recent changes to Spotify

Despite the comparisons to Apple Music, Spotify has recently updated the free version of its subscription, which hadn’t been changed since 2014.

Free users now get access to 15 customized playlists created by Spotify that can be played in any order. Subscribers in the free tier are no longer confined to shuffle mode, and they can also listen on-demand to any song they want as many times as they want.

Free users will still have advertisements, and the tier will also feature “data saver” mode, which will reduce data consumption by nearly 75 percent.

Spotify updated its free version in an effort to keep non-paying users satisfied and to better understand the needs of users.

“The free experience of Spotify is becoming a lot more like Spotify Premium,” said Babar Zafar, vice president of product development.

It looks like Google’s Play Music days are numbered. Reports have surfaced that the tech king may move all its musical eggs to the forthcoming YouTube Remix basket. The service was slated to start a month ago, but it looks like it’ll be closer to the end of the year.

Google’s move from an all-you-can-hear music streaming service to an all-you-can-hear-and-see music streaming service puts them in an exclusive space and away from the traffic jam that Play Music has had a hard time finding a comfortable seat in.

Out of the estimated 475 million monthly music streamers, Google is thought to have fewer than 10 million users -- a far cry from ruling that space. Spotify claims 140 million monthly users, including 70 million who pay for the premium version; Pandora counts 73 million among its faithful; Apple Music has 40 million of its own; plus there’s Amazon Music, iHeartRadio, Slacker, Tidal, and a dozen more fighting over what’s left.

Google has already gone down the road of combining YouTube and music once. Its YouTube Red platform offered access to advertising-free music streaming through Google Play Music on top of "YouTube Red Original" series and movies. However, the service has yet to gain traction where others like Hulu and Netflix have.

Why is Google making this move?

In a keynote speech at South by Southwest (SXSW) this year, YouTube’s global head of music Lyor Cohen said the new offering would bring “the best of Google Play Music’s context server and YouTube’s ‘breadth and depth of catalogue.’

Cohen doesn’t pretend to be a psychic, but he realizes that changing horses in the middle of this stream could be dicey. "We know we’re late to the party. It’s okay," he said.

Still, YouTube is both a cash cow and an eyeball magnet for Google, and sticking with what made it famous has a great upside. The video streamer is on track to pull in $3.96 billion this year -- more than 20 percent of the U.S. video advertising revenue market -- and its audience is projected to reach 188 million users in 2019. These are metrics that Cohen is fully aware of.

"I’m focused on bringing diversity to distribution; and we’ll do that by adding a subscription business on top of YouTube’s already growing advertising business," Cohen remarked.

There are dozens of loose ends for Google to tie up: getting unfettered buy-in from the music labels and publishers, how it plans to convince Play Music fans to become Remix ones, and what new video content it’ll serve that’s different from all the free music videos it has now.

On Tuesday, Spotify unveiled changes to the free version of its smartphone app, which hasn’t been updated since 2014.

Spotify’s 90 million non-paying users will now get access to 15 personalized playlists created by Spotify and will have more control over their music, among other new features.

With the changes, Spotify is aiming to grow its free user count, which should create more paying users. The company has noted that 60 percent of paying users first started out as free users.

On-demand tracks

The changes were launched in an effort to keep non-paying users satisfied and to better understand the needs of users.

"The free experience on Spotify is becoming a lot more like Spotify Premium," Babar Zafar, vice president of product development, said during Spotify's presentation at an event in New York.

Spotify is launching the ability to listen to music from 15 playlists which can be played in any order, rather than in shuffle mode. Users can listen on-demand to whatever song they want, as many times as they want.

Those 15 playlists are the equivalent of about 40 hours of music (750 tracks). They’re generated by Spotify based on a user’s listening habits and are constantly updating based on a user’s listening activity.

Assisted playlisting

Spotify will also help users create playlists by suggesting songs that are similar to those they have already added or searched for. To get to know users’ tastes, Spotify will ask free users to choose their favorite artists as soon as they start using the app.

The new free version of Spotify will also include a “data saver” mode, which the music streaming service says will reduce data consumption by as much as 75 percent.

Advertisements will still run on the free tier of Spotify, since ads help the company fund its free version, as well as serve to encourage users to switch to the premium version.

The new free experience will be rolling out globally to all markets in the coming weeks.

Not long after going public, Spotify may be planning changes to its free subscription tier.

Sources familiar with the matter told Bloomberg that the music-streaming giant is planning to change its free tier to be more like its paid subscription service. The new version of the app will make it easier to use the ad-supported service on mobile devices, according to the report.

An official announcement regarding the planned update is expected in the next few weeks.

Greater control

The rumored changes would give mobile users with free plans the ability to access playlists more quickly and have greater control over what track or playlist they’re listening to. Currently, Spotify’s free tier prevents mobile users from selecting specific tracks in a playlist; users listen to whatever track comes next in shuffle mode.

Spotify went public on April 3 and is expected to focus on growing its number of users. Making the free music-streaming experience better would help it do just that.

Spotify is available in 61 countries and has a user base of 159 million, including ad-supported free listeners. The service also has 70 million paying subscribers (as of January 2018). The company predicts that it could hit as many as 96 million paid subscribers by the end of this year.

The company’s rival Apple recently confirmed that Apple Music has amassed approximately 40 million subscribers. Unlike Spotify, Apple’s music streaming service does not offer a free tier.

Following its decision to go public via an unconventional direct listing, music streaming service Spotify kicked off trading Tuesday just after 12:30 p.m. ET at $165.90 a share -- up 25.6 percent from a “reference price” of $132.

Share prices dropped as the day went on, ending at $149.01. While early buyers suffered losses on paper, the volatile price swings that many had expected were not seen.

By the end of the session, Spotify’s market valuation was $26.5 billion. Investors had initially pegged the company’s value at $30 billion when the market opened.

“It’s a fair market price. It’s not manipulated or set by any puts and takes by banks or institutional investors,” Chi-Hua Chien, an early investor in Spotify who is now at San Mateo, California-based venture capital firm Goodwater Capital, told Reuters.

‘Our focus isn’t on the initial splash’

Spotify's founder and CEO, Daniel Ek, said in a blog post Monday that the listing wasn't supposed to be the most important day for the company.

"Normally, companies ring bells. Normally, companies spend their day doing interviews on the trading floor touting why their stock is a good investment," he said. "Our focus isn't on the initial splash."

“Spotify is not raising capital, and our shareholders and employees have been free to buy and sell our stock for years,” Ek wrote. “So while tomorrow puts us on a bigger stage, it doesn’t change who we are, what we are about, or how we operate.”

Focusing on the long term

Despite reporting a loss of $1.5 billion last year in the wake of profitability challenges, Ek remains optimistic about the future of Spotify.

At the end of 2017, Spotify had 157 million monthly active users and 71 million premium subscribers. The company restated those metrics two weeks ago, eliminating 2 million users from its monthly active user tally to account for fraudulent streams from people using hacked apps.

The company plans to grow its business and make a profit by investing heavily in “developing our two-sided marketplace with new and better product features and functionality for users and creators.”

Its growth strategies include entering new markets, further penetrating existing markets, continuing to invest in its advertising business, and expanding non-music content.

Following its decision to file for IPO in a non-traditional public listing, Spotify announced that its stock will start trading directly to consumers on April 3. The company will trade under the ticker name “SPOT” on the New York Stock Exchange.

The music-streaming service announced the date at its “Investor Day,” a live-streamed, open-to-the-public event designed to introduce the company to public market investors.

CEO Daniel Ek said he chose to go public via direct listing because “going public has not been about the pomp and circumstance of it all.” Spotify will forgo the traditional roadshow meetings and media interviews typically involved in an IPO.

The company says the goal of this offering is simply to "offer liquidity for shareholders."

Ups and downs expected

The nature of direct listing is likely to result in ups and downs during its early days on the market. Spotify said in its filing that "the trading volume and price of our ordinary shares may be more volatile."

Last year, the music-streaming company had an operating loss of $461.3 million and revenue of $4.99 billion. As of December, it had 71 million paying subscribers and more than 159 million monthly active listeners -- “but we’re just getting started,” Ek said in his “Investor Day” presentation.

Transparency will be a key focus for Spotify going forward. Ek said the company plans to focus on upgrading free users to premium subscribers, reaching scale across multiple platforms, and adding personalization (both for users and for the company to collect data on users’ habits).

iHeartMedia Inc., the parent company of iHeartRadio, has filed for Chapter 11 bankruptcy after years of struggling with $20 billion worth of debt.

The radio broadcasting network announced that it has reached an agreement with creditors to restructure more than $10 billion of that figure, essentially cutting its debt load in half.  

Bob Pittman, chairman and CEO, said the agreement is “a significant accomplishment, as it allows us to definitively address the more than $20 billion in debt that has burdened our capital structure.”

“Achieving a capital structure that finally matches our impressive operating business will further enhance iHeartMedia’s position as America’s #1 audio company,” Pittman said in a statement.

Listeners won’t be affected

The bankruptcy proceedings won’t affect iHeartRadio listeners or concert-goers. iHeartMedia “will continue operating the business in the ordinary course as a leading global multi-platform media, entertainment and data company,” the company said.

iHeartMedia has been burdened by debt since 2008 after the leveraged buyout of billboard company Clear Channel Outdoor. The company spent upwards of $1 billion on interest payments last year and has more than $8 billion in debt maturing by the end of 2019.

"The heavy debt burden became unsustainable during the persistent long-term secular decline of the radio broadcasting business," analyst Sharon Bonelli of Fitch Ratings told CNN.

The bankruptcy comes just two months after Cumulus, the second-largest radio company, offloaded $1 billion in debt.

iHeartRadio owns around 850 stations across the country, as well as a streaming service and an outdoor advertising company. It also runs the iHeartRadio Music Awards and other live events. By the end of 2016, the corporation had 14,300 employees.

Spotify has had enough of hackers trying to engineer ways around paying for its Premium features, and it’s giving customers using those workarounds one last chance to stop.

TorrentFreak, a pirating watchdog, reported that Spotify sent emails to an undisclosed number of recipients warning that the use of such services was against its terms of service and could cost them their account.

The email notifications read: “Dear user: We detected abnormal activity on the app you are using so we have disabled it. Don’t worry — your Spotify account is safe. To access your Spotify account, simply uninstall any unauthorized or modified version of Spotify and download and install the Spotify app from the official Google Play Store.”

Spotify didn’t specify what apps it’s focusing on, but as with many paid-for services, there’s always someone somewhere who’s engineered a way around having to pay for services.

While many users probably know full well they’re tricking the system by using one of the service-pirating apps, there are those caught off guard by the notice and, on Spotify’s community forum, some claimed naivete.

Spotify feels one mulligan is sufficient and reaffirmed its intent saying, “If we detect repeated use of unauthorized apps in violation of our terms, we reserve all rights, including suspending or terminating your account.”

What people are trying to get for free

For an average of $120 a year, Spotify’s Premium subscribers get ad-free streaming, the option to download songs so they can listen offline, unlimited skips, shuffle play, and high quality audio. Non-paying users are limited to shuffle play.

The service’s Premium tier ranges from $4.95 a month for students, $9.95 for the general public, and $14.95 a month for its family plan.

Tightening the security of its service is of prime importance for the music streaming company. Just last week, Spotify filed for an IPO in hopes of capitalizing on an estimated worth of $23 billion, and it can’t afford to let its revenue stream be watered down.

In its filing, the company claimed 71 million paying subscribers -- nearly 45 percent of its total user base -- going as far as saying it believed that figure “is nearly double the scale of our closest competitor, Apple Music.”

Not your grandfather’s transistor radio

With traditional terrestrial radio and record stores flat on its back in today’s digital world, personalized music streaming services like Spotify, Amazon Music, and Apple Music have broken out as the music industry’s saviors. Or, to put it in Spotify’s words, “You are what you stream.”

There’s no telling where music stream subscriptions will end up, but devices like the Amazon Dot and Google Home are carving out new space in the digital world in hopes of making music available anywhere, anytime, anyhow.

Amazon said it sold “tens of millions” of Alexa-enabled devices worldwide over the 2017 holidays, and Google claims it sold “more than one Google Home device every second since Google Home Mini started shipping (in October).”

Spotify, the world’s largest music streaming service, has officially filed to go public in a risky approach called “direct listing.” The company will sell shares directly to the public without banks serving as underwriters to set pricing.

The company intends to trade under the ticker name “SPOT” on the New York Stock Exchange and may start doing so as soon as the week of Mar. 26. The price of Spotify shares traded on private markets indicate the company could be worth as much as $23 billion.

71 million subscribers

The filing revealed that the company hasn’t suffered in terms of expansion in recent years. As of December, the company had 159 million monthly active users and 71 million premium subscribers (a figure Spotify claims is "nearly double the scale" of its rival, Apple Music). 

However, the music service has struggled to turn a profit. It lost $1.5 billion in 2017, $1 billion of which was from a non-recurring expense due to convertible notes from a transaction with Tencent in December 2017. 

Last year, the company’s operating loss hit $461.3 million -- up from $425.9 million in 2016.

Overcoming economic challenges

Like other streaming services, Spotify’s profitability challenges can be traced back to its business model. The more money it makes from streaming, the more it has to pay out to music labels, publishers, and songwriters in licensing fees.

Spotify plans to grow its business and make money by investing heavily in “developing our two-sided marketplace with new and better product features and functionality for users and creators.” 

Its growth strategies include entering new markets, further penetrating existing markets, continuing to invest in its advertising business, and expanding non-music content. 

"We set out to reimagine the music industry and to provide a better way for both artists and consumers to benefit from the digital transformation of the music industry," the company said.

"Spotify was founded on the belief that music is universal and that streaming is a more robust and seamless access model that benefits both artists and music fans."