Spotify’s results are a great example of why we’re seeing tech layoffs. Impressive revenue growth of 18% year over year is dwarfed by costs growth of 44% year over year.
Such gaps in costs versus revenue growth scares shareholders which is why layoffs.
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Spotify is unique in that it’s a very low margin “tech” business.
It’s probably much more justified in cost growth than FB/Goog/etc bc it needs to buy its way into adjacent markets like podcasts, where it can actually make good money. The strategy seems sound.
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The strategy to grow beyond the low margin music licensing business is sound since record labels renegotiate contracts to continually eat their profits.
The devil is in the details with regards to ROI of their podcasting investments.
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You beat me to it but a bit mini dive on their efficiency here
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