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Why Streaming Struggles
JimH:
Spotify financials for 2020:
https://s22.q4cdn.com/540910603/files/doc_financials/2020/q4/4e770a8c-ee99-49a8-9f9e-dcc191807b56.pdf
Scroll down a page and look for this line:
Net loss attributable to owners of the parent (581)
(581) represents a $581,000,000 loss for the year 2020.
JimH:
MobiTV raised $163 million, but filed for bankruptcy this year. TiVo bought its assets for $18.5 million.
https://en.wikipedia.org/wiki/MobiTV
JimH:
Not exactly streaming, but still ...
Plex has raised a lot of money.
April, 2021 $50 million.
February, 2022 $20 million
https://www.crunchbase.com/organization/plex/company_financials
So why? If a company raised $50M a year ago, why are they raising $20M now? Either they are losing a lot of money or they feel compelled to spend heavily (acquisitions, for example).
Crunchbase says they've raise $81 million total. $70 million in the last year.
JimH:
Spotify lost $270 million on $3.2 billion in their last quarter ending December 22.
https://www.google.com/finance/quote/SPOT:NYSE (Financials are toward the bottom on the right side)
The loss is a little less than 10% of revenue. If the loss continued at this rate, they would run out of cash around the end of 2025.
But they hope to make it up on volume.
JimH:
Billboard in-depth article about Tidal and Block's strategy:
https://www.billboard.com/business/streaming/tidal-streaming-service-block-financial-services-1235544785/
It also covers streaming in general.
"And yet, the music streaming business model has yet to produce many profits for anyone, even a company as big and as synonymous with the space as Spotify, which reported a 2022 annual operating loss of 659 million euros (around $720 million) and recently slashed 17% of its work force, or some 1,500 jobs, in the pursuit of profits."
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