Spotify, the largest streaming service in the world, is struggling to earn revenue
With Spotify‘s recent debut on Wall Street earlier this year, the streaming service just can’t get a break. Spotify holds such a large marketshare for the music industry, especially for streaming, that the industry is nearly dependent on its success.
The company revealed its Q2 reports for stockholders on Thursday, July 26. The reports were just not reassuring enough to garner a positive, hopeful outlook.
Spotify lost double in Q2 for 2018 than it did in 2017’s Q2
The company shared a net loss of $461.4 million. This is double what it lost in Q2 of last year. The operating loss came in at $105.7 million, 14 percent more than last year’s Q2 losses. The 14 percent higher operating costs loss was due to the expenses for the New York Stock Exchange and a “high-than-expected accrued social costs,” according to Rolling Stone.
The company has never been profitable, even when it launched
With Spotify’s launch back in 2008, the company has never seen a profit. However, stockholders and executives are remaining hopeful. They’re hoping that the streaming service can become profitable when it has enough people sign-up (and pay) for the service. In addition, Spotify has high royalty payouts for artists. Some people, however, such as Elon Musk, would strongly disagree.
According to Billboard, “This year, the label per-stream rate has fallen to about $0.0048, or $4.80 per 1,000 streams. On the other hand, its per-stream rate for its ad-supported tier to labels has risen from $0.0017 — or $1.70 per 1,000 streams — to $0.0018, or $1.80 per 1,000 streams.”
Spotify now boasts 180 million monthly active users
The Swedish streaming company finished the 2018 Q2 with 180 million monthly active users. Furthermore, it’s projecting to finish Q3 with 193 million monthly active users, according to Rolling Stone. Paying subscribers sit at a cool 83 million, which makes up roughly 40 percent of the yearly growth. The free, ad-supported tier grew to 101 million, making up 23 percent of the company’s yearly growth.
