Spotify, the Swedish audio streaming company, has now hit the 100 million mark in terms of paid users. With over 217 million overall users, almost 50% of the users are now on the premium membership, which is a huge boost to the company that is looking to overtake its competitors like Apple and Amazon music in terms of revenue.
This boost in numbers is also a result of Spotify launching itself in India in February. In just its first month, it had a million users from India and it doubled in April. However, the number of paid users from India is not a huge number. Spotify covers almost all of Europe and Americas, Australia, New Zealand and parts of Asia.
Image courtesy: Spotify
The startling fact is that even after so much expansion and hitting big numbers in the subscriber column, the company is facing repeated losses over the quarters. The company that started in 2006 is now in its 13th year but is yet to experience many substantial profits collectively. In the 2019 Q1, it suffered loss of a massive $ 158 Million. This will hit the company hard, given the huge profits it incurred in the last quarter of last year, standing at $ 442 Million. The only positive is that this loss is less than what the company suffered in the last year’s Q1- $ 188 Million.
However, many expected this loss because such things happen when a company expands. Spotify expanded its wings in a country like India with millions of users and therefore the company would be hoping to get huge returns soon enough. Spotify works on the same Freemium model just like another media platform, Hotstar, in India that is a huge success. Therefore, Spotify would be hoping to see success along similar lines soon enough. Trade analysts believe conversely, as they do not expect to see Spotify getting profits anytime soon, since they are aggressively looking to get a hold on the global music audience and in this expansion phase, it would be hard for them to gain profits like those that they expect.
Spotify’s CEO Daniel EK considers his company to be a small player in the market and hence hopes to see profits in the long run. However, given the fact that its direct rival, Apple, has less than quarter of Spotify’s users just shows how big Spotify has become over the years. Therefore, it is about time that Spotifiy comes up with profits to keep getting the funding for the expansion.
