1.
Image via Spotify
Last year, Spotify worked to nearly double their revenue. However, the increase in royalty payments has hit the company with a large amount of net losses. According to the Wall Street Journal, Spotify’s revenue saw 81% increases from the previous year—growing to a whopping €1.95 billion (about $2.17 billion) in 2015. Yet, the calculated losses came in around €173.1 million (over $192 million).
At a short glance, it is clear to see that Spotify isn’t making much profit as yet—at least not in the margin they would expect. But the company seems to be a firm believer in spending money to make money. Though the increase of royalty payments to artists and labels may seemingly be holding them back, Spotify continues to see increasing revenue from their rapidly growing amount of paid subscribers. Since Apple Music’s launch last June, Spotify has welcomed more than 10 million new paying subscribers.
Along with revenue from subscriptions, advertisements for the non-paying audience has helped increase profits by more than $100 million within the last year. The company is already looking to broaden their horizons even further in hopes of seeing more profit in the near future.
A legal filing from the company states that Spotify expects to “make substantial revenue” as they continue to expand their international reach. This new plan will involve spending money from outside investors in order to bring in larger amounts of profit.
