Specialist
Independent Director, former C-level executive at Pandora Media Inc
Agenda
- Premium subscriber volume growth outlook and pricing
- Subscriber acquisition and royalty cost trends
- Distribution partnerships and implications for subscriber ARPU
- Premium and Freemium positioning vs Apple and Amazon
- Challenges with launching in India
Questions
1.
What would you say are the key takeaways from Spotify’s most recent Q4 numbers?
2.
How are user hours shifting in the US market? What is the typical mix or what trends are you seeing?
3.
How mature is the streaming platforms market in the US? Do you see additional upside of brand-new users?
4.
What kind of percentage growth rate would you ascribe to the US streaming platform market over the next 12-24 months if you expect new customers to come in?
5.
How do you think Spotify can achieve around 10% growth in MAUs [monthly average users] in the US? How is it competing commercially, considering that it has just ceded the market share top spot to Apple?
6.
Do you expect the premium subscriber base in the US to become less profitable in terms of margin in the future, given the expense of the promotions and customer acquisition costs with the hardware from Google?
7.
Are most new customers in the US acquired via promotion?
8.
What proportion of listener hours do you think are captured by major publishers on a platform such as Spotify?
9.
What level of subscriber growth is there in non-core markets? Latin America has been a major driving force for the business over the last couple of years. What are the relevant ARPU trends in Latin America?
10.
My understanding is that the gross margin between streamer and label has always been around 50/50 with the label sharing an additional 20 with the artist. Is that a sensible dynamic to use and do you see it changing in future as these deals are renegotiated?
11.
Spotify’s ad-supported gross margin was 22.1% for the quarter. How does that figure compare to its peers? Is Spotify not fully utilising the inventory and the spaces between songs?
12.
You mentioned that what the business terms the rest-of-world market is largely driven by Latin America. How would you expect ARPUs to perform in these rest-of-world markets vs core European and US markets?
13.
Do you think that the adoption of the premium model is different in markets outside of the US?
14.
Presumably the US is unique in its high penetration of the major labels as a percentage of total spins. Is it cheaper in terms of royalties to operate in other markets?
15.
You mentioned that Spotify is trying to diversify its user hours away from the big labels and the high pay- away spins. What response do you think that will elicit from labels when it comes to renegotiating royalty rates?
16.
Spotify has had a delayed launch in India, where you mentioned there is a huge potential audience. Do you expect that the labels will ultimately go along with Spotify and enter that market to access that audience?
17.
What challenges do you expect for the Indian launch? It has been suggested as a major source of upside for monthly active users and subscribers.
18.
How much of a competitive threat to labels do you think Spotify for artists is?
19.
Do you think the direct upload feature for artists will change the mix in user hours? If there are a lot of independents on the platform, could Spotify manipulate playlists to direct more user hours towards content it owns? Is that a feasible strategy?
20.
Do you feel there is anything we haven’t touched on today or are there any other observations you would like to leave with the audience?
21.
You pointed out that streaming services is not the core of Amazon and Apple’s business. How much room does that give Spotify to offer more attractive deals to labels in return for content which drives usage, particularly in the US?
22.
Spotify’s marketing cost has previously been below its peers. Do you think that will have to change?
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