Spotify 2013 Operating Loss Widens, Revenue Rises
The music streaming service continued to spend on its global expansion, product development and marketing
Music streaming service Spotify late on Tuesday reported a wider operating loss for 2013 despite higher revenue amid continued spending on its global expansion.
The Swedish company, led by CEO Daniel Ek, ended 2013 with 36 million active users, with more than 8 million of them being paying subscribers. Since then, it has grown to 50 million active users, with 12.5 million paying subscribers, the company said recently.
Amid continued investment in expansion, as well as marketing and product development, the privately held company's operating loss for 2013 amounted to $116 million (€93.1 million). That compared with just less than $100 million (€80 million) in 2012. The Guardian reported the financials, which were disclosed in Luxembourg.
Its after-tax net loss, though, fell from $109 million (€86.7 million) in 2012 to $72 million (€57.8 million), helped by $48.2 million (€38.7 million) in “fair value gains" in the value of stock options. Spotify’s 2013 revenue jumped 73.6 percent to $930.8 million (€746.9 million).
The financial update covered Spotify's worldwide business. The music streamer recently reported profits for its operations in the U.K. and France.
“We believe that music has mass market appeal — and as such, we believe we are just at the beginning of a much larger market opportunity," The Guardian quoted Spotify's letter to shareholders that came with its results as saying. "We believe our model supports profitability at scale."
It added: "We have already proven that we’ve created real value for our users, and we know that the more time people spend with our product, the more likely they are to become paying subscribers. We believe that we will generate substantial revenues as our reach expands, and that, at scale, our margins will improve.”
Spotify also said that its subscriber growth has been faster in the most recent quarter than at any point in its history. The company has been in the headlines recently because Taylor Swift removed her entire song catalog from Spotify.
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