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Published: Sun, June 18, 2017
Culture | By Antonia Gonzales

Spotify loss widens ahead of potential stock market listing

Spotify loss widens ahead of potential stock market listing

"It's an exciting time for our Spotify global advertising business".

Sales jumped 52 per cent to €2.93 billion in 2016, but the net loss more than doubled, according to documents filed yesterday in Luxembourg.

Spotify has posted a huge net loss of €539.2 million in 2016. Combined with the admission that it had 50 million paid subscribers back in March, it's safe to deduce that around 90 million or so of its listeners utilize the free tier.

As it marches toward a potential listing on the New York Stock Exchange next year, Spotify continues to solidify its position as the market's preeminent music streaming service. That's a 50 percent jump in revenue year-over-year. While Apple has the valuable piece of screen real estate that is the iOS homescreen, Spotify fans tend to be extremely loyal and Apple Music hasn't yet offered those users a compelling reason to make the switch. Since users are not buying albums most of the time, these days, this is how artists get paid for making music.

Spotify is now hoping to strike deals with Sony Music and Warner Music in the run-up to a market listing, a source close to the matter said in May. The company revealed that it has 140 million monthly users on Thursday, up from 126 million at the end of 2016. "The increase over our operating loss primarily relates to the cost of debt and the impact of foreign exchange rates on our debts and investments". That put Spotify's pre-IPO total cash intake at $2.56 billion.

The company said it corrected errors on prior accounting statements to adjust for charges on credit cards, payment processing issues, understatements on royalties, and incorrect calculations for management bonuses.

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