Spotify could be more popular than Instagram; here's why it is not

If the first thing that comes to your mind when reading this title is “you can’t compare apples and oranges”, watch me.

[Roll intro]

In this basket full of oranges, apples and some exotic Chinese fruits, Facebook leads the ranking with more than 2 billion active users worldwide, YouTube comes second (1.5 billion), while WhatsApp and Messenger tie for third place with 1.3 billion each. Not far behind, Instagram and two Made in China competitors — WeChat and QQ — play hard to join the billion-user-club.

Since it has a paid subscription plan, Spotify is no apples or oranges, but even considering the broader number of customers, which includes non-paying fellows, it would reach, at best, 150 million users. This means the most popular music streaming service in the world would be allocated a (not so) honorable 18th place in this list, after Pinterest, SnapChat and Tumblr. Clearly, something is wrong.

Actually, some things:

(1) Identity — Spotify was officially launched on October 2008. Four years later, in a CBS interview, CEO Daniel Ek, when asked whether Spotify was “a music app or some kind of social media”, came up with: “It’s probably a bit of both”. Wrong. Spotify is a music app. “Some kind of social media” is what it should be. There’s a solid chance that this “a bit of both” fable blurred Spotify’s identity pretty badly. And that’s why those typical social media symbols, such as ‘picture profile’ and ‘followers’, seem so much besides the point every time you unwittingly bump into them on the app.

(2) User interface — You have all the spreadsheets, Dani. So, answer me: how many users over 50 years old does your service have? Now, give Reed Hastings a call and ask him how many Netflix does have. That’s what I thought... Turns out Spotify’s landing page is a masterpiece of giving too much unnecessary information right away (“listen on PlayStation”, “listen on Hulu”, “music every Monday”…) and saying nothing at the same time. Quite different than “Watch anywhere. Cancel at any time”, right? Moreover, Spotify actually may be something wider than a music service and a social network, because the app sure is a puzzle game as well. There are too many boxes and playlists, and there is this “browse” tab that leads the user to more boxes and playlists and genres and “moods”… and good luck with that. If the strategy is to boost the time people spend on the app, it could be wiser to use a decent algorithm as everybody does, not a maze.

(3) Partnerships — There are some strong partnerships Spotify has missed the last nine years — Shazam being the most obvious one — , but there is plenty of room to create other connections— TV brands, car manufacturers, AI developers, lyrics sites… Note that there are only four tech giants who don’t need friends; all the rest (Twitter, Snap, Microsoft, Uber, media companies in all 61 countries Spotify operates…) won’t mind talking business.

(4) Good news —The way Daniel Ek dealt with that Taylor Swift episode will probably be a big chapter on some crisis management book some day — in the What Not To Do section. And, apparently, lessons from 2014 weren’t learnt well: recent “Spotify denies allegations it uses fake artists to cut royalty costs” and “Who are Spotify’s terrible gamer playlists actually for?” headlines confirm my suspicions. In addition to that, even when the story actually brings good news, as in this case, it takes a while to understand there is something good about it.

(5) Creativity — I can deal with a lack of creativity in the headquarters of ArcelorMittal or at one of the Posco offices. But if your business is made of music and not of steel, it is hard to find a good excuse. Brainstorm, pal: exclusive sessions, podcasts and interviews, old bands reunions, concerts with a cause… the list goes on indefinitely. It’s music, which means anything will do the trick. Well, anything except that ghastly YouTube channel.

(6) Content creators — I love that chart comparing Beyoncé’s number of streams on Spotify with the price the company claims to pay for each time a user play her music, resulting in US$ 3.5 million for just five songs. This doesn’t seem right, right? It all went down when Ek tried to overjustify his expenses and published the amount of money the company pays out per stream as something “between $0.006 and $0.0084”. Don’t ask me why he did that — a lack of good friends would be my best guess. Since then, all of the 2 million artists under Spotify’s flag complain on a daily basis that they’re not properly compensated by the service — because, let’s be honest, 1) they're not, 2) it doesn’t matter how much they get, they’ll always be whining about it. However, there is still a lot of room to reach the content creators community, from the most obvious approaches, such as festivals and awards, to the not so obvious ones, like this cool service from Epidemic Sound.

In the last four years, if the six topics above had been steered towards the right direction, Daniel Ek’s music service would be as popular as Instagram. Worst case scenario, Spotify should be more popular than it is right now. It looks like a motivational poster, but it’s maths: in the beginning of 2013, Instagram, with 90 million users back then, was 3.7x bigger than Spotify. Today, it is 5.7x.

It may sound delusional, but Spotify already wiped out the real challenge: there are, at least, 60 million souls willing to pay, every month, for its services (don’t take my word on this one, ask the guys from The New York Times and their much, much smaller — 25x smaller — list of subscribers. Now I’m comparing oranges and frogs…). Which leads us to one last advice: stop messing with your subscription plans and drop this “99” bullshit (“First three months for $0,99”, “Get a year for $99”) — that only makes you look desperate (like newspapers). Have in mind that, despite oranges and apples, there is still time to recognize that Spotify does have “99” problems, but the business model ain’t one.