Spotify losses widen as costs and subscribers increase - ET BrandEquity (2024)

FAQs

Is Spotify suffering losses? ›

In 2023, Spotify suffered a net loss of 532 million euros. Whilst the company has been operating at a loss since its inception, the 2023 figure is an increase in net loss from those reported between 2020 and 2022.

Why does Spotify still lose a lot of money despite having millions of subscribers? The short answer is Spotify is spending more than it is making. Here's a few reasons: Spotify pays about 70% of its revenue to labels.

The company has recently expanded beyond music to stay ahead, but has struggled to make money. WSJ music industry reporter, Anne Steele, tells us about Spotify's plans for profitability and how they could impact the streaming business.

Spotify on Tuesday said it lost less money than it was anticipating in the final quarter of 2023, in its latest sunny earnings report. Why it matters: For years, investors punished the audio giant for expensive investments in podcasting and a bloated staff that ate into its margins.

Spotify faces particular scrutiny due to its free service tier, which allows users to listen free with advertisem*nts between tracks. The tier has led to a variety of major album releases being delayed or withdrawn from the service.

Spotify increased premium subscriber numbers by 4% quarter on quarter to 236 million in the final three months of the year, an increase of 10 million, making for a record year of 31 million new subscribers.

Just days after people gleefully posted their Spotify Wrapped, bad news came for the music streaming giant. Spotify announced today that it would cut 17 percent of its workforce, a chunk that equates to an estimated 1,500 people. It's the third time the world's largest music streamer has cut jobs this year.

Although most music stocks gained value this week, Spotify dropped 4.6% to $302.27 despite the U.S. markets surging to record heights and two new analyst reports that indicated the company's share price has much room for improvement.

Spotify is unprofitable. Specifically, in Q4 2023, the company reported a net loss of 36 cents per share. Granted, this result beat Wall Street's prediction that Spotify would lose 40 cents per share.

Spotify has seen consistent quarter-on-quarter growth of its active user base since 2015. In fact, Spotify has added 193 million monthly active users over the last two years (Q1 2022 – Q1 2024).

Has Spotify ever made a profit? ›

Spotify's emergence in 2006 demonstrated that it was possible to monetise streaming in a way that was both legal and attractive to music lovers. Eighteen years on and Spotify has just turned its largest quarterly gross profit – more than a billion euros (£859 million) in the three months to the end of March.