With music streaming not slowing down on its conquest to revolutionize the way we consume music, is the same to say about the companies that are leading the change?
For Spotify, it looks like yes. The Swedish streaming giant has seen an overall increase in quarterly revenue since its foundation by CEO Daniel Ek in 2006. In the final quarter of 2022, the company accumulated a revenue of 3.2 billion euros which only slightly fell to three billion in the first quarter of 2023. This number is also reflected in the ever-increasing number of subscribers, rising from 205 million paying subscribers in the Q4 of 2022 to 210 in the following quarter. The annual revenue also reached the highest number so far in 2022, with the company generating a whooping 11 million euros, reflecting the streaming site’s dominance on the music streaming market.
Why is Spotify struiggling with operating loss?
Despite the obvious success of the Stockholm-based streaming service, the company has reported major operating loss in the last six quarters, starting in the final quarter of 2021. While in the last quarter of 2021, this loss only amounted to seven million euros, the loss reached an astonishing 156 million euros in the first quarter of 2023. So far, Spotify has argued that this loss is due to large investments into their platform but also due to buying companies such as smaller podcast providers. The company also choose to spend an increasing amount of money on their research and development, namely a total of 1.39 million euros in 2022. However, while the operating loss is quite substantial, Spotify is still making a significant gross profit, in 2022 alone a total of 2.9 million euros.
Revenue of Spotify worldwide from 1st quarter 2016 to 1st quarter 2023
(in million euros)
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Spotify. (September 21, 2023). Revenue of Spotify worldwide from 1st quarter 2016 to 1st quarter 2023 (in million euros) [Graph]. In Statista. Retrieved December 10, 2023, from https://www.statista.com/statistics/813828/spotify-revenue-quarterly/
Spotify. "Revenue of Spotify worldwide from 1st quarter 2016 to 1st quarter 2023 (in million euros)." Chart. September 21, 2023. Statista. Accessed December 10, 2023. https://www.statista.com/statistics/813828/spotify-revenue-quarterly/
Spotify. (2023). Revenue of Spotify worldwide from 1st quarter 2016 to 1st quarter 2023 (in million euros). Statista. Statista Inc.. Accessed: December 10, 2023. https://www.statista.com/statistics/813828/spotify-revenue-quarterly/
Spotify. "Revenue of Spotify Worldwide from 1st Quarter 2016 to 1st Quarter 2023 (in Million Euros)." Statista, Statista Inc., 21 Sep 2023, https://www.statista.com/statistics/813828/spotify-revenue-quarterly/
Spotify, Revenue of Spotify worldwide from 1st quarter 2016 to 1st quarter 2023 (in million euros) Statista, https://www.statista.com/statistics/813828/spotify-revenue-quarterly/ (last visited December 10, 2023)
Revenue of Spotify worldwide from 1st quarter 2016 to 1st quarter 2023 (in million euros) [Graph], Spotify, September 21, 2023. [Online]. Available: https://www.statista.com/statistics/813828/spotify-revenue-quarterly/