(Hypebot) – 80% revenue growth would be cause for celebration at almost any company. But Spotify isn't just any company. Growth means greater expenses for the music streamer and last year, which they are calling their "best year ever," Spotify suffered a $194 million loss while paying 84% of total revenue to the music industry.
The Highlights
Analysis
Here's how Spotify see its future, according to the financial report filed in Luxemborg: "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… 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."
It is true that these financials, first reported by MBW, are generally good news for Spotify. But they are bad news for a music industry hoping to extract higher payments from the music streamer.
Losses of less that 10% of total revenue point to a more hopeful future for the company. But if 84% of total revenue is already being paid to rights holders, how can Spotify be expected to pay more?