(Hypebot) – Spotify released its 2013 financial report which showed both rapidly growing revenue and significant net losses. Revenue grew 73% from 2012’s €430.3 to €746.9 million or $931 million USD last year. But losses also rose 16% to $116 million in 2013. The new report covers global results for all territories including the UK and France, both whom recently reported that their global operations were in the black.
One bright spot is that Spotfy's “cost of revenue” (mostly royalties paid to rights holders) fell from 90.5% of revenue in 2012 to 82.5% of revenue in 2013.
"We believe that music has mass market appeal – and as such, we believe we are just at the beginning of a much larger market opportunity. We believe our model supports profitability at scale,” Spotify said in a letter tho shareholders first reported by The Guardian. “ We have already proven that we’ve created real value for our users, and we know that the more time people spend with our product, the more likely they are to become paying subscribers. We believe that we will generate substantial revenues as our reach expands, and that, at scale, our margins will improve.”