🦄 vol. 28
sash and matt chat about the music streaming industry and crypto crowdfunding
stream battles 🎧
It’s Monday morning. I just listened to my favourite amapiano playlist at the gym, Matt and Karl are listening to the All-In podcast on the way to work, and Claude’s phone just woke him up to the sound of Marvin’s Room.
You see, as 20-something-year-olds, we’ve all been around for long enough to witness the rapid evolution of how music is distributed and consumed. Sh*t wasn’t always this easy.
A (non-exhaustive) walk down memory lane 👴🏾
Let’s hop into our imaginary time-travel machine… skip past vinyls (1950s-1970s) and cassettes (1980s), and land in 1999. I was about 3 years old, and although you could still find cassette tapes in my house, compact disks (CDs) were very much the go-to vehicle to distribute (and consume) music.
Cue: the rise of the internet, piracy… and eventually streaming. 📈
🏴☠️ Napster (1999): A peer-to-peer (P2P) MP3 sharing platform. At its peak, it had north of 21 million users… before it had to shut down its P2P model due to copyright laws in 2001.
🏴☠️ Limewire (2000): If your computer managed to survive the imminent viruses (mine didn’t), Limewire pretty much served the same purpose as Napster. At its peak, it had more than 50 million users… before it was heavily fined and shut down in 2010.
🍏 iTunes (2001): While the likes of Limewire were still around, Steve Jobs famously launched the iTunes Store alongside the (now extinct) iPod - an online library of music where you could buy 1x song for as much as $0.99. But while it legitimised online purchases, it wasn’t quite streaming.
🅿️ Pandora (2005): Arguably the first major mover in the streaming space, this platform championed music recommendations based on listening history. While it took a while to gain traction, it peaked at ~80 million users in 2014, and since shifting to a subscription model, it peaked at 6.3 million subscribers in 2020.
Today, it shouldn’t surprise you that we have loads of music streaming service options. But I think we all know that there are a few really big players in this $19 billion+ industry.
The competitive listener landscape 🤓
As per this report, Spotify has about a third of all music streaming listeners worldwide, with Apple Music in second place. Notably: Tencent Music and Netease are Chinese platforms.
Let’s take a closer look at a few of these… 🧐
🟢 Spotify: Launched in 2006
~381 million daily active users
~165 million paying subscribers
Freemium model (free with ads; premium subscription without)
⚪️ Apple Music: Launched in 2015
~88 million daily active users
~88 million paying subscribers
Premium subscription (no ads) offering only
🔴 YouTube Music (the dark horse): Launched in 2015
~2 billion 🤯 daily active users
~50 million paying subscribers
Freemium model (free with ads; premium subscription without)
Notably: While YouTube Music is still catching up on paying subscribers, it has the biggest addressable user base (~2 billion regular YouTube users). 👀
What is also clear is that Spotify is miles ahead on paying subscribers. But what are they doing to maintain their dominance? 🤔
“Content is King”👑
It was Bill Gates who first coined this phrase in a letter on Microsoft’s website in January 1996. Turns out Uncle Bill was spot on. 🎯
Let’s take a look at a few examples from Spotify:
🔀 Diversification: Spotify added podcasts to its core product in 2018, and further expanded into audiobooks this year.
🎨 Creator deals: Spotify has done a host of big 💰 deals to secure and produce exclusive content on its platform. For example, Joe Rogan’s alleged ~$200 million podcast deal and the supposed $100 million towards content from "marginalised groups”.
💡 User-generated content: if you’re like me and you’re not a Spotify subscriber, you have to admit that the annual Spotify Wrapped gives you FOMO. It’s pure genius.
🤝 Exclusive partnerships: To further extend their reach, they’ve signed (really clever) partnerships with the likes of Uber and Walmart too.
Look, we’ve (hopefully) come a long way from pirating music on our desktop computers. And while there are now several music streaming services to choose from, Spotify has emerged as the clear global leader (in terms of listener share).
But what about on our continent? 👀
Stay tuned for part 2 where I’ll take a deeper dive into the music streaming landscape in Africa. 😉
crypto crowdfunding 💎
For the last few weeks, the world has been gripped by the harrowing scenes that have emerged from Ukraine, as Putin launched an unprovoked offensive that may usher in the end of “long peace”.
The response of global powers… 🌍
has been swift yet prudent. World leaders were quick to condemn Putin’s actions and impose economic sanctions, multinational companies have halted product delivery and paused services (including Apple, Samsung and Netflix) and sporting bodies hastily flexed their “soft power”. The global military response has been far more cautious, perhaps, understandably so...
And where help hasn’t been offered, it’s been asked for… 🗣
...and not through typical channels. Ukraine’s vice president called on Elon Musk to assist by deploying Starlink satellites for internet connectivity and Musk did so without delay.
But war is expensive… 💸
and so solicitation of help didn’t stop there. Historically, wars have been funded using four levers: money printing, increased taxation, selling government debt to the public (war bonds) and acting as a debtor to other nations. Ukraine had another idea….
And after this, crowdfunding may be the fifth… 5️⃣
as Ukraine went on to raise ~$100 million in a couple of weeks from more than 35,000 cryptoasset donations. In the process, it became the largest crowdfunding raise in history, and surpassing some notable mentions:
🍽 America’s Food Fund, via GoFundMe, which raised $45 million in 2020 to aid those facing food insecurity as a result of pandemic.
🧱 We Build The Wall, initially a GoFundMe page that became a political movement, went on to raise more than $25 million to fund the construction of sections of a wall along the US-Mexican border.
📜 And more recently, a few thousand people banded together, under the name ConstitutionDAO, and raised $46.3 million to buy a rare copy of the US Constitution (but got pipped in the end).
So what? 🤔
Using cryptocurrency as a medium for crowdfunding almost seems like a no-brainer, but hindsight is always 20/20. It allows for speedy payments with low-fees (in most cases), with added privacy and security (in some), bypassing most of the inefficiencies of our financial systems.
matt hasn’t shut up about marc andreessen’s blog post guide to career planning; there’s a part one and part two
sash was interested to hear that spotify reported 1.5 million subscriber cancellations due to the ongoing war in ukraine