Report: Spotify Revenues Top $2 Billion In 2015, Losses Hit $194 Million
May 23, 2016 at 2:06 PM (PT)
SPOTIFY revenue topped $2 billion in 2015, but losses remain a staggering $194 million, according to a report in MUSICBUSINESSWEEKLY, who uncovered a financial filing in LUXEMBOURG that called 2015 "its best year ever."
SPOTIFY's income was up 80%, while its losses widened by 6.7% compared to 2014.
Advertising revenues nearly doubled in the 12 months, up 98% to $219m, while subscription revenues grew by a slightly slower pace, up 78% to $1.95bn.
In terms of SPOTIFY’s total $2bn+ income, ads therefore claimed 10.1% – an improvement on the 9.2% share seen in 2014, but another reminder of how heavily the company relies on people paying for premium accounts.
SPOTIFY’s payouts to the music industry hit $1.83bn in 2015 – up 85% year-on-year.
That translates to 84% of SPOTIFY’s total income last year was returned to the music industry, or to facilitate its payment to the music industry.
SPOTIFY's total active user base increased from 60 million at the end of 2014 to 89m at the end of 2015. Of these active users, over 28m were paid subscribers at the close of last year.
Considering the IFPI pegged the total number of paying audio music subscribers around the world in 2015 at 68m, that means SPOTIFY was responsible for over 41% of them.
“Music has mass market appeal – and, as such, we believe we are just at the beginning of a much larger market opportunity, benefiting from significant first mover advantages,” said the firm’s annual filing. “Subscription-only models have not yet proven scale and free user models, while scaling, have not proven a path to profitability. SPOTIFY has the combined power of both.”
The company also revealed that its "Discover Weekly" playlist delivered 3bn streams last year.
The company paid $9.4m for SEEDSCIENTIFIC, the audience intelligence platform it acquired in JUNE last year.
In its annual filing, SPOTIFY called itself: “The No.1 pure play music service – the second largest revenue source to the music industry, both globally and the U.S.”
It also issued an ominous aside: “”If we cannot maintain SPOTIFY’s culture as we grow, we could lose the innovation, teamwork and focus that contribute crucially to our business.”