Spotify on Thursday stated it now has greater than 140 million international monthly active customers. Mixed with the admission that it had 50 million paid subscribers again in March, it’s secure to infer that round 90 million or so of its listeners make the most of the free tier.
In a separate monetary submitting, it was revealed that Spotify’s income for 2016 totaled almost $three.three billion. Whereas that will sound spectacular at first look, one should additionally think about that Spotify’s “price of income” was simply over $2.75 billion which leaves a gross revenue of simply north of $500 million.
Whereas not specified, the “price of income” is referring to the royalties that Spotify should pay music rights homeowners in alternate for utilizing their work.
Think about product growth, gross sales, advertising and basic administrative prices, nonetheless, and you find yourself with an working lack of $389 million.
On a brighter be aware, the streaming music big stated its promoting gross sales revenues elevated 50.three p.c year-over-year from 2015 to 2016.
Spotify in April signed offers with Common Music Group and indie label Merlin that enable artists to maintain their new albums off the free streaming tier for a interval of as much as two weeks after launch. This clause, together with different points of the offers, ought to assist Spotify generate a bit extra income transferring ahead. Comparable offers with Sony and Warner (which have not but been signed) ought to solely assist the trigger though it may nonetheless be some time earlier than the corporate turns a revenue.