Spotify goes public with a bang after flag snafu to mark first day of trading

NYSE hoisted the Swiss , not the Swedish, flag outside its historic build to celebrate the deal

Spotify, the Swedish music streaming service, went public with a bang on Tuesday as the nine-year-old company sold shares on the New York stock exchange that initially valued the loss-making company at $29.5 bn.

The initial public offering( IPO) of the world’s largest music streaming company is one of the most heatedly anticipated in years and goes as other similarly loss-making tech titans are also shopping for exchanges to host their share sales.

Trading was delayed as investors struggled to find a price for Spotify, which opted the unusual road of selling existing shares directly rather than the usual IPO route. The decision resulted the company to predict Spotify’s shares could prove a volatile investment as buyers try to determine the company’s true worth.

The price fell $17 over the day ending at $149.01 a share, a sharp fall but still enough to ensure Spotify was one of the largest tech IPOs in history and valuing the company at $25 bn.

The IPO goes at a distressed moment for tech companies. Despite astronomical valuations ahead of their share marketings the recent IPOs of Snap Inc, owner of Snapchat, and Blue Apron, a meal-kit delivery service, failed to live up to their hype. Meanwhile the shares of some of tech’s biggest names , notably Facebook and Amazon, have tumbled amid fears that greater government scrutiny and the rules of procedure will dent their profits.

The Spotify sale get off to a bum note after the New york stock exchange hoisted the Swiss , not the Swedish, flag outside its historic house to celebrate the deal.

One of the first people to spot the mistake was Sven Carlsson, a Swedish tech reporter who encompasses Spotify for Di Digital.” Extremt mycket lol pa Wall Street nar NYSE hissar en schweizisk flagga ,” he wrote on Twitter. For non-Swedish speakers that’s:” An extreme quantity of’ lol’ at Wall Street when the NYSE raises the Swiss flag .”

Sven Carlsson (@ svenaxel_)

Extremt mycket lol pa Wall Street nar NYSE hissar en schweizisk flagga. $ SPOT #sthlmtech snA6P 1i7OX

April 3, 2018

The error was corrected 15 minutes later with the NYSE creating the right flag.

The snafu marked the first day of trading in a highly unusual share marketing. Spotify chose to shun the usual IPO roadshow and sell its shares immediately to the market.

While this method saved the company millions in banking fees, it is also a risky move as a traditional IPO guaranties purchasers and decides a price for the sale in advance.

Analysts expected the company to be valued at around $23 bn but have warned that its direct listing could lead to volatile sways in its value as the market decides its future prospects.

Spotify is expected to reach 170 million listeners this year, up from the present 157 million, with paying subscribers slated to increase from 72 million to 90 million. It accounts for 40% of the global market for music sharing.

The company is growing revenues fast too- analysts predict its sales topped EUR4. 9bn ($ 6bn) last year, up from EUR7 46 m ($ 915 m) in 2013.

But it is expected to report a loss of EUR3 30 m ($ 408 m) for the 2017 financial year and faces stiff rivalry from Apple, Google, Pandora and others.

Paul Verna, eMarketer principal analyst, was bullish on the company’s prospects.” Spotify has been the driving force in nothing less than a turnaround in the US recorded music industry. Last year the industry made its highest revenue mark in a decade, and it was led by streaming, largely subscription-based ,” he said.

” This is a huge vindication of Spotify’s on-demand model, which has proven more popular than paid downloads. Apple’s original model, curated streaming, the Pandora model, and even streaming of live radio stations( the iHeart Music model ).”

Fortunately Spotify’s execs were not present for the flag flap. Its executives declined to participate in another of the usual rites of an IPO, ringing the opening buzzer.

At Spotify’s investor day in March, Spotify’s chief executive, Daniel Ek, said:” For us, going public has never been about the pomp or the circumstance of it all .”

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Spotify’s stock market debut: all you need to know

Music streaming firm has 157 m customers and could be valued at $25 bn in its New York IPO

Spotify is poised to make its stock exchange debut on Tuesday, in a flotation on the New york stock exchange that could value the company at $20 bn- $25 bn( PS14. 2bn to PS17. 8bn) according to analysts.

The music streaming business was launched 12 years ago as a free-to-use service, shall be financed by advertising. Spotify now has 157 million clients, and has managed to convert 71 million of those into paying users of its premium subscription service.

However, Spotify has never made a profit, making it more tricky for potential investors to value the firm. It also counts the likes of Apple and Amazon as challengers, a daunting prospect given the depth of their pockets.

Here are some of the key questions as the Swedish firm prepares to go public.

What is different about this flotation ?

Unlike most companies that float, Spotify is not issuing any new stock, which means it has not set a price for the market share in advance. Instead it is selling shares currently held by its private investors, rather than handling it in the usual way with the process managed by investment bankers. It will save the Swedish company fund but it is likely to create volatility when the shares go live on Wall street( 14:30 BST) as investors try to settle on a price. The company has constructed losses of virtually EUR1bn( PS870m) over the past three years, so investors will not be able to rely on a traditional price earnings ratio as a guide.
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Why does Spotify want to float ?

Spotify made a commitment to its original investors that they would have the opportunity to cash in their investment, and this is it. The flotation will help to fund expansion of the business, but it will also ramp up pressure on the management. By going public, Spotify’s strategy and performance will come under increased scrutiny, and investors will expect progression, fast.

What is it worth ?

Analysts are predicting Spotify could be valued at $20 bn- $25 bn on its debut on the New york stock exchange but the reality is no one knows. It is more difficult to predict than usual, because no advance cost for the shares has been set. Investors will be weighing up possibilities for growth against the fact Spotify has failed to turn a profit in its 12 -year existence. The company’s costs- including the royalties it pays to record labels and artists- are greater than its revenues, although that gap is constricting. A successful float will depend on whether or not investors believe Spotify’s claim that it can become profitable and fend off bigger challengers such as Apple and Amazon.

What are Spotify’s strengths ?

Spotify has proved be permitted to drive strong revenue growth, with revenues rising from EUR7 46 m in 2013 to a predicted range of between EUR4. 9bn and EUR5. 3bn last year. With an estimated 40% share of the global music streaming marketplace, Spotify is the dominant player in key sectors, increasing its bargaining power with labels and artists over the royalties it pays them. Meanwhile user numbers are expected to increase to 170 million this year, with paying subscribers expected to rise from 71 million to 90 million. One of current challenges will be persuading more non-paying customers to sign up for paid-for services.

What are the threats ?

Simply put, it’s possibilities for competitor. Spotify is currently the market leader but tech giants such as Apple and Amazon have deep pocket and could cause some injury should they decide to mount a key challenge. Both companies already offer hardware such as the iPhone and Amazon Echo which are available with their own, pre-loaded music-streaming services. Spotify’s restriction supplier base, with only four music companies controlling the rights to 87% of the music streamed on Spotify, is another hazard, according to analysts at Hargreaves Lansdown.

What will it mean for customers ?

The flotation will mark a new era for Spotify but it is not yet clear what changes the firm has schemed. Analysts say it are gonna have to diversify over day, to ensure that it stands apart from rival streaming services. One alternative would to be create more original content, in accordance with the video shot for Spotify by Taylor Swift for her single Delicate. Spotify has already moved into podcasts and rendering original music.

How have other recent tech floats performed ?

Recent technology floats have proved volatile and investors have been selling off shares in the wider sector, concerned by the prospect of greater regulation for tech firms such as Facebook. Cloud storage company Dropbox is up 40% since it floated last month, but shares in Snap- the company behind social media app Snapchat- are down 15% compared with their float price.

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Heres what Spotify shares will be worth when they start trading

Spotify has finally filed to go public. But unlike most tech offerings, Spotify won’t be raising any fund by issuing new shares. Instead they’ll only permit existing shares owned by investors and employees to be traded publicly on the New York Stock Exchange.

No IPO means there are no investment banks to underwrite and cost the offering, meaning the public marketplaces will basically be the only thing ascertaining what Spotify shares will be worth when they start trading.

However, Spotify’s F-1 enrollment does disclose what its shares have historically traded for on the private marketplace. The most recent private transactions should give us a pretty good clue of what shares will be worth when they start being publicly traded.

As you can see in the chart below, in 2017 Spotify shares were bought and sold privately for anywhere between $125.00 and $37.50, which is a pretty wide range. But in the last two months the value has become a little more defined, with shares trading anywhere between $132.50 and $90 in January and February 2018.

That means we can expect shares to trade somewhere in this scope when Spotify runs public, with the price likely leaning towards the higher end ($ 132.50) to account for the increased demand once they are available to a broader investor base.

Of course the more demand there is the higher the shares will trade, and since Spotify’s public offering has been much anticipated don’t be surprised if we see share prices closer( or upwards) of $150.

In its F-1 enrollment, Spotify notes that these share costs and amounts all reflect a 40 -to-one share split, which the company tells is being done to “reduce the per share price of our ordinary shares to a more customary level for a freshly listed company on the NYSE”.

Of course the above numbers are just historical pricing, and legally can’t be an indication of what Spotify actually supposes their shares will be worth. Spotify confirms this, saying “this information may, however, have little or no relation to broader market demand for our ordinary shares and thus the opening public cost and subsequent public price of our ordinary shares on the NYSE”.

Expect to see Spotify shares actually start trading on the NYSE in the next month or so, for the purposes of the ticker “SPOT”.

To read more of our coverage of Spotify’s public listing you can check out all associated posts here, or the main post here.

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Even with double the subscribers, Spotify says Apple will always have an edge owning the app store

Spotify just filed for a direct listing in the U.S ., sidestepping the traditional IPO process, and now we’re starting to see some of the true fiscal intestines of the company — and some of the significant risks it faces from challenging services from Apple and Google.

Apple, for example, charges apps a percentage of revenue for subscriptions processed through the App Store. Apple Music, meanwhile, will always deliver Apple 100 percentage of the subscription revenue that it receives from subscribers( sans record fees and all that kind of stuff, of course ). Apple, too, has a direct integration with its iOS devices and also a huge amount of brand recognition, even though Spotify is a massive service. Spotify says it has 159 million monthly active users and 71 million premium subscribers, while Apple has 36 million paying subscribers as of February 2018.

Here’s the full boilerplate from the filing 😛 TAGEND

Our current and future competitors may have higher brand recognition, more established relationships with music and other content licensors and mobile device manufacturers, greater fiscal, technological, and other resources, more sophisticated technologies, and/ or more experience in the markets in which we vie .

In addition, Apple and Google also own application store platforms and are charging in-application buy fees, which are not being levied on their own applications, thus creating a competitive advantage for themselves against us. As the market for on-demand music on the internet and mobile and connected devices increases, new challengers, business models, and solutions are likely to emerge .

As owners of the platforms themselves, Apple and Google will always be able to dictate the terms. And while Spotify is a massive service, its success still hinges on users listening on their mobile devices. It may be able to build a strong brand and create some inertia against potential changes from Apple that could instigate user backlash, but at the end of the day, Apple runs the system where its users actually get the service.

As Apple begins diversifying its revenue streams to create a services branch that the company likes to say will be the size of a Fortune 100 company, music is increasingly becoming a core part of that. Google, too, owns its app store platforms, and will recognize 100 percent of the revenue from its own service. We haven’t find the full potential of these companies’ approaches to the music space, including with regard to with Apple Music, which appears to be steadily growing, but Spotify is clearly distinguishing it as an existential threat.

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Spotify has filed to go public

Music streaming service Spotify is going public and it merely unveiled its filing .

The documents state that it is targeting a$ 1 billion IPO, but this is just a placeholder. The company actually plans to go public without the standard fundraising event. In other words, Spotify isn’t selling its shares on the stock market. Instead, the event known as a “direct listing” will be a series of transactions from existing stockholders( like employees and investors) selling shares to stock market investors. Spotify’s filing even acknowledges that this unusual process is “risky.”

Its public debut is likely to happen in late March or early April, but it is unclear how much shares will cost when it listings under “SPOT” on the New York Stock Exchange. Spotify says that for 2018 its shares have traded on the private markets for between $90 and $132.50, valuing the company at $23.4 billion at the upper part of the range. But that these transactions “may have little or no relation to the opening public price of our ordinary shares on the NYSE.”

Spotify says it is present in 61 country level its platform includes 159 million monthly active users and 71 million premium subscribers.

Spotify faces $1.6 billion lawsuit from music publisher alleging copyright infringement

Spotify is facing a $1.6 billion lawsuit from Wixen Music Publishing, the publisher that represents artists like Tom Petty, Missy Elliot, Stevie Nicks and Neil Young, The Hollywood Reporter first reported. The suit, filed December 29, alleges copyright infringement, specifically alleging Spotify is using thousands of its sungs without a proper license. The suit attempts at least $1.6 billion in damages and injunctive relief.

Before Spotify launched in the U.S ., the company made are dealing here with major record labels to obtain the appropriate rights to the sound recording copyrights in the ballads, the lawsuit countries. What Spotify failed to do, according to the lawsuit, was “obtain the equivalent rights for the compositions.”

The lawsuit goes on to say, “As a outcome, Spotify has built a billion dollar business on the backs of songwriters and publishers whose music Spotify is using, in many cases without obtaining and paying for the necessary licenses, ” the lawsuit alleges.

Wixen also alleges Spotify has “knowingly, intentionally, and repeatedly” reproduction those anthems over the internet to California residents.

This suit comes following a proposed $43 million settlement involving music rights holders and Spotify in a class-action lawsuit, Ferrick v. Spotify. That suit, Wixen alleges, “does not adequately compensate Wixen or the songwriters it represents.”

In that settlement, Spotify admitted to failing to obtain necessary statutory licenses to reproduce and/ or distribute musical compositions on its platform, the lawsuit says.

“Consequently, while Spotify has become a multibillion dollar company, songwriters and their publishers, such as Wixen, have not been able to somewhat and rightfully share in Spotify’s success, as Spotify has in many cases use their music without a license and without compensation, ” the lawsuit states.

I’ve reached out to Spotify and Wixen. I’ll update this story if I hear back. The example is Wixen Music Publishing, Inc. v Spotify USA.


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Spotify files to go public

Spotify has filed confidentially to go public, sources told Dan Primack at Axios.He became aware that the music streaming company filed with the SEC at the end of December.

The timing is consistent with what we are hearing. Sources told us that they’ve been targeting a debut for the first quarter of this year. We’ve gotten clues that it could happen within the next month or so.

But there’s also been chatter that it will not technically be an IPO, but rather a “direct listing.” Spotify has been investigating the possibility of setting up listing on the stock market without the fundraising event.

Many in the tech community have carried frustration with the traditional IPO process, and it looks like Spotify is looking to be a guinea pig and try out something different. Other companies have done direct listings, but it is an unusual scenario for a company of this size. Spotify was valued at $ 8.4 billion in 2015.

Spotify was lately dealt a $1.6 billion suit, alleging copyright infringement.

Spotify is a leader in the digital music space with more than 140 million active users and 60 million paying subscribers.But it’s a competitive scenery that also includes Apple Music and Pandora.

Pandora, which went public in 2011, has had a tough time on the stock market. It is currently trading at$ 5, less than one-third of its $16 IPO price.

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Spotify launches an app for artists with real-time streaming data, audience demographics

In the music streaming epoch, access to data is king. Artists want to know how their music is being detected, who’s listening, where, how many have streamed their release and what else their fans are into , among other things. Today, Spotify is releasing an app for artists that aims to answer these questions, while also devoting artists a route to update their profile and connect with listeners while on the go.

Essentially, this new “Spotify for Artists” app, as it’s called, is a mobile version of Spotify’s artist dashboard, which exited beta earlier this year. The key change is the convenience of mobile access — something Spotify product manager, Miles Lennon, says was a top demand.

“The first thing we’re trying to achieve is fulfilling the artists’ needs to have mobility, ” he says. “They don’t have desk jobs. While we have a desktop product, it’s not accessible to them.”

Like the web dashboard, the app lets artists update their profile on the service, including things like their bio, their artist’s picking and their playlists. These picks and playlists are one of the ways artists on Spotify engage fans — by telling them what favorite new sung they’re listening to, for example, or by featuring their favorite tracks.

The ability to upload new photos to the artist profile is not yet supported, but will be in a future release of the app, we’re told.

However, the key features in the Spotify for Artists app have to do with gaining native mobile access to streaming data, including real-time data on new releases.

As soon as a new release fells, the app will update instantly as the track get streamed. This will continue for the first week after a new single, EP or album is released, says Spotify.

This feature is exclusive to mobile and leverages Google’s Cloud infrastructure, explains Lennon. The one-week time frame was chosen partly because of the challenges of scaling such specific features, but also because it’s the most critical period to track. However, that time frame may expand in the future.

Data like this is crucial for artists, who today compete for fan attention and acclaim on number of streams , not album sales. And on Spotify, half of users detect music by way of playlists or the radio, the company has said before. So if a new release drops but isn’t picking up steam, artists will know this information immediately, then can act accordingly — getting their tracks on the right Spotify playlists, or get other artists to feature their music on their own profiles, for instance.

In addition, the app will provide access to listener demographics, including through like gender, age, location and even what they creek, how they listen and what else they like.

Again, this is data the Spotify for Artists dashboard on the web also contains, but the focus here is the convenience of mobile be included with the power of data. It’s a style to drill down into the fan base, to separate the casual streamers from the more dedicated fans and understand better where and how the music is being received.

“Artists are always looking to understand did this next record I put out bring me to a new level of fandom, or did this new audio change the audience makeup ?, ” says Lennon. “Has the gender makeup of my audience changed? Has their age changed? Or even, perhaps the countries or cities ?… this is something artists have told us is truly critical for them.”

These demographic details also can help artists when they’re promoting their music outside Spotify — such as on Facebook by way of social ads — or for planning tours.

Salt Cathedral – Stats Overview

Salt Cathedral – Song Details

Salt Cathedral – Profile

Salt Cathedral – Audience

Salt Cathedral – Artist_s Pick

Spotify launches an iMessage app for texting songs to friends

Spotify has softly launched its own iMessage application that let you text ballads to friends with just a few taps. The new app hasn’t been officially announced, but appears to be similar in functionality to Spotify’s Messenger app, which went live earlier this spring as one of Messenger’s new chats extensions.

As with the Messenger bot, the new iMessage app also lets you promptly search across Spotify’s full catalog for a way you want to share, then tap a button to paste a preview of that song into your chat session. This preview includes an album image, song title, and artist information.

But in the iMessage app’s instance, the image is much larger than on Messenger, and there’s no “play” button. Instead, a small Spotify logo at the top left is what indicates that what you’ve sent is a song.

The recipient then taps the image which launches a new window, overlaid on top of the chat session. From here they can play the provided 30 -second clip, or tap the “Play on Spotify” button below to hear the full way, if you’re a subscriber.( We also noticed that once it knows you’re a paying Spotify user, the option to stream a clip goes away and you’re only directed to the Spotify app to stream .)

Above: Spotify’s iMessage app begins indicating sungs as you type

The iMessage extension itself rolled out in Spotify’s latest iOS app update the coming week, and was then spotted by iGeneration, MacRumors, and others.

As reports have noted, a key discrepancies between Spotify’s iMessage app and Apple Music’s is that the latter allows you to listen to the full way right in iMessage. However, Apple’s is more limited because it only pulls up tracks that are in your’ lately listened’ list.

If you have Spotify’s iOS app already installed, you can switch on the new Spotify iMessage app from the iMessage App Store( unless you have your Sets configured to automatically enable all new iMessage apps by default, in which instance you can just start using the app ).

On iOS 11, that entails heading to the end of the horizontal row of iMessage apps that appear when you tap the App Store button next to the text entry box in iMessage, then tapping the “More” button. This launches a window where you can manage which apps are switched on.( Just tap the “Edit” button to display their toggle switches ).

Though the functionality on iMessage is limited to only sharing tracks- not observing hot or trending music or building group playlists, for example- that may actually has become a smart design selection on Spotify’s part.

One thing some iMessage apps have done wrong is require too many steps to use. When you’re in the middle of a back-and-forth dialogue, you don’t want to disappear from the chat for too long while you fiddle with apps. By simplifying the process to merely three steps- search, tap, and share- it’s a lot quicker to send a Spotify clip now, rather than hunting down the URL of the track instead.

Spotify’s Messenger app has also seemingly pared down since launch, we should note. Originally it also highlighted popular tracks and constructed various recommendations, but now it just lets you search, pulling from recent songs, or generate playlists.

Spotify confirmed the launching of the new iMessage app to TechCrunch in a statement.

“Spotify’s iMessage app is available now, allowing users to quickly search for and share music with friends directly from iMessage, ” a spokesperson said. “It’s the latest style in which we’re empowering users to share music with friends in a fast and fun way.”

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Microsoft will soon shutter its music store and streaming service, move users to Spotify

You can’t fault Microsoft for trying, but Groove Music, its Spotify competitor, never took off. Today, the company is admitting defeat. Microsoft today announced it will shortly shutter both its Groove Music Pass streaming service and the ability to purchase songs and albums in the Windows Store.

Given how competitors like Spotify and Apple now own the markets for streaming and purchasing music online, this move doesn’t come as a total surprise. What does come as a surprise, though, is that Microsoft has partnered with Spotify to move all its Groove Music Pass clients over to Spotify.

Starting December 31, the Groove Music app will lose its features for streaming, purchase and downloading music. Microsoft promises that moving to Spotify will be fairly seamless and that virtually all the ballads and playlists that Groove users generated over the years will transfer to the new service.

Windows Insiders will be able to exam this out with the next update, which is scheduled to roll out next week. Users will have until at least January 31, 2018 to make the move, though.

For the most part, Spotify offers a superset of Groove’s music catalog, so except for a few edge examples, there’s no reason to believe that moving to Spotify would be a great loss for Groove Music Pass customers. And because Spotify is available on Windows Phone, too, even the few users still left on Microsoft’s failed mobile platform won’t miss out.

As for Groove Music itself, Microsoft says the actual app won’t go away anytime soon. It’ll still be available for playing back and managing music that’s stored locally.

Microsoft isn’t likely to come out and bluntly say that it has failed to capture any relevant market share in this space, but this move is about as clear an admission as any. The $9.99 Groove Music Pass subscription never offered any features to set it apart from Spotify, iTunes and similar services. To be fair, it was a perfectly competent music streaming service, but there was nothing special about it.

It’s worth noting that the Windows Store also offers games, video content and books. Here, too, Microsoft faces formidable challengers ranging from Steam( at least for PC gaming) to Netflix and Amazon. It doesn’t sound like we should expect similar “partnerships” in these areas, though, which attains sense, bearing in mind the fact that games and video content also play a major role in the Xbox ecosystem. As for volumes, though, I can’t imagine Microsoft is making a lot of money here or that offering an e-book store dedicates it much of an edge.

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