Chapter 1263 The more you share, the more you gain

Now that I have encountered Spotify, there is no reason for Zhou Buqi to miss it, and I have to participate in it no matter what, and invest a sum of money. In the future, this will be the world's largest music streaming giant, with a market value of more than $50 billion at one point.

However, this is the state of his rebirth.

What about the longer term?

For example, what will happen in 30 or 40 years?

If the foresight fails, Zhou Buqi will have to make a judgment based on his understanding and thinking of the industry in the Internet in this life.

He is not optimistic about the longer-term development of Spotify.

In the past few months, he conducted an in-depth inspection of the video streaming market. After several rounds, he finally gave up the acquisition of Hulu and chose to follow up with Netflix.

Netflix has a bright future, whether it is 30 or 40 years later, it will be an excellent world-class company. Because in terms of operating model, Netflix and Spotify are fundamentally different.

Netflix has its own series.

And, very powerful!

Not only can I make TV series by myself, but I can also recruit the best directors and actors in Hollywood to make streaming movies. It's not the kind of shoddy "big Internet movie", but the kind that can hit the Oscar for best picture.

Now Netflix has not opened this route.

Because the video streaming business is just emerging, Hollywood giants are still in the groping stage. After a few years, when Netflix becomes bigger, Hollywood is going to be a moth, and they will collectively raise the price of film and television copyrights.

The ultra-high copyright price makes Netflix miserable. The money raised from the market is used to buy copyrights, and it faces huge losses every year.

Even so, many high-quality copyright Hollywood giants are unwilling to authorize, and will only broadcast exclusively on their own platforms. For example, Disney animation can only be seen on Disney media; for example, HBO TV series can only be seen on its own TV station.

No way, Netflix can only engage in self-made dramas.

This is not only a helpless move, but also a correct path to stand out in the cracks. In the streaming media industry, copyright is the "core technology". Whoever owns the copyright has the absolute right to speak.

Once the streaming media platform has no copyright and can only rely on external provision, it will encounter the risk of being stuck. The copyright owner drives up the price, which will squeeze all the profits of the platform side.

Like Spotify.

Even if the company is the world's largest music streaming platform, it has never made a profit. At most, the annual revenue exceeded 5 billion U.S. dollars, but 3 billion to 4 billion U.S. dollars were handed over to the four major music giants as copyright fees. The more you earn, the higher the copyright fee, and the more serious your own losses.

The nature of the music industry makes it impossible for Spotify to engage in "self-made music" like Netflix.

There are giants in the film and television industry, but no oligarchs. There are thousands of film and television companies in Hollywood, tens of thousands of film and television companies all over the world, and the competition is fierce.

The music industry is different. There are four major music giants in the world, Universal, Sony, Warner, and EMI. Even Universal Music intends to acquire EMI Music and become the three major music giants. (acquisition completed in 2012)

This is an oligopoly industry.

The harmfulness and high concentration of monopoly make it impossible for Spotify to grow out of the cracks in the way of self-made music, and it will always be subject to the copyright owner.

If Spotify is an American company, such as Apple, Amazon's music streaming business. These Silicon Valley giants are very powerful, and the three major music giants combined are not enough for a little finger, so they dare not be too bullying. Spotify is an independently developed Swedish company. When it went public, it even chose the DPO model instead of an IPO, and offended Wall Street. The difficulty can be imagined.

Through his own analysis and understanding, Zhou Buqi does not think that Spotify will have a very bright future. Unless Spotify is willing to sell itself and commit itself to the super giant.

But it doesn't matter, the current Spotify has just A round, so get involved. After a few years, when Spotify goes public, the big deal is that it will earn dozens of times and quit.

Even once Ziweixing International Group develops, it may not be able to rewrite the deformed state of the music industry in the previous life.

Once the overseas business of Ziweixing International Group develops, it will have the qualifications to talk to the three major music groups and the strength to wrestle with the arms, which is far beyond that of a small company such as Spotify.

At that time, with the help of the relationship and favor established in the previous rounds of financing, maybe Ziweixing International Group will be able to completely acquire Spotify in the future.

Maybe it can solve this stuck copyright dilemma.

Right now, let’s squeeze out Mr. Li Jiacheng first, and Ziweixing will come forward to complete the A-round investment in Spotify!

For Spotify, of course they also hope that this A round of financing will be led by Ziweixing.

Mr. Li Jiacheng is very powerful, but he is just a businessman in a traditional industry. He can't give anything but money. Ziweixing is different. This is an Internet technology company. In addition to giving money, it can also bring technology, market, industry resources and strategic planning to the young startup Spotify.

The current situation belongs to Lang's love and concubine's intention.

However, before that, Zhou Buqi wanted to know about the status quo of Spotify, he was very curious. There are tens of thousands of music websites all over the world. Why did Spotify, a small country in Sweden, come out?

How did you convince the four major music groups to authorize the original version?

Daniel Eck said: "We have also investigated this market a lot and made a judgment after many analyzes."

"How?"

"Equity cooperation."

"Equity?" Zhou Buqi frowned, falling into traditional thinking, and said in surprise, "Your round A round hasn't started yet, have you received strategic financing from the four major music groups before?"

Daniel Eck shook his head, "It's equity cooperation, not strategic financing."

Zhou Buqi still didn't understand, "What do you mean?"

Martin Lorenson, another founder next to him, said quickly, "We took out 25% of the shares and gave them to the four major music groups for free according to the proportion of the music copyright market share."

"ah?"

Zhou Buqi was stunned.

Depend on!

Still have this kind of operation? Give away shares for free?

Spotify has only been online for more than a month, and it has more than 1 million users. With such a growth rate and development potential, it is easy to value tens of millions of dollars.

25% of the shares, for nothing?

Daniel Eck said: "No online music platform has ever been able to sign a licensing agreement with the four major music giants at the same time, which has resulted in insufficient music on various music platforms. Users sometimes have to go through many platforms to find what they want to listen to. This is very troublesome. We know that music streaming is difficult to do, and if we want to be successful, we must solve this market dilemma and create a music platform with a sufficient copyright library.”

Zhou Buqi took a deep breath and was very impressed, "This is the core competitiveness."

Daniel Ek nodded slightly, "That's right, so we have to persuade the four major music giants at all costs, sign with them, and get enough music copyrights."

Martin Lorenson added: "Spotify has a free plan and a paid plan. The free plan relies on voice advertising, and the paid plan relies on paying membership."

"A voice ad?"

"When the music is switched, there will be a voice advertisement of about 10 seconds in the middle. This is our innovation in the business model and has been recognized by many parties."

"Well, it's really good!"

Zhou Buqi praised them again.

Indeed, this model is very innovative.

The conversion efficiency of traditional page advertisements is too low, especially for music websites. When users listen to music, they often only listen to it without watching it, and are busy with other things at the same time. The existence of page advertisements is meaningless. If advertisers don’t like it, they won’t get advertising fees.

But a voice ad between song jumps would be nice.

Since it is listening to music, it must be inseparable from listening. During this process, the content of the voice advertisement will be heard verbatim, and the advertising effect will be very good.

The free model relies on advertising revenue, and the paid model relies on membership revenue... This is the main business logic for many Internet companies to make profits. Most of the online music platforms are doing this, and the homogenization is very strong. Spotify is different, and has embarked on a new business model.

Coupled with the free gift of shares and the stable income from legitimate music, for the four major music groups, what reason are there to refuse?

Want free money?

There is no such reason in the world.

In this way, Spotify has become an epoch-making product, taking down all the four major music giants. Relying on the most abundant music copyright library in the world, it exploded in the market only one month after its launch.

The company started its business in 2006, and has been painstakingly studying its business model and operating philosophy for the past two years, but has yet to launch a real music product.

The product was launched last month, which can be called "if you don't make a sound, you will be a blockbuster".

Zhou Buqi was very emotional, "The more greedy you get, the less you get; the more you share, the more you get. If you want to get something, give first. There has never been a business in this world that can only get in and out. Many people understand this truth, but There aren’t many people who can actually do that. I appreciate your free equity giveaway.”

Being praised one after another, Daniel Ek was very happy, so he invited Zhou Buqi to his desk to look at Spotify's products together.

"Don't look at it." Zhou Buqi waved his hand, "The business model is the strategy, and the quality of the product is the tactics. As long as the strategy is right, it doesn't hurt even if the tactics are flawed."

Daniel Eck also complimented him, "Mr. Zhou is indeed a big boss, your advice is thought-provoking."

Zhou Buqi smiled, "In which country is your website launched?"

Daniel Eck said: "Not only the website, but also the software. At present, besides Swedish, it is mainly English. After it was launched in the UK, it attracted the attention of Mr. Li Jiacheng. After getting the A round, we plan to quickly Develop more language versions for the European market. And push Spotify into the US market.”

Zhou Buqi nodded, "Well, the train of thought is fine. How is the discussion with Li Jiacheng going?"

Daniel Ek hesitated for a moment, thinking that he should tell the truth, the more frank and smarter he is in front of big shots, "The preliminary plan has been reached, with a valuation of 50 million US dollars. We plan to dilute 20% of the shares and raise 10 million US dollars. Now there is a little trouble, there are two institutions in Sweden want to invest, we need to coordinate the investment ratio of all parties.”

"No need to coordinate!" Zhou Buqi waved his hand, decisive and resolute, "You should spend more time on product improvement and market expansion, and don't waste too much energy on capital operations. 10 million US dollars, I'm out!"

"What about the valuation?"

"According to what you said, 50 million US dollars, no problem!"

Zhou Buqi is already a big boss, so it's too embarrassing to care about such a small business. It stands to reason that Ziweixing's investment of US$10 million in Spotify's financing is strategic financing.

Since it is strategic financing, you can get more favorable conditions than the market price. Maybe a $40 million valuation would be enough. But it's not necessary, let's take it down first!

If you care too much, it is easy for the other party to look down on yourself. The future cooperation is still in the long run. Let them see Boss Zhou's courage and uncompromising personality.