Venture Desktop’s Post

“Clampetition” — Spotify Edition

We have seen a number of “clampetitive” moves (actions that are both classy and done with a competitive aim in mind) lately in markets that have been profoundly impacted by the pandemic.

One example is GrubHub announcing it is temporarily suspended collection of up to $100 million in commission payments from impacted independent restaurants nationwide.

Another came today from Spotify (with an assist from Square’s Cash App).

From Spotify:

We also felt we could uniquely help by providing the global reach of Spotify to artists who are fundraising during this challenging time — to help them get the word out to fans, many of whom visit them on Spotify every day. And we’ve been really inspired by fans that want to help the artists they love and have been making direct donations.

That’s why, today, Spotify for Artists is launching a new feature: the Artist Fundraising Pick. Just like artists can select any piece of music to highlight on their profile as an Artist’s Pick, they can now highlight a fundraising destination (in addition to their Artist’s Pick).

One challenge Spotify has always faced has been their competitive position stuck in between the labels and the big tech platforms. Features too focused on establishing secondary monetization channels (think social ) or additional tooling for artists could draw the wrath of the labels who still, in many ways, hold the keys. The working theory is that seeing the catalogs of a few key artists pulled from the platform wouldn’t be fatal…but Spotify would probably rather not find out.

The pandemic situation, and massive challenges artists face, has left some space for Spotify to act quickly and build a feature that both helps those artists while also strengthening their position with the labels. The direct connection “marketplace” they’ve established between artists and their fans cuts out the labels (to a degree, more below) and shifts the influence in Spotify’s favor. I wouldn’t be surprised to see a newly emboldened Spotify roll out something to help artists host live shows or connect for Q&A type interactions soon as well.

I caveated the above with “to a degree” because under current royalty agreements, record companies get a share of all Spotify revenue. I’m not sure how the current negotiations have progressed/ended up…

But long term, you have to think moves like this that Spotify can make without backlash (would be terrible PR for the labels to push against this) will be very beneficial in helping them get out from under the control of the labels and find a way to expand profitability.

In case it is interesting, I wrote about “Spotify’s Ladder” here.

____

#media / #commerce

Disclosure, I’m long both Spotify and Square ____ "Clampetition" — Spotify Edition

We have seen a number of "clampetitive" moves (actions that are both classy and done with a competitive aim in mind) lately in markets that have been profoundly impacted by the pandemic.

One example is GrubHub announcing it is temporarily suspended collection of up to $100 million in commission payments from impacted independent restaurants nationwide.

Another came today from Spotify (with an assist from Square's Cash App).

From Spotify:

We also felt we could uniquely help by providing the global reach of Spotify to artists who are fundraising during this challenging time — to help them get the word out to fans, many of whom visit them on Spotify every day. And we've been really inspired by fans that want to help the artists they love and have been making direct donations.

That’s why, today, Spotify for Artists is launching a new feature: the Artist Fundraising Pick. Just like artists can select any piece of music to highlight on their profile as an Artist’s Pick, they can now highlight a fundraising destination (in addition to their Artist’s Pick).

One challenge Spotify has always faced has been their competitive position stuck in between the labels and the big tech platforms. Features too focused on establishing secondary monetization channels (think social ) or additional tooling for artists could draw the wrath of the labels who still, in many ways, hold the keys. The working theory is that seeing the catalogs of a few key artists pulled from the platform wouldn't be fatal…but Spotify would probably rather not find out.

The pandemic situation, and massive challenges artists face, has left some space for Spotify to act quickly and build a feature that both helps those artists while also strengthening their position with the labels. The direct connection "marketplace" they've established between artists and their fans cuts out the labels (to a degree, more below) and shifts the influence in Spotify's favor. I wouldn't be surprised to see a newly emboldened Spotify roll out something to help artists host live shows or connect for Q&A type interactions soon as well.

I caveated the above with "to a degree" because under current royalty agreements, record companies get a share of all Spotify revenue. I'm not sure how the current negotiations have progressed/ended up…

But long term, you have to think moves like this that Spotify can make without backlash (would be terrible PR for the labels to push against this) will be very beneficial in helping them get out from under the control of the labels and find a way to expand profitability.

In case it is interesting, I wrote about "Spotify's Ladder" here.

____

#media / #commerce

Disclosure, I'm long both Spotify and Square
By: via Venture Desktop