Despite increasing losses, Spotify struggles for the future of free streaming.
From year to year the streaming service Spotify suffers losses. At the same time, the company's revenue is growing rapidly. So, in 2014, Spotify's revenue amounted to $ 1.3 billion, which is 45% higher than the result of the previous year. At the same time, its net losses in 2014 increased from $ 68 million to $ 197 million. The company announced this on Friday, May 7th.
Nevertheless, the number of Spotify employees in 2014 increased from 958 to 1,354. The service is available in 58 countries of the world. Users are offered 30 million songs and two subscription options: free listening with mandatory viewing of advertising or a subscription for $ 10 and listening without advertising.
As of the end of 2014, the number of paid subscribers to the service was 15 million, and the number of free subscribers was 45 million. Thus, Spotify has become the most popular streaming service for listening to music, reports The New York Times. The company earns 91% of its revenue from subscriptions and only 9% from advertising.
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However, the possibility of free listening to music is the subject of much controversy. Over the past few months, top managers of major record labels have come out with harsh criticism of this. Ostensibly the possibility of free streaming is the main reason that the service incurs losses. Such a situation may complicate Spotify's relationship with music labels and become an obstacle to the renewal of the license agreement with them. Last fall, Spotify CEO Daniel Eck said that since its inception (2008), the company has spent $ 2 billion on license fees.
According to representatives of Spotify, the possibility of free listening is an important tool to attract new users. After all, some of them subsequently begin to use paid options.
The main competitors of Spotify are Deezer and Rhapsody services. In addition, next month, Apple plans to launch its streaming service. The position of Apple's leadership on free streaming for strange reasons coincides with the critical position of the record companies.
To survive, Spotify began to negotiate with media holdings, broadcasting networks, and video content publishers. Sources familiar with the negotiations believe that Spotify will soon offer users a new feature - video streaming. This assumption is supported by the fact that the company has declared its readiness to report the latest news to the press. A meeting with media representatives is scheduled for May 20.
Megamind already wrote that another significant event could be a Spotify deal with investors Goldman Sachs, the Abu Dhabi National Welfare Fund and some others. It is assumed that the size of the investment will be $ 400 million. If the deal goes through, Spotify’s valuation will exceed $ 8 billion.
Nevertheless, the number of Spotify employees in 2014 increased from 958 to 1,354. The service is available in 58 countries of the world. Users are offered 30 million songs and two subscription options: free listening with mandatory viewing of advertising or a subscription for $ 10 and listening without advertising.
As of the end of 2014, the number of paid subscribers to the service was 15 million, and the number of free subscribers was 45 million. Thus, Spotify has become the most popular streaming service for listening to music, reports The New York Times. The company earns 91% of its revenue from subscriptions and only 9% from advertising.
')
However, the possibility of free listening to music is the subject of much controversy. Over the past few months, top managers of major record labels have come out with harsh criticism of this. Ostensibly the possibility of free streaming is the main reason that the service incurs losses. Such a situation may complicate Spotify's relationship with music labels and become an obstacle to the renewal of the license agreement with them. Last fall, Spotify CEO Daniel Eck said that since its inception (2008), the company has spent $ 2 billion on license fees.
According to representatives of Spotify, the possibility of free listening is an important tool to attract new users. After all, some of them subsequently begin to use paid options.
The main competitors of Spotify are Deezer and Rhapsody services. In addition, next month, Apple plans to launch its streaming service. The position of Apple's leadership on free streaming for strange reasons coincides with the critical position of the record companies.
To survive, Spotify began to negotiate with media holdings, broadcasting networks, and video content publishers. Sources familiar with the negotiations believe that Spotify will soon offer users a new feature - video streaming. This assumption is supported by the fact that the company has declared its readiness to report the latest news to the press. A meeting with media representatives is scheduled for May 20.
Megamind already wrote that another significant event could be a Spotify deal with investors Goldman Sachs, the Abu Dhabi National Welfare Fund and some others. It is assumed that the size of the investment will be $ 400 million. If the deal goes through, Spotify’s valuation will exceed $ 8 billion.
Source: https://habr.com/ru/post/290452/
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