Each week, Farhad Manjoo, technology columnist at The New York Times, reviews the week’s news, offering analysis and maybe a joke or two about the most important developments in the tech industry. Want this newsletter in your inbox? Sign up here.
Good morning, readers! Let’s talk about tech.
The stock market hasn’t been kind to new consumer start-ups. Snap, the maker of Snapchat, has been dogged by sluggish user growth since it hit the market last summer; its stock price is still below its $17 I.P.O. price. Blue Apron, the meal delivery start-up, is also trading far below what investors paid for its stock last June. The apparel retailer Stitch Fix, meanwhile, has gained some ground since its I.P.O. in November, but only barely.
Now Spotify thinks it can buck the trend. After months of windup, the music-streaming company filed documents this week to sell shares on the New York Stock Exchange. It isn’t doing an initial public offering but instead a novel model called a direct stock listing — but let’s forget about the mechanics for now and consider its prospects.
On the surface, it looks like a tough road for Spotify. The company is beset by wealthy competitors, is losing tons of money, and its business model does not offer an obvious path to huge profits.
But it has one thing going for it, and it’s huge: Spotify is excellent at what it does. None of its competitors match its pace of innovation and its wide cross-platform functionality. And although many musicians remain suspicious of Spotify, it offers the best path forward for the industry — a chance to thrive outside the cross hairs of Apple, Google, Amazon and Facebook.
Spotify’s filings suggest strong growth. The company has 159 million active users, 71 million of whom pay for a subscription to its ad-free service. Its revenue in 2017 was almost $5 billion, up 38.6 percent from the year before. But its losses also piled up; its operating loss was $461 million in 2017, up slightly from $426 million in 2016.
There’s a path here to success. Spotify’s grand theory is that as it grows, it can negotiate better rates with music labels, which then increases its chance of profitability. That’s happening — its gross margin is rising — but slowly. And it’s always going to have huge content costs; Spotify has to pay for music every time it’s streamed, whereas video streaming companies like Netflix usually pay for content just once.
But Spotify is worth rooting for. It’s one of few examples of a thriving consumer company that sits outside the clutches of large American tech firms. (It’s based in Sweden.) Its independence makes it great for consumers — Spotify works just about everywhere, from your iPhone to your Amazon Echo to your cheapo Android tablet. Because music streaming is all the company does, it has an incentive to keep improving its service; Spotify, I’ve noticed, adds excellent features faster than most of its bigger competitors add basic ones.
That’s the best reason to hope it survives.
Last month, I asked readers to send in ideas for tech stories they’d like to see covered in The Times. I expected to get a handful of responses; instead we were inundated with hundreds of thoughtful suggestions. And I read all of them! Thankfully, most of you were brief.
So, what would you like to see more of? A lot of things, it turns out.
Many people were interested in cryptocurrencies and the blockchains behind them. What did they want to know? The basics, really, like what’s the deal with cryptocurrencies, what is a blockchain and why is everybody suddenly talking about both? We actually have some great explainers by our Bitcoin reporter, Nathaniel Popper — and stay tuned for more.
There was also a lot of interest in “algorithmic bias,” the suspicion that the computers making so many decisions about our lives might not be fair or transparent. Readers were also interested in technologies for people who aren’t thought of as a natural audience for new tech — older people, for example, or people in rural areas. “Don’t overlook the folks who are being left behind,” said Michael Starks of Zionsville, Ind.
Many had concerns about security. They wondered if the cloud was really secure, and if there was anything they could do to make themselves safer online. That’s an area Times reporters are constantly digging into, but for now, the brief answer is: You’re never as safe as companies say you are.
Finally, there was an interest in up-and-coming tech, even tech that’s way out there. Important as they are, people are sick of hearing about Google, Facebook, Apple, Amazon and Twitter. They want to know about quantum computers, flying cars (oh, look, we got you covered there), any manner of robots and the start-ups behind them. And even beyond that: “All these billionaires, yet no one is making serious ground on time machines or teleportation?” asked one reader.
So, some news: This will be my last newsletter for a few months. Like my nemesis Mike Isaac, I’m going to write a book about my hobbyhorse — how Apple, Amazon, Facebook and Google are conquering the world.
When I get back, I hope they put me on the time travel beat. See you then!
Farhad Manjoo writes a weekly technology column called State of the Art. You can follow him on Twitter here: @fmanjoo.