Spotify Projects Shrinking Losses, Nearly 100 Million Subscribers By Year's End

27 Marcha, 2018, 00:37 | Author: Misty Newman
  • Spotify Projects Shrinking Losses, Nearly 100 Million Subscribers By Year's End

The platform has 38 million paying subscribers which is just over half of Spotify's paying users.

The company made its predictions in a regulatory filing ahead of its plan to start publicly trading shares next week. However, that forecast would miss the nearly-40 percent growth that the company recorded in 2017, compared to the previous year.

Only days ahead of its New York Stock Exchange debut, the Swedish music giant said revenues were projected to rise between 20 and 30 percent in 2018 to between 4.9 and 5.3 billion euros (R71-billion and R76.8-billion) compared with growth of 38 percent a year ago and 53 percent in 2016.

Spotify has been in a bit of a fight lately with people using modded apps to get premium features (like no ads) for free on the music streaming service.

Spotify founder and CEO Daniel Ek has said repeatedly that the service's tough business model needs scale to become profitable. It had 157 million active users as of the end of 2017, of which 71 million were paying for the ad-free versions of the service.

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Spotify enjoys an advantage thanks to its free, ad-supported tier, which is unique among streaming services such as Apple Music, Amazon, Google and Tidal. This would represent a 36-percent increase, and revenue could rise 30 percent to $6.6 billion over the same time period, according to Spotify's guidance.

Operating losses for the full year should not cut as deep as 2017, the company said, amounting to a projected €230 million-€330 million ($286 million-$410 million), which would mark an improvement over 2017 when debt financing charges contributed to losses of €378 million ($470 million). That remains well off its long-term target of 30 to 35 percent.

Notably, Spotify has no more outstanding debt, thanks to a deal that saw two of its shareholders, TPG and Dragoneer, convert their debt into equity and sell their shares to new Spotify investor Tencent.

Spotify planned for direct listing on NYSE on April 3.

Spotify are about to float the company on the New York Stock Exchange hence the assessment of users.



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