A couple of decades ago it was unlikely an aspiring musician would get the opportunity to record their own music. If you were in a band and wanted to record a proper sounding album you would need to be signed to a record label which would pay for the advance for you to make an album. The advances in digital recording in the last decade have it made it possible for musicians with even a modest budget and proper skills to make something that may be worth listening to. Although, it’s great that musicians now have the ability the record in the privacy of their own homes it has saturated the market with an excess of music on the internet that would take endless hours to sift through. Luckily, if you have recorded something worth listening to their maybe a couple of ways you can rise above the masses and get your music heard.

1.Streaming music services

This day and age more and more people are subscribing to different online streaming music services like Spotify, MOG, and Pandora. A lot of musicians might not know that submitting your music to these online services is usually a very straight forward process. For example, in order to submit your music to Spotify you would have to license your music through an artist aggregator like CD baby or to Ditto. Services like this also make it possible to submit to other digital services like Itunes or Amazon at the same time. The process for submitting your music can vary for each streaming services but from what I have researched I haven’t found one that is to hard to accomplish.

2.Social Media

If you haven’t already it is integral that you join as many social media outlets as possible. Everyone knows about Facebook and Twitter but there are other sources as well like Pinterest, Bebo, Netlog that could be a valuable way to promote your music. There are lots of interesting ways you can market your music through social media.Think outside of the box so people can get interested and involved with your music. For example, bring a video camera in the recording sessions of your band making a new album, then post the videos on YouTube and then go on Facebook to tell all your friends about it.

3. Radio Stations

Don’t forget about the power of radio stations. The good news is that are a lot of small independent radio stations on the internet that you can submit your music to. Services like shoutcast and live365 have thousands of radio stations that you can try to submit your music to. You obviously want to submit to stations that cater to your genre and have a decent amount of listeners. Sirius radio has over 20 million subscribers so make sure you submit your music to them.

4. Soundcloud

If you haven’t heard of Soundcloud yet you need to start taking advantages of these services. Soundcloud is a service that dedicated to letting people distribute and listen to sound files. It is unique in that it lets artists have their own distinctive URL which they can then embed on their own website. It is also very easy to integrate with Facebook and Twitter. If you are a paid member you are granted more hosting space and can distribute to more groups.

5.Get reviewed

Hopefully, other people will appreciate your music as much as you do. That’s why it important to submit your music to different magazines and websites.A good review on a popular website like “pitchfork” can catapult a band from playing local bars to being on a national tour. Tiny mix tapes, drowned in sound, and the a.v. club are just a couple of places you should be submitting your music to.

These are only a couple things you can do to get your music heard. There is a lot of competition out there but if you make quality music and use the methods that are at your disposal you are bound to get heard

Irving Berlin lived at the right time. So did Doc Pomus. And Bernie Taupin. Harlan Howard, Ellie Greenwich, Jeff Barry, “Yip” Harburg were also lucky to be born when they were. In fact, practically the entire Songwriters Hall of Fame, pre rock and roll, should consider themselves lucky they were born when they were.

Why?

None of them had to worry about Pandora, Spotify or any other music streaming service.

“God Bless America”, “White Christmas” (Berlin); “Save the Last Dance for Me”,” Lonely Avenue” (Pomus); “Tiny Dancer”, “Candle in the Wind” (Taupin); “Streets of Baltimore”, “I Fall to Pieces” (Howard); “Leader of the Pack”, “River Deep, Mountain High” (Greenwich/Barry); “It’s Only a Paper Moon”, “Somewhere Over the Rainbow” (Harburg) – these are just a few examples of songs written by NON-performers. Those titles are amongst the most popular songs written in the past 100 years. Any of those – and hundreds more – have been successfully recorded by dozens, perhaps hundreds, of artists during that time. The songwriters received royalties based on the number of records sold and on the sales of sheet music and songbooks containing the fruits of their labors.

When the item sold is a physical item (LP’s, CD’s, cassettes) a pre-set mechanical royalty comes into play. The mechanical royalty is set by Congress and has been since 1909 when the rate was established at two cents. The current rate is set at 9.1 cents (a bit more if a song is over 5 minutes). Downloads are also subject to these rates. Sheet music is generally a % of the cost of the item.

While there are still myriad ways in which the songwriter was denied the full royalty rate, some legitimate and some not so much, most of these were front and center to the songwriter. That at least allowed the songwriter to make an informed decision or at least understand where they were taking a hit to the established royalty rate they were entitled to collect.

Collecting these royalties and distributing these monies are generally done by companies such as ASCAP (American Society of Composers, Authors and Publishers) and BMI (Broadcast Music, Inc) in the US and similar organizations outside the US.

Radio royalties are generally collected as a percentage of advertising revenue and songwriters receive their share based on formulas designed to impart some level of fairness. In addition bonus money is available for songs that are played over X amount of times in a designated period (typically a quarter) or that have established themselves as all-time perennials or standards (think “You’ve Lost that Loving Feeling” for a contemporary example). Whether or not these formulas truly properly distributed the collected fees to the songwriters is another discussion, but simply put the percentage used in calculating the gross amount was set across the entirety of the radio medium.

Radio stations derive their revenue from advertising sales. Stations are free to set their rates based on what the market will bear; free to decide how many minutes of ads per hour will be run and decide the mix of 60 seconds, 30 seconds, 15 seconds or even shorter lengths ads to make up the content. While the average today is around 9 minutes, stronger economic times have seen as much as 20 minutes per hour. The key here is that each station has the responsibility to understand their market.

That brings us to streaming services such as Pandora and Spotify. These types of outlets pay on a per 100 songs basis. Pandora pays 12 cents/100 and Spotify 35cents/100 (Spotify is an on demand service, hence the higher rate). Another way of looking at this is that you need to go to THREE spots to the right of the decimal to reach a number (.0012 for Pandora and.0035 Spotify ).

So, for the solo performer who pens the tune they sing, self-publish and releases on their own label ONE MILLION plays will yield $1200 in royalties from Pandora and $3500 from Spotify. Of course most music is not made by solo performers. Many songs are written in collaboration. Most artists do not set up their own publishing houses or recording labels. That means the royalties are split amongst a number of involved parties.

Contrast that with the mechanical royalty rate of 9.1 cents. One million unit sales will yield $91000 in royalties for the songwriting copyright alone.

Now by now you may be wondering why all the songwriters listed at the start of this article were lucky they preceded Pandora and other streaming services? After all streaming services allow more music to be heard by more people for longer periods of time than ever before. One is no longer confined to hearing only what – and when – a radio station decides to play a specific song. Or any song for that matter. Isn’t the opportunity for more people to hear a singer or a band more often a great way for these performers to make themselves known to a wider listening audience? Doesn’t this promote their “brand”, allowing them to increase ticket sales, merchandise sales, performance royalties from their labels? Well, yes it does. EXCEPT the artists listed above – and so, so many more unnamed and unknown – are NOT performers. Their revenue is the song itself.

That is why Pandora’s request to Congress to reduce the amount of royalties they pay is so wrong.

Pandora, quite simply, is looking to maximize their profits on the backs of the very folks who create the music that gives Pandora the reason for their existence.

Pandora currently has two primary revenue streams – monthly subscriptions (that are ad free) and limited hourly ads that broadcast to non-subscribing listeners. Pandora is making the argument that their current schedule of royalty fees is costing them too much and preventing them from turning a profit.

There are two answers to that:

1) Increase your revenue streams (higher subscription fees and/or sell more ads).

2) Why is Pandora guaranteed a profit? That is, what makes Pandora different than any other business? If the business model does not work – change the business model.

Tim Westergren, Pandora’s founder, has recently posted on the Pandora website his rationale (justification?) for his company’s seeking a new royalty payment structure read it here: http://blog.pandora.com/2013/06/26/pandora-and-royalties/ ). The irony, of course, is that Pandora is now “player” – not an upstart – in the business world. Its IPO raised over $230 million just two years ago. The songwriters, who would suffer the most, are simply small entrepreneurs. The ultimate small businesses. If their songs don’t sell – they don’t eat.

Recall that mechanical royalties are currently set at 9.1 cents, yet from 1909 through 1976 the rate remained at the same 2 cents level. That’s right – the rate did not budget for over SIX decades. Is it any wonder that Pandora’s lobbying for paying reduced royalties would stick in the craw of any songwriter?

This is not just about Pandora, of course. Spotify would benefit from any adjustment in royalty rates as well. The founder of Spotify has gone on record, in a recent Wall Street Journal article, as envisioning Spotify being able to customize your playlists based on your location(such as when your smart phone detects you are at your gym or in your home). He also spoke of other ways Spotify could deliver music to you – at a cost. Nowhere in the article are artists even mentioned. It’s as if all this music came fully formed and it is the delivery system that is the true reason for music. At least Pandora’s Wintergren pays lip service to the artists who make the music (if not the folks who initially create the music).

Spotify does appear to have a different business model than Pandora, focusing on more 3rd party apps that allow the consumer to have an enhanced listening experience. While many of these apps are currently free, it does not take a leap of imagination to envision a time where some charge is attached. That is another reason why Pandora’s lobbying for a change in what they pay for the use of songs is so frightening to songwriters – it would impact all such streaming services. Companies such as Spotify, who are aggressively developing a business model unlike Pandora, would reap what amounts to a windfall profit.

Despite Pandora’s protestations of the current drag on their profits due to the way their royalties are calculated, they are projecting to a breakeven point for Q2 2013. This simply underscores the point that they need to change their business model. The current subscriber base, as reported by Pandora ( http://investor.pandora.com/phoenix.zhtml?c=227956&p=irol-newsArticle_print&ID=1823913&highlight= ) is 2.5 million. The cost is $36/year. Is that modest annual cost the absolute upper limit that Pandora can charge? Fundamentally that is the question.

Ultimately it comes down to fairness. Do you support the delivery system or do you support the creators of the very music that is the reason for Pandora, Spotify and other such streaming services. Do you support David… or Goliath?

Spotify is a great new piece of software and is now becoming a strong alternative to buying songs from iTunes or other similar services. This no buffer, quick and easily accessible program is sure to fill the boots of any enthusiastic musician or music lover.

The application lets you stream music directly from its central sever, as well as simultaneously connecting to other users who have listened to the song you selected. This method of linking Spotify users together and not just relying on one incoming connection means that you can start playing the chosen song instantly. There are literally millions of songs to choose from; many different languages and genres also available.

Although Spotify is free on invitation, this is where an existing member can invite you to join the service, or you can apply for an invitation by joining a queue, you can pay a premium for the service, this is currently set at around £10 a month and means that you will not receive advertising every few songs, which is the price that has to be paid for users that have not paid for this service. A premium subscription is not required, but frequent users may find that the adverts become very annoying over longer periods of timer listening to the music. I have found myself that the adverts Spotify are now using have become longer and more frequent than before and are even more in your face.

Although this is a great service that is being provided and many millions of people have the application now, there is one other downside to the program, apart from the odd advert. Spotify, when it send you the data over its servers, saves it in a folder on your computer, basically the Spotify cache. This is so that when you use Spotify, you can send song information to other users, this is what makes the streaming service so fast (as opposed to listening to the song through YouTube or other well know sites). But what Spotify does not let on is that the storage for this file is surprisingly large. The preset Spotify uses is 10% of free disk space. On an average computer this can be as much as 30GB. You can just go into the Spotify cache folder and delete the information though (not recommended unless space on your computer is needed for other files) but this does mean that when you come to listen to the same song again, which you probably will, as you liked the song you were listening to, you will have to retrieve the song information again, and won’t be able to help other users out by sending them song data to allow them to listen to the song faster.

Putting these little negatives to the side though, and this is one amazing application. It is sure to change the way we listen to music, if not already doing so, with its clean and easy navigable interface, instant song retrieval and wide range of music genres available, from the top 40 to unheard of songs in the credits of movies no-one has seen. A truly incredible application, and relevant and useful to all computer users out there today.

Not a Signed Artist? No Problem

There are hundreds of independent artists and we all need to focus on one thing: gaining new fans! Yes, even more than money, we need people to hear us and tell their friends about the mind-blowing new band they discovered. Getting our music put on Spotify is a critical step in this process.

Unless you’ve been living on Cloud 9, you’ve heard of Spotify and its “freemium” service. You’ve also heard how Spotify has taken the social network by storm. Every time one of my friends listens to a song, it pops up on my Spotify, Facebook, Twitter, and whatever other social accounts I have; ex: “Hey! Nicklas just joined Spotify and listened to Weasel… ” You get the idea.

So even though the amount of money you make per stream (per play) is less than a penny, the exposure potential is well worth it. And fortunately for indie artists like yourself, it’s pretty easy to get your music onto Spotify.

At this time, you may be signed to a label. If so, your music might be on Spotify already. If it isn’t, call your rep and ask if they’ve uploaded your music to the service. If they haven’t and you want them too, give the order! (in a nice way). Also, make sure they send Spotify your press kit loaded with a bio, photos, contact info and anything else that makes you stand out. Simple enough, right?!

If you are an unsigned artist, that’s okay because there are tons of ways to upload your music without a label. However, Spotify cannot negotiate with you directly. Why not? I’m sure it’s one of the stipulations of their agreement with the majors. But the solution is still fairly simple. You need to choose a distributor like Tunecore, CDBaby or DittoMusic. I’ve written a review of these distributors so you can save some time and keep rehearsing.

Once you’ve created an account with a distributor or signed a label agreement, your music will be uploaded onto Spotify within 4-6 weeks. But there is still work to be done, which leads us to:

—————————->Promote your music!<-----------------------------------

Spotify doesn’t always receive your awesome press kit, so just as a backup, create a profile at allmusic.com. Spotify will check for you there if they don’t receive a bio.

Now that all the tedious stuff is done with, it’s time to let your fans know Spotify will be sporting your tunes soon! Come up with cool promo posts on Facebook, Twitter and MySpace. Make a promo video for your YouTube channel. Just had a sweet idea: write a song just for your Spotify release and connect it to your posts! Ex: “Can’t wait to see our fans on Spotify. We’ve recorded a song just for you guys! Coming to your Spotify account soon!” Fans will eat it up!

Okay, there are a couple of tedious things to accomplish still. No site is complete anymore without clickable logos. Once your music is on Spotify, download the service’s logo at iconfinder.com. Next, search for your band profile on Spotify (several options will come up, including “Top Hit, Tracks, Playlists”… you want to select the link under “Artist”). While hovering over your artist profile, right click and select “Copy Spotify URI.” Last, combine the URI with the Spotify logo by adding it to your website or blog sidewall by creating an “Image Widget.”

Another hip promo you can use for Spotify is the “Spotify Play Button.” This feature allows you to post songs onto your website and blog. First, right click any song, album or playlist in Spotify you wish to promote and once again select “Copy Spotify URI.”

As an example, let’s post this URI to your blog. Open up your blog, write something to your hungry fans in html mode: (“We know you guys want a sneak peak of our upcoming album. Here’s the first track for you! Share it with your friends!”). Next, post the link and add a salutation.

Spotify is an innovative, new, music interface that allows users to search and listen to music for free. Featuring never-before options like sharing play-lists with friends, listening to music with it on your mobile phone, and syncing effortlessly to social networks like Facebook, it’s an easy way to incorporate music into your every day life.

If you haven’t already joined, go to Spotify’s website to sign up with a username and password. After downloading the Spotify client on your computer, the fun begins!

Get Listening

Using the toolbar, search for any artist or song you feel like listening to. It will bring up covers, the originals, and every one who has played that song in the Spotify database. When you find one you like, simply star it! It will be easily accessible next time you want to hear it.

Connect With Friends

If you are like every other social-network user, connect Spotify with your Facebook. By doing so, you can choose which songs to share with your friends, see who else is on Spotify, and make collaborative play-lists.

Do this by hitting the “Import friends” button in the right upper corner of the Spotify application. Log into your Facebook and follow the directions – before you know it, all of your friends appear on the right hand side of your Spotify applications… from there you can view their favorites, their play-lists, etc.

Start Sharing

Once you are connected with your friends on Spotify, create play-lists they can subscribe to. Every time a new song is added, they are notified and can listen to what you are currently listening to!

Another great way to share over 15 million songs with your buddies is to use Facebook. By simply clicking the “Share on Facebook” in the left-hand corner of the song you are listening to, it will show up instantly on your feed. Adding a soundtrack to your Facebook for your friends and family has never been easier!

Choose a Membership That is Right For You

Spotify has really reasonable rates for unlimited music listening. From $4.99, you can listen to music streaming instantly on your computer or phone, with no advertisements. If the ads don’t bother you, stick to the free account! If you run out of music time, consider switching to a premium account to keep listening.

Add a soundtrack to your life, wherever you are. Whether on-the-go with your mobile phone, or on the computer, the 15 million tracks and counting are sure to leave you satisfied.

One of the most important questions for musicians is how should they release their music? This is especially true in the digital age of the internet. While there are online music stores where you can actually sell your music either in physical or digital format to your fans, music streaming sites are now gaining considerable popularity, as well.

Artists can get their music submitted to online music streaming services like Spotify so that when people search for them they can find it for instant streaming. The artist actually gets paid for every stream which they receive through services like Last.FM or Spotify. The actual amount is so minuscule that it’s negligible, however, and the real value in getting your music on streaming sites is for increased exposure.

In this article, we’ll look at an up and coming streaming service which has long been available and popular in Europe but which has only become available in America in recent months, Spotify.

The benefits of Spotify for an artist are aplenty. It’s a HUGE up and coming streaming site which more and more people are likely to begin using as time goes by and it gains more exposure and notoriety considering how much music can be found and streamed for free through it. This is one source of exposure which you cannot afford to pass up given how many people are already using it and who will use it.

The actual cut which you get per stream as I mentioned earlier is very negligible. You earn less than a tenth of a cent per play, and you’d need millions and millions of streams of your songs before you started to see income in the hundreds or thousands of dollars unfortunately.

Unless you’re signed to a major label where you’ve got people working to get your music on streaming sites like Spotify for you, you’ll have to do it yourself. Fortunately it’s relatively inexpensive to do so as you can use a service like Tunecore which I recommend to get your album uploaded to Spotify and every other noteworthy streaming site for a price of just $49.99. This gets your album on online streaming sites like Spotify but at the same time it gets it in actual digital music stores for purchase like iTunes.

Again, it’s all about exposure as well as making your music as readily available to your fans as possible wherever they are and through whatever music services they feel comfortable using and frequent, and Tunecore does this for you with a few clicks of your mouse.

Remember that the absolute best place right now which an independent artist can sell their music is through a free service called BandCamp in which you can earn 85-90% (minus the Paypal transaction fees) of every penny which you earn from sales of your music with BandCamp themselves only taking an industry leading 10-15% for themselves for the transaction in full.

Over the past decade we have seen music streaming services in the industry rise tremendously. The idea of music streaming services is to bring you millions of songs, of all genres, for whatever situation you land yourself in. Streaming services have forced big players like iTunes to follow in their path or unfortunately get left behind. Streaming websites argue they are contributing positively to the industry with the underlying fact that music seems to be growing again. But like anything else in this world where there is ups, unfortunately, there must be downs and for streaming websites this has certainly been the case, especially over the last couple of year.

Music streaming sites in general all operate in similar ways. The majority allows consumers to use their service for free, with the downside of having to listen to advertising in between songs, but also have a paid version of the service, where you pay a set price per month or year, and draw in little to no interruption. Streaming services, in short, have banks of music from a wide range of artists and genres where customers are usually allowed to customize their own profiles with any music they choose, create playlists of their own and use the services radio setting where they curate songs for you. Before music streaming services started booming, paying a set price for a single song on iTunes and uploading it on your device seemed to be the most traveled path. In today’s age it is clear that streaming services are taking over, from movies to music, streaming seems to be the most efficient way of operating. There are many streaming services to choose from in our day and age, such as, Pandora, Google Music, Amazon Prime Music, Apple Music, etc. But I want to focus on the player that has impacted the industry the most, or so it seems, Spotify.

Spotify, founded by Daniel Ek and Martin Lorentzon, launched in 2008 in hopes of changing the way we listen to music forever. Along with most streaming services, Spotify allows you to search any artist, track, album, genre or playlist to find exactly what you’re looking for. Spotify also allows you to “follow” your friends and artists in the industry to see what they’re listening to. Spotify partnered up with Facebook where users with Spotify accounts could choose an option where the recent songs they listened to would pop up on their Facebook profile. In my opinion this was Spotify’s best decision as far as growing their service. Today, Spotify has 1,500 employees, 75+ millions users, music available in 50+ languages and is available in an application form on almost every platform.

Just like reading gives book lovers the mental peace and satisfaction, music enthusiasts find their mind peace in music. Hence, if you think music is your escape and ready to discover a ‘music world’ that can go anywhere with you, installing a music streaming app on your phone is the best thing to do. Mobile technology is emerging in such an exponential way that getting your favourite pieces of music and playing it anywhere at anytime is no more a complicated thing. Here is a list of a few popular free mobile applications that every music enthusiast would love to have on their mobile phones.

#1 Spotify

This music application is pretty much popular among the music lovers worldwide. This brilliant app not only lets you follow your favourite artists but using it, you can easily sync any music from the desktop. More interestingly, it would help you to create the radio station where Spotify would play only recommended music of your interests. Searching for new releases, top lists, albums, discography of your favourite artist becomes very easy using Spotify. If you are following any particular artist on this app, when that artist releases something new, Spotify would send you a push notification. iOS, Windows, Android – this app works perfectly on every operating system.

#2 Google Play Music

If you are looking for such a platform where you can listen to your personal music library without any kind of interruption of ads, this Google Play Music app is the best choice for you. This app allows you to upload almost fifty thousand songs on the Google account so that you can instantly access all the songs when you want. Creating custom playlists, playing tracks in the shuffle mode without any kind of limitations are some of the major benefits of using this brilliant music app. To discover as well as to save fresh music or to explore a wide genre of music, you can easily subscribe to this app in the exchange for a monthly fee. Probably the most interesting part of this app is that it not only works on iOS and Android devices but can work in the browser as well.

#3 Pandora

Explore the vast world of music similar to your interests using this incredible music streaming app. If you enter the name of your favourite artist here on this app, other than the songs of that particular artist, Pandora would recommend a huge list of other similar artists as well. If you like any particular song, you can rate it. Bookmarking your favourite artists is also easy using this application. This app gives the best performance when connected to a Wi-Fi. They have a website as well if you want to listen to music from your desktop. The app is available for all major platforms like iOS, Android, Windows etc.

Apart from all these immensely popular music streaming applications, plenty of other options are also available in the market. Shazam, iHeartRadio, TuneIn Radio, Amazon Music etc. are some of the popular apps that are trending on the market today.

I admit it… I’m one of those people who sings a little too loudly (and a little off-key) when I have my headphones in. Especially if Journey’s “Don’t Stop Believin'” comes on.

I can’t help it, music moves me… to the chagrin of anyone within listening range.

In fact, most of my iPhone’s memory is devoted to my playlists. Before upgrading my storage recently, I actually had to delete photos in order to keep all that music ready to blast at the touch of my finger.

Now, I have plenty of room… but there’s a problem.

I’ve been known to shell out upward of $20 a month to buy songs from Apple. I know, that’s completely unnecessary with today’s streaming technology. But I was stuck in my ways.

So recently, I “unstuck myself”… and I joined the popular Swedish-born direct-listening service, Spotify. And I’m never turning back.

So when Spotify – valued at about $20 billion – announced going public with a stock offering in March/April in a unique way, I perked up. I started combing through the headlines, and already analysts are calling this the largest tech initial public offering (IPO) of 2018. The anticipation is huge!

But, alas, I’m a cynic at heart. Despite my excitement, I had to ask myself… is the hype for Spotify stock really worth it? So today, let’s take a detailed look at this IPO to find out.

Talkin’ Bout a Music Revolution

In my mind, Spotify is part of the single most important innovation in music since perhaps Kurt Cobain discovered ear-splitting feedback and raw, queasy lyrics about teen angst.

The concept is simple: You stream music on the internet. For free. Or, at most, a small $9.99 monthly fee. You just need the Spotify app to access it all.

When Spotify launched in October 2008, this was a disruptive, revolutionary idea. That’s why the company helped pioneer the music streaming market, paving the way for services such as Apple Music (Apple’s streaming service, which went live much later in 2015).

Spotify is an endless, user-friendly treasure chest.

You listen to whatever you want, wherever you want, whenever you want. The app is compatible with practically every device I can think of, from computers to smartphones to tablets.

And if all that music sounds overwhelming, don’t worry – you can also use its unique music-discovery feature to find songs that fit your music tastes.

The entire platform is a grand idea.

Unfortunately, investors like us couldn’t take part in this revolutionary service because the company was privately held for the past decade. So now that we can soon take part in the stock, we need to make sure it’s worth the investment.

The Times, They Are A-Changin’ for a $1.8 Trillion Industry

The first thing to note is that, according to PwC, the global entertainment industry is expected to rise from $1.8 trillion in 2016 to $2.2 trillion by 2021. That’s nice, but it represents a compound annual growth rate of 4.2% – down from the 4.4% forecast made in 2016.

That means the old-school entertainment industry is starting to plateau. To fix that, the industry needs to focus on building sustainable relationships with customers.

After all, consumers are king. When it comes to recordings – film, television, music – we get to dictate what we want to see, hear and experience. We vote with our time, our attention and a small subscription fee (think Netflix, Amazon Video and Hulu).

Just as industries and products like health care, cars, refrigerators, thermostats and so on were in need of a revolution – see precision medicine and the Internet of Things – so was entertainment.

And that revolution is here. Spotify is just one of the big players.

That’s why Spotify has about 140 million active listeners, and 70 million of those are paying premium fees for advanced features. Better yet, the service boasts 30 million songs and adds over 20,000 per day.

It also features over 2 billion playlists, generated by the company’s growing user base (a great idea that engages the customer much more directly), and 5 million more playlists get created or edited daily.

This is obviously an enormous reach. However, there’s one problem…

The Problem: Money, Money, Money

Despite all of this, Spotify hasn’t found a way to be profitable.

Yes, sales jumped 52% to $3.09 billion in 2016. But the net loss more than doubled, coming in at $568 million. (Although the net-adjusted loss is more like $310 million.)

For example, roughly $2.62 billion of that revenue evaporated with the cost of goods sold. Another $440 million disappeared to sales and marketing expenses, etc.

At least earnings before interest, taxes, depreciation and amortization came in at negative $169.2 million in 2016, versus the $180 million loss the prior year, Billboard calculated.

But we need to see the company generating positive income.

Spotify isn’t. So the numbers made me raise an eyebrow. With that in mind, I turned to Paul Mampilly to get his thoughts on Spotify’s public listing.

Paul Mampilly Talks Spotify Stock

Paul is our go-to guy for all things disruptive tech, so I knew he had to have some interesting thoughts on this. Here’s what he told me:

Spotify’s public listing is interesting from two angles: First, it’s a nontraditional IPO because it cut Wall Street out of price setting. Instead of making shares available to the general public, Spotify will list itself directly on the stock exchange. That means only institutional investors have access – eliminating the need for banks to set an initial price, link sellers and buyers, etc. This is something that makes the initial trading a wild card because Wall Street’s participation offers price stabilization for IPOs.

Second, Spotify is still losing money, though it has a huge subscriber base. However, it’s also a subscription business, which means repeating revenue – and that’s a great model. Plus, like Netflix, it’s a global business, so it can continue growing.

So, the biggest worry for Spotify is this: Are enough people going to buy the IPO for you to want to be in it from Day 1? Because most times you get a chance to buy it lower. That’s because most people play IPOs for a quick pop in the first day or week, and then dump it.

I say that people who want to buy the stock as an investment should bide their time, wait to see how the stock trades – and see how Spotify’s business performs over a few quarters. Then you can build your position over time, if things look good.

All in all, Spotify is an amazing product with a great model. That may ultimately lead to profitability down the road. But this is a “wait and see” one. Don’t get caught up in all the hype just yet!

This article is focused on Spotify. Now you’re probably wondering. What the hell does Spotify have to do with data? Realistically, not that much, but I wanted to take the time to in depth highlight some of the great things Spotify is doing in the data world, and heck even some things that are completely off the data beaten road.

Discover Weekly

(4.5/5)

Discover Weekly is a new feature Spotify fully released over the summer. Every Monday, the playlist updates and gives you 30 songs you might have never heard of. It takes data that they’ve stored on you, and come up with songs that they believe you might like. Sounds great right? Yes. It is great, but after having used this feature for a couple months now there are a few flaws in their system.

Negatives

1. Discover Weekly seems to pull based off of your all time plays. So if you decide you want to listen to a genre you don’t often listen to for an entire week, that won’t be reflected in your Discover Weekly. This isn’t necessarily a plus or a minus. For me, I’d rather get music suggestions based on the music I’ve listened to most recently.

2. There is a supreme lack of visibility in their process. Understandably they don’t want someone else to copy how this works. I would be really curious in reverse engineering their algorithm, but that would involve keeping track of everything I listen to throughout a week (impossible), and I’d have to suddenly become a software engineer(which I’m not), plus Spotify will never release how promotional activity affects this playlist.

3. The refresh time of the playlist seems to be really arbitrary, and I’m not sure what causes it. I’ve had my playlist refresh at 2 in the morning on Monday, and I’ve had it refresh at 10pm on Monday. The inconsistency is rather annoying for those of us who are super habitual beings. UPDATE: I’ve now noticed that it seems to refresh whenever you restart the client. It would be nice if they had a push setting to alert the user they need to restart the client to retrieve it.

4. Sometimes stuff shows up that you just don’t like, and it’s almost infuriating when it does. There’s no way to really fix this on their end, but it would be nice if I was somehow given the ability to opt out on certain bands. For instance, I had Upon a Burning Body show up on my playlist, which I’ve listened to them in the past. Well, I had a major fall out with that band after some stunts they pulled on their new album. I lost all respect for the band and want nothing to do with listening to them.

5. Sometimes songs show up that are already on one of your playlists. In the 10 weeks I’ve been using this playlist, I’ve only had this happen once. But it’s still disappointing.

Those are the negatives, but let’s talk more about the positives, and why this provides a great listening experience for someone like me, the user.

Positives

1. Rediscovering music you forgot existed. Yea, I listen to a lot of music. I’ve been known to blast a song nonstop for a couple days, then never listen to it again because I forgot to attach it to a playlist, or I have trouble finding the appropriate playlist to put it on. Almost every week I rediscover one of those songs, and it’s exciting to rehear something you love.

2. Hearing other songs from an artist you originally thought you only liked a couple songs to. This is one of my favorite things about the playlist by far. Sometimes I’ll hear a song by a band, just to listen to 5 other songs and completely hate them so I give up on the band. Then that band shows up in my DW, I grumble, and the song ends up being amazing.

3. Discovering a band you don’t listen to that much or follow well dropped a new album, AND it’s amazing. It’s kind of embarrassing discovering a band you really like put out a new album 3 months ago and you didn’t know about it. But Spotify is to the rescue!

Spotify Radio (1/5)

Spotify’s radio offering is not good. Plain and simple. Pandora is in my opinion an antiquated service, but they have mastered the art of radio much better than Spotify. If there is anything Spotify could afford to fix more than anything else, it’s their radio. It is rather annoying to make a playlist that’s about 50 songs long, wanting to improve upon it, starting a playlist radio, and hearing a bunch of songs that not only don’t belong in that playlist, but when you spam the next song button get a repeat of songs.

Spotify radio has been awful for a long time. I want to believe it’s because the radio pulls from promoted bands more so than bands that actually play along with the other musicians that it is relationally pulling from. If that’s the case, then it’s disappointing, but I understand Spotify needs to raise revenues.

Spotify Premium (5/5)

Spotify Premium is obviously not free, but the extras you receive from spending $10/month (5 if you’re a student) outweigh listening to advertisements, and not being able to take your music with you on the go. Spotify premium has essentially turned my phone into my full time listening device on the go, I replaced my iPod, and haven’t looked back. If we did a cost analysis, we’d see that $120 a year, versus the $200 one time cost of owning an iPod works out pretty well. Not only do I have one less device to remember when I travel (oh, how disappointing it is to forget your iPod on a trip), but I also don’t have to go to the hassle of downloading and buying music and managing a file structure on my computer’s hard drive.

If you don’t pay for Spotify Premium, do you really even use Spotify?