We did not photoshop any of this. This is a real screenshot!
A lot of people in the music community have been scratching their heads over the new NY Times subscription offer that includes Spotify Premium. Songwriters are trying to figure out:
Exactly how it is we ended up subsidizing newspaper subscriptions? You see the COMPULSORY (can’t say no) federal license for songwriters gives us 10.5% of revenue generated by streaming services. So a cut rate Spotify subscription bundled with The NY Times, is essentially a pay cut to songwriters.
Or wait, did songwriters just get a pay boost because now we get some percentage of The NY Times subscription revenue?
More likely the former rather than the latter. But we will never know since the federal compulsory license doesn’t allow songwriters to audit!
Meanwhile most media commentators have focused on the joint subscription as an apparent sign of weakness, or weirdness from the NY Times. Certainly the screenshot above argues for weirdness.
On the face of it the NY Times does have something to gain. Spotify reports it has 40 million subscribers* while NY Times has just 3 million subscribers. Bloomberg noted that NY Times could reach Spotify’s millennial (snake people) audience, you know, cause like Buzzfeed.
But I personally wonder if this doesn’t have something to do with the Spotify IPO disaster. If you don’t know Spotify took $1.5 Billion in convertible debt premised on a 2016 or early 2017 IPO. There are now only a few weeks left before the reported terms of that debt begin ratcheting up. Higher interest rates and promised stock discounts will cut deeper. There are now reports that the Spotify IPO won’t happen til 2018. Yet every six months the interest rates on the convertible debt go up and discounts get larger. Ouch! Could the metastasizing debt makes the young company’s IPO offering less attractive?
But this is where it gets very weird. With Spotify now helping improve the bottom line at The NY Times will editors at “the newspaper of record” be hesitant to cover Spotify financials in a negative way? Give them the benefit of the doubt on a disputed point? Soften a headline?
Let’s hope not.
* it’s never clear what Spotify really means when they report “subscribers.” Are these real full price $9.99 subscriptions or highly discounted trial subscriptions subject to massive churn?