Spotify Lost Millions of Dollars in 2009, US Launch Might Help
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Spotify Lost Millions of Dollars in 2009, US Launch Might Help

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Spotify Lost Millions of Dollars in 2009, US Launch Might Help

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Nombre de lectures 97
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22 November 2010
Spotify UK recorded
loss of $26.7 million for
2009
Spotify
By: Giorgiana Bursuc, Windows Editor
Spotify Lost Millions of Dollars in 2009, US Launch Might Help
Spotify, one of the most popular music streaming services in Europe, is constantly
attracting new members from the seven countries it currently supports. However, it seems
that financially the company is not as prosperous as it might seem.
Spotify
can only be enjoyed in Finland, France, Norway, Netherlands, Spain, Sweden and
the United Kingdom, and this restriction means that inhabitants of other countries do not
have access to it.
The consequence is that the sources of revenue are limited, and even though, according to
a recently published
report
, the company's revenue for UK for the past year was $ 18.1
million, it actually translates in a net loss of $26.7 million, because of all the expenses, sales
and distribution.
In an attempt to minimize the significance of this financial report, a Spotify spokesperson
said: "2009 saw us focus on establishing a new and innovative music service and bringing it
to millions of people across
Europe
."
" The groundwork laid in our launch year has been crucial to the significant achievements
made in 2010. Further strengthening and expansion of the service remains our top priority,"
it was added.
Indeed, 2009 was a very profitable year for Spotify in terms of attracting members: at the
beginning of the year it had about one million listed users, and the number got to seven
million by the end of 2009, out of which more than 250,000 were paying subscriptions.
Truth be told, this rhythm has decreased during 2010, since Spotify has only recently
announced passing the
10 million users
threshold. In June, the company revealed that it
had more than 500,000 subscribers in the seven countries.
Despite still being popular and constantly attracting new users, it appears that Spotify is not
a very profitable company, at least judging by the numbers presented in the UK report.
Considering that a large part of Spotify's revenue goes to rightsholders, maybe a US launch
will help the company get more subscribers, therefore more money.
On the other hand, a new market always comes with increased costs and investments, so
this launch might prove to be a double-edged sword if it is not managed wisely.
In the end, users all over the world would surely rejoice if given the chance to access the
large array of features Spotify has to offer, so
US music enthusiasts
will definitely not pass
the opportunity to evaluate this streaming service - and be willing to pay for it, if it rises up to
their expectations.
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