Spotify Leak Hints at Development of In-car Music Player Device

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【Summary】The compact device was leaked (intentionally?) earlier this year to several customers, via an offer inside the official mobile app.

Michael Cheng    Apr 19, 2018 8:30 AM PT
Spotify Leak Hints at Development of In-car Music Player Device

Many tech companies are competing for space inside vehicles. Some are launching their own infotainment system for cars, such as Google's Android Auto and Apple's CarPlay platform. Other businesses are offering connected devices, which serve as an extension of services provided by the respective establishment. 

In the crowded music streaming services industry, Spotify could shake things up with the potential release of a portable in-car player. The device was leaked (intentionally?) earlier this year to several customers, via an offer inside the official mobile app.

In-car Player Rumors

The controversial leak is difficult to prove, due to multiple variations of the rumor. According to a handful of Spotify customers, a pop-up from the app showcased a small, circular gadget with physical buttons commonly found on mainstream music players (play, shuffle and track controls). Interestingly, some versions of the offer suggested the unit may not require connection to a mobile phone.

All of the offerings for the in-car player appeared in February. To date, the ad has not showed up on television, billboards, social media or the company's official website. According to individuals who saw the offer, the mysterious unit requires a monthly subscription, as well as options for mobile data.

In the company's support forums, several members asked about the device. However, moderators quickly dismissed such inquiries. It is important to highlight that Spotify is currently looking for professionals with hardware experience, which adds legitimacy to the rumor.

"Spotify has put out job listings for hardware projects, and the company is actively testing voice commands on its smartphone app. Conventional wisdom would point to Spotify building its own speaker in the vein of Apple's HomePod," explained Chris Welch from The Verge.

Competition in the music streaming niche is heating up, with Spotify leading the way. In 2017, it reported an impressive 60 million paying subscribers (10 million were added over the span of five months). On the other hand, tech giant Apple services 27 million subscribers (as of 2017).

Spotify IPO and Licensing Agreements

Valued at over $32 billion, Spotify is now a public company. Instead of taking the traditional IPO route, the tech brand opted to go with a direct listing. This allowed the initial stock price to be set based on supply and demand. Spotify also saved boatloads of money by foregoing costly underwriter fees associated with IPOs.

"Spotify is not raising capital, and our shareholders and employees have been free to buy and sell our stock for years," said Daniel Ek, CEO and co-founder of Spotify.

"This puts Spotify puts on a bigger stage, but doesn't change who we are, what we are about, or how we operate."

The company will likely use the money saved from the direct listing on future licensing agreements, which has been a critical part of the success of the business. A leaked 42-page contract between Sony Music Entertainment and Spotify, which was signed in 2011, revealed a whopping $42.5 million in advances.

Spotify also has licensing deals with Vivendi's Universal Music Group and Warner Music.

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