spotifysmalllogoSpotify today filed to go public and plans to begin trading on the New York Stock Exchange under the name SPOT, reports CNBC. Shares of the company have privately traded as high as $132.50, giving the company a valuation of ~$23 billion based on ordinary shares traded in private transactions.

According to Spotify's filing with the SEC, the streaming music service boasts 159 million monthly active users and 71 million premium subscribers as of December 31, 2017, which Spotify claims is "nearly double the scale" of its closest competitor, Apple Music.

As of the last update at the beginning of February, Apple Music boasted 36 million paying subscribers.

Spotify says its number of premium subscribers has grown 46 percent year over year, and its monthly active users has grown 29 percent year over year. The company earned $2.37 billion in 2015, $3.6 billion in 2016, and $4.99 billion in 2017, but posted a loss of $1.5 billion in 2017.

Spotify also says it is able to draw consumers because it provides "unique data" for a differentiated and personalized experience.

Many music services have large catalogs, but we believe Spotify is differentiated from other services because we provide Users with a more personalized experience, driven by powerful music search and discovery engines. We have a large and growing base of Users that are highly engaged on Spotify, which enables us to continuously learn about their listening behaviors throughout the day.

We use this information to create a more personalized and engaging experience for each incremental visit to our platform. We believe this personalized experience is a key competitive advantage as Users are more likely to engage with a platform that reflects their real-time moods and activities and captures a unique understanding of moments in their lives.

Going forward, Spotify plans to grow its business by heavily investing in research and development, further penetrating into existing markets, entering new geographies, continuing to invest in its advertising business, and expanding non-music content.

Spotify is going public through a direct listing, which means the company did not hire an underwriter and thus there is no set opening price for Spotify shares.

Tag: Spotify

Top Rated Comments

Michael Scrip Avatar
55 months ago
"but posted a loss of $1.5 billion in 2017" - don't get it - the losses will continue to mount as the licensing costs continue to soar - this is the textbook definition of a money losing business.
Exactly.

Spotify seems to have a startup mentality - "just get users and we'll figure out how to make money later"

The problem is... they've been around for a decade... have tons of users and plenty of money coming in... yet their costs keep skyrocketing.

They literally spend more than they make. And they have to spend more as they get more users.

This is a different situation than say, Facebook, where they eventually settled into a position to make money. Facebook makes money on advertising from eyeballs and pageviews. That's an appropriate business model for this type of company. The more users Facebook has... the more money they make.

But it's the opposite for Spotify. More users actually costs them more money.

It's been suggested that Spotify get rid of their free tier... as that may be the reason they lose so much money.

But that would instantly cut their userbase in half. Investors surely wouldn't like that. (after all... users are what these "startup" companies are all about, right?)

This will be interesting to watch. I'm glad I'm not making their decisions!
Score: 9 Votes (Like | Disagree)
tentales Avatar
55 months ago
I loathe Spotify, but it’s common for new companies (even at Spotify’s age given its scale) to hemorrhage cash. This is…kind of a really extreme case, though.
Extreme? What makes it so ?

Spotify is like the early Amazon, they wrote big red-ink until 2009. In a crowded market, the only way to dominate is to go thru an extended period of losses. Lots of investment from deep pockets in it for the long-haul.

What's unfortunately missing from this MR piece, is that the 2017 loss was largely due to their 1 time expense of gaining access to the Chinese market with their $1billion stock swap deal with Tencent and their entertainment division TME.
It's not a simple user-growth-loss story, but an overall market expansion story. I'd say they'll write profits by 2019-2020.

Not sure why you "loathe" Spotify. Zealous AM fan ?

For those of you rooting for Spotify to fail, be aware, that less competition generally means higher prices once a monopoly is established and then what would you complain about ?

MR's become a cesspool of whiners and blind Apple zealots.
Score: 8 Votes (Like | Disagree)
Red Oak Avatar
55 months ago
Losses have increased as premium subscribers have increased

I can't wait to short the hell out of this
Score: 8 Votes (Like | Disagree)
firewire9000 Avatar
55 months ago
After ten years with Spotify premium I switched to Apple Music and I couldn’t be more happier. Asking to Siri for songs or playlists is superb. I was reluctant at first because I like the Spotify app but finally was because I’m used to not because it’s a better interface per se. I like the Apple Music’s interface and the curated playlists. I used SongShift to migrate all of my playlists yo AM and it worked flawlessly.
Score: 8 Votes (Like | Disagree)
Bawstun Avatar
55 months ago
After ten years with Spotify premium I switched to Apple Music and I couldn’t be more happier. Asking to Siri for songs or playlists it’s superb. I was reluctant at first because I like the Spotify app but finally was because I’m used to not because it’s a better interface per se. I like the Apple Music’s interface and the curated playlists. I used SongShift to migrate all of my playlists yo AM and it worked flawlessly.
This has to be a joke. Or you’re some kind of Apple employee. Spotify is many times better than AM.
[doublepost=1519854298][/doublepost]
A company that takes in $XXX but still manages to lose $YYY overall is not a profitable company. Who the hell would invest in that?!?

FYI MacRumors—can you post how much they lost in 2015 and 2016 as well.
they’re profitable. Ultimately they’ll have a monopoly on streaming and probably reach 50bn in revenue someday. It takes time to build the infrastructure until they become profitable. It’s all about growth race right now - all their money is going into beating the default installed Apple Music and others.
[doublepost=1519854406][/doublepost]
I just finished the 3 months for $.99 promo and canceled at the end. I find the interface very cluttered and the recommendations worse than Pandora. It’s a “fine” service but I don’t really get the huge following it has as compared to Apple Music or pandora premium.
Did you frequent the Discover Weekly playlist? Or the “Release Radar”? Their algorithms are literally hundreds of times better at suggesting music than any other company out there, and I’m willing to bet a significant amount of their money went to AI research. You sound like a paid AM employee as well.
Score: 7 Votes (Like | Disagree)
CarpalMac Avatar
55 months ago
More like IP-oh no, we’re hemorrhaging cash!
"Profits? Who the hell wants those?!" - Snap Inc.
Score: 4 Votes (Like | Disagree)

Popular Stories

iOS 16 mock for article

Gurman: iOS 16 to Include New Ways of System Interaction and 'Fresh Apple Apps'

Sunday May 15, 2022 6:14 am PDT by
iOS 16 will include new ways of interacting with the system and some "fresh Apple apps," Bloomberg's Mark Gurman has said, offering some more detail on what Apple has in store for the upcoming release of iOS and iPadOS set to be announced in a few weeks at WWDC. In the latest edition of his Power On newsletter, Gurman wrote that while iOS 16 is not likely to introduce a major face-lift to...
maxresdefault

Unbox Therapy Shares Hands-On Look at iPhone 14 Pro Max Replica

Monday May 16, 2022 4:40 am PDT by
YouTuber Unbox Therapy has shared a hands-on look at the iPhone 14 Pro Max using what he claims is a one-to-one replica created by third-party case makers with access to detailed schematics and dimensions for Apple's new upcoming flagship smartphone. As with the iPhone 13 Pro lineup, in 2022, we are expecting a 6.1-inch iPhone 14 Pro and a 6.7-inch iPhone 14 Pro Max, but this time the Pro...
RIP iPod Feature

RIP iPod: A Look Back at Apple's Iconic Music Player Over the Years

Friday May 13, 2022 2:25 pm PDT by
Apple earlier this week announced the discontinuation of the iPod touch, and because it was the last iPod still available for purchase, its sunsetting effectively marks the end of the entire iPod lineup. To send the iPod on its way, we thought it would be fun to take a look back at some of the most notable iPod releases over the last 21 years. Original iPod (2001) Introduced in October...
macOS Monterey 2

Apple Releases macOS Monterey 12.4 With Support for Studio Display Webcam Update

Monday May 16, 2022 10:10 am PDT by
Apple today released macOS Monterey 12.4, the fourth major update to the macOS Monterey operating system that launched in October 2021. macOS Monterey 12.4 comes over two months after the launch of macOS Monterey 12.3, an update that added Universal Control. The ‌‌‌‌‌macOS Monterey‌‌ 12.4 update can be downloaded on all eligible Macs using the Software Update section of System...
iOS 15

Apple Releases iOS 15.5 and iPadOS 15.5 With Wallet and Podcast Updates

Monday May 16, 2022 10:00 am PDT by
Apple today released iOS 15.5 and iPadOS 15.5, the fifth major updates to the iOS and iPadOS 15 operating systems that were initially released in September 2021. iOS and iPadOS 15.5 come a little over two months after the launch of iOS 15.4 and iPadOS 15.4. The iOS 15.5 and iPadOS 15.5 updates can be downloaded for free and the software is available on all eligible devices over-the-air in...
airpodsprodesign

Kuo: AirPods, MagSafe Battery Pack, and Other Apple Accessories Also to Switch to USB-C in Future

Sunday May 15, 2022 5:59 am PDT by
Earlier this week, well-known Apple analyst Ming-Chi Kuo claimed that Apple plans to release at least one iPhone 15 model with a USB-C port in 2023. Now, in a follow-up tweet, he has claimed that accessories like AirPods, the MagSafe Battery Pack, and the Magic Keyboard/Mouse/Trackpad trio would also switch to USB-C in the "foreseeable future." Both the iPhone and all of the aforementioned...
apple tv 4k design green

Apple Releases tvOS 15.5 for Apple TV HD and Apple TV 4K

Monday May 16, 2022 9:57 am PDT by
Apple today released tvOS 15.5, the fifth major update to the tvOS operating system that first launched in September 2021. tvOS 15.5 comes more than two months after the release of tvOS 15.4, an update that brought support for captive WiFi networks. tvOS 15.5 can be downloaded over the air on the Apple TV through the Settings app by going to System > Software Update. ‌‌‌‌‌‌Apple...