This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Spotify Will Die an Expensive and Embarrassing Death

Stocks in this article: AAPL P

NEW YORK ( TheStreet) -- I've spent considerable time trying to make sense of Spotify's apparent $3 billion valuation. In fact, I have been trying to figure Spotify out for nearly a year now.

Why is it the darling of private equity and Wall Street?

Whenever I conclude Spotify is a poser, I return to the drawing board. I feel dirty, like I'm thinking impure thoughts about a hot mom at my kid's school or breaking the 11th commandment -- Thou Shall Not Say Anything Even Remotely Negative About Spotify.

Soon, Goldman Sachs (GS) will tell us that Jesus Christ listens to Spotify.

Forgive me for being hyperbolic or sacrilegious, but, my fragile child, things have gotten ahead of themselves, even out of control.

Anecdote alert: I paid for a monthly subscription to Spotify. I still can't figure out exactly what I'm paying for. Spotify feels like a glorified iTunes. A really busy, not-very-useful, not-even-close-to-intuitive iTunes.

Spotify makes me want to beg Apple (AAPL) for forgiveness. Like so many others, I have been hard on iTunes. But, man, it hits the spot. It's everything it needs to be. The modest version 11 upgrade, due any minute now, ought to be just right.

When I'm not forcing myself to sample Spotify, I use one of three sources for music: iTunes, Pandora (P) or Google's (GOOG) YouTube.

These are complementary services:

  • iTunes: When you know exactly what you want to listen to. After all, your library contains songs you purchased and/or downloaded. iTunes also plays a key role throughout the purchase process, particularly at fulfillment.
  • Pandora: When you want personalized radio and discovery.
  • YouTube: You know what you want. Or you seek videos, covers, bootlegs, lyrics and/or exploration/discovery.
  • Spotify tries to play each role, specifically with respect to iTunes and Pandora. I'm sure that's possible, but Spotify just doesn't do a very good job of it. Jack of many trades, master of none.

    But that's all subjective stuff. For every person like me who just can't get with Spotify, there are several -- or, given the number of users it claims, like one-tenth of a person -- who love the platform. (We won't even get into Spotify's scale problem; something Pandora does not have to deal with).

    As a business, Spotify has no future. With Spotify in the news so much, I'm not quite certain why Pandora gets branded as the company with the unsustainable business model. That could not be farther from the truth.

    1 of 2

    Select the service that is right for you!

    Action Alerts PLUS
    Try it NOW

    Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

    Product Features:
    • $2.5+ million portfolio
    • Large-cap and dividend focus
    • Intraday trade alerts from Cramer
    • Weekly roundups
    TheStreet Quant Ratings
    Try it NOW
    Only $49.95/yr

    Access the tool that DOMINATES the Russell 2000 and the S&P 500.

    Product Features:
    • Buy, hold, or sell recommendations for over 4,300 stocks
    • Unlimited research reports on your favorite stocks
    • A custom stock screener
    • Upgrade/downgrade alerts
    Stocks Under $10
    Try it NOW

    David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

    Product Features:
    • Model portfolio
    • Stocks trading below $10
    • Intraday trade alerts
    • Weekly roundups
    Dividend Stock Advisor
    Try it NOW

    Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

    Product Features:
    • Diversified model portfolio of dividend stocks
    • Alerts when market news affect the portfolio
    • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
    Real Money Pro
    Try it NOW

    All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

    Product Features:
    • Real Money + Doug Kass Plus 15 more Wall Street Pros
    • Intraday commentary & news
    • Ultra-actionable trading ideas
    Options Profits
    Try it NOW

    Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

    Product Features:
    • 100+ monthly options trading ideas
    • Actionable options commentary & news
    • Real-time trading community
    • Options TV
    To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
    Submit an article to us!


    DOW 18,053.71 +23.50 0.13%
    S&P 500 2,088.77 +6.89 0.33%
    NASDAQ 4,806.8590 +33.3870 0.70%

    Brokerage Partners

    Rates from

    • Mortgage
    • Credit Cards
    • Auto

    Free Newsletters from TheStreet

    My Subscriptions:

    After the Bell

    Before the Bell

    Booyah! Newsletter

    Midday Bell

    TheStreet Top 10 Stories

    Winners & Losers

    Register for Newsletters
    Top Rated Stocks Top Rated Funds Top Rated ETFs