It's no exaggeration to say that streaming has completely infiltrated our lives in recent years. Whether it's music or video, most of us are regular, if not daily, users of services like Apple Music, Deezer or Prime Video.<\/p>\n
Each of these industries has its leader. On the music side, Spotify. On the video side, Netflix. The models are similar, but not quite the same. In particular, Netflix owns part of its content - which means significant investment, amortized over time - whereas Spotify depends entirely on third parties for its music - which means paying royalties in proportion to the number of streams. In a nutshell, we're in a landlord vs. tenant situation.<\/p>\n
\u00a0Spotify has just announced a price increase of around +10%, with the base price rising from \u20ac10 to \u20ac11. Sounds wonderful, you may say, as it should get them out of the rut. Not so fast, though.<\/p>\n
\u00a0Like all other music streaming platforms, Spotify is legally obliged to remunerate rights holders, to the tune of 70% of what it earns: when you pay \u20ac10 to Spotify or others, only \u20ac3 actually goes into its pocket. With this 3\u20ac, Spotify must 1\/ pay its salaries, marketing, R&D..., and 2\/ generate a profit margin that will \"remunerate\" its shareholders. For the moment, this is not the case: another \u20ac100m in negative (adjusted) operating income this quarter. Of course, the cards are far from being stacked - the industry structure is not yet set - and it is entirely possible that Spotify will reach the critical point where operating leverage will come into full play.<\/p>\n
\u00a0Let's get back to our price increase. The small euro increase, which should pass without any great elasticity, will boost Spotify's sales, but will mechanically increase its bill to artists and majors: from \u20ac7 to \u20ac7.7 for the latter, and from \u20ac3 to \u20ac3.3 for Spotify.<\/p>\n
As indirect shareholders in UMG via our investment in Pershing Square, we applaud this decision: after all, Money for nothing is a song we like to listen to.<\/p>","protected":false},"excerpt":{"rendered":"
Ce n\u2019est pas peu dire que le streaming s\u2019est totalement infiltr\u00e9 dans nos vies ces derni\u00e8res ann\u00e9es. Qu\u2019il soit musical ou vid\u00e9o, la plupart d\u2019entre nous sommes des…<\/p>","protected":false},"author":8,"featured_media":4167,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-4166","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-le-billet-de-monocle"],"acf":[],"yoast_head":"\n