![]() A direct listing means that Spotify won’t have to pay investment banks millions of dollars in fees to set that price, but it could result in less stable share prices. To put it simply, a traditional IPO makes things a little more predictable since it helps to establish a general price range for the stock. This approach comes with its own risks and rewards. Rather than go through the traditional IPO process, which involves paying investment banks to raise money and set the price for the stock, Spotify is opting for an unusual process known as a “direct listing.” Though widely expected, there is nothing “typical” about Spotify’s decision to go public. The twist is that Spotify is actually trying to go public without an IPO. Since Spotify’s first language is the playlist, here’s a track-by-track primer of what you need to know… That means you should probably get familiar with the broad strokes of what’s going on with the company. Whether you’re an avid Spotify user or an analog holdout, this news will likely affect how you listen to, buy, and experience music over the next decade-plus. That level of mystery is going to make a lot of investors very rich or very depressed, but what about artists and listeners? These are the people who actually make Spotify possible, and their fortunes (or lack thereof) will also be tied to the company moving forward. On the apparent eve of its public offering, the story of Spotify remains rife with blank pages. Anyone who claims to know exactly how Spotify’s future will play out is either lying or full of shit, and that’s scary news for a company looking to attract new shareholders by the droves. And yet few have any real idea what’s in store for Spotify in the months and years after it goes public. Or does it? Many in the music industry have accepted Spotify’s quick ascension to the top of the streaming heap as an inevitability, but questions linger about the service’s ability to turn a profit - both for itself and for the artists forced to adapt to its new reality.Ī case-in-point: Few were surprised by a recent Axios report that Spotify has filed IPO documents with the Securities and Exchange Commission, a sign that the company intends to go public in 2018. No other company or concept is more responsible for the music industry’s commercial resurgence in the post-iTunes years, and the outlook for 2018 looks even brighter than 2017’s record-setting year. In the eyes of record company executives, many of whom initially regarded the company as Piracy Lite, Spotify has swiftly gone from pariah to messiah. Nearly a decade after its 2008 debut, Spotify stands as the largest streaming service in the world by a wide margin (140 million active users and 70 million subscribers, dwarfing runners-up Apple Music and Amazon). The Swedish-born service wasn’t the first to bank on streaming as the future of music, but it was the first to propose a business model that married the wants of listeners (more songs available on demand) with the needs of the major record labels (more money). Love it or hate it - and some musicians truly, deeply hate it - Spotify has already joined the gramophone, Walkman, and iPod as one of the iconic listening tools in music history.
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