AfterDawn: News

Spotify surges past 70 million paying subscribers

More than 70 million users now pay a premium subscription fee for unlimited music streaming from Stockholm-based Spotify.

Spotify is the largest music streaming service in the world, fending off competition from Apple Inc. and from Amazon and others. The Apple Music service counts 30 million subscribers as of September, but its launch in June 2015 did not significantly impact Spotify as had been anticipated. Instead, Spotify has gone from strength to strength, rapidly adding millions of paying subscribers.



If you count Spotify users who stream for free on the ad-supported platform, then Spotify counts around 140 million active users.

Last year, Spotify was valued at around $19 billion and has started 2018 with a confidential filing with a confidential filing with the U.S. Securities and Exchange Commission (SEC) for an IPO. Spotify is targeting a direct listing at some point in Q1 2018.

Spotify is also the target of a $1.6 billion lawsuit from Wixen Music Publishing, alleging that the music streaming service failed to obtain necessary "mechanical licenses" for many songs in its catalog.

Written by: James Delahunty @ 5 Jan 2018 3:13

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• 4 comments

• hearme0

  This stupifies me.
  
  70 million subs multiplied by 10 bucks each per month is 700 million.
  
  WTF do they get 19 billion? Plus, it's a paid service so no ads i would assume to generate more income right?? I don't have any familiarity with any online music service.
  
  Inflated valuation just like Facebook, Instagram and dozens of others.
  
  Remember, Uber hasn't made a single solitary penny, totally unprofitable in every way, yet its value is way high.
  
  Total farce!

  5.1.2018 13:17 #1

• verice

  Originally posted by hearme0: This stupifies me.
  
  70 million subs multiplied by 10 bucks each per month is 700 million.
  
  WTF do they get 19 billion? Plus, it's a paid service so no ads i would assume to generate more income right?? I don't have any familiarity with any online music service.
  
  Inflated valuation just like Facebook, Instagram and dozens of others.
  
  Remember, Uber hasn't made a single solitary penny, totally unprofitable in every way, yet its value is way high.
  
  Total farce! You do need to multiply that $700m by 12 to get to a gross subscription revenue of $8.4b per year and also factor in their ad revenue from the other 70 million non-subscription users. Don't forget to take into account their profit (which is unknown from this article) as well. The valuation may not be as bad you think. Uber's valuation is crazy, especially considering, as you stated, they've yet to turn a profit.

  6.1.2018 12:32 #2

• hearme0

  Originally posted by verice: Originally posted by hearme0: This stupifies me.
  
  70 million subs multiplied by 10 bucks each per month is 700 million.
  
  WTF do they get 19 billion? Plus, it's a paid service so no ads i would assume to generate more income right?? I don't have any familiarity with any online music service.
  
  Inflated valuation just like Facebook, Instagram and dozens of others.
  
  Remember, Uber hasn't made a single solitary penny, totally unprofitable in every way, yet its value is way high.
  
  Total farce! You do need to multiply that $700m by 12 to get to a gross subscription revenue of $8.4b per year and also factor in their ad revenue from the other 70 million non-subscription users. Don't forget to take into account their profit (which is unknown from this article) as well. The valuation may not be as bad you think. Uber's valuation is crazy, especially considering, as you stated, they've yet to turn a profit.
  Interesting clarification and thanks.
  
  Forgot to account for entire year. Shame on my math. I have zero clue about anything regarding numbers on their ad revenue but it seems rather much to figure in 10bn in advertising. Again, these figures I don't know at all.

  9.1.2018 10:26 #3

• KillerBug

  As far as current profits, a lot of their paid users are students at half price. Also, they pay out $0.006 per song, and I think they announced the average is a bit more than that. I stream something like 300 hours a month. Most of my coworkers do the same, or more. Even assuming just 10 tracks per hour, that's $18 in royalties from a $5-$10 subscription.
  
  I realize I might be a heavy user, but most everyone around me uses spotify the same way.
  
  If we assume that operating fees are $2 a month per user (probably higher), and that the average sub fee is $9 a month per subscriber across the whole service (it's probably less), that leaves $7 a month for license fees and profit. So if someone streams 40 tracks a day, they start losing money...and that's assuming the best for everything. Does the average user actually stream less than that, even including people like me in the average?

  9.1.2018 20:57 #4