The Swedish streaming music service Spotify worked at a loss for many years and made absolutely no profits to its owners. But in 2019, the Spotify administration revealed some data on the company’s financial situation. She announced that a popular streaming platform, 13 years after its founding, was finally making money.
Spotify has two main sources of revenue: advertising revenues and subscriptions.
With about 150 million paid subscribers worldwide, the administration says more than 90% of Spotify’s revenue comes from premium subscriptions. The rest is advertising money.
What’s interesting here is that Spotify distributes much of its revenue to artists, singers, publishers, record companies and other stakeholders in the creative process.
In 2020, Spotify reached a $100 million deal with the podcasting’s most renowned name, Joe Rogan, to transfer his popular series The Joe Rogan «Experience to the platform». In addition to everything, the company recently obtained the rights to launch Michelle Obama’s podcast.
Thus, despite the poor financial performance, the Spotify music streaming service is still in high demand and in the coming years the industry will only grow and grow.
Spotify rarely publishes information on its financial results. Music market analysts estimate that the service now has a loss, despite some economic recovery in 2019 and the first half of 2020. But investors continue to support the work and development of this popular music broadcasting platform and, indeed, the world’s largest.
With the global pandemic, Spotify’s financial situation has worsened because most members of the music industry have started making music because it is not possible to make concerts to the public. And the service pays them royalties that ruin it.