Royalties and costs send Spotify's losses spiralling to £16.6m
Tuesday 23 November 2010
Spotify, the music streaming business that provide listeners with an alternative to piracy, saw losses soar to £16.6m in its latest financial results.
Despite a rise in sales of advertising and subscriptions, the group reported that losses had spiralled in 2009, from £316,000 a year earlier. This was because of a huge rise in royalty payments and a hike in administration expenses. A spokeswoman said the company had focused on establishing the service and increasing the number of users last year.
"The groundwork laid in our launch year has been crucial to the significant achievements made in 2010. Further strengthening and expansion of the service remains our top priority," she added. The company is in the late stages of preparing to launch in the US.
Spotify offers free streaming for those willing to listen to advertisments, as well as a £9.99 a month premium product. Advertising sales rose from just over £2,000 in its first year, to £4.5m in 2009, the results revealed. Subscriptions rose from £380,000 to £6.8m, but only 250,000 of its 7 million users paid for the service.
Yet, the group plunged further into the red as the cost of sales – the royalties – rose from almost £410,000 to £18.8m. Administrative expenses rose from £284,000 to £8.2m.
As the number of employees has increased from three to 23, the company's wagebill has risen from £88,000 to just over £1m.
- 1 Mario Balotelli: Staff at arson-hit Manchester Dogs' Home convinced Liverpool striker is behind five-figure donation
- 2 There is literally not a single woman in this iPhone 6 queue
- 3 Scottish independence: Tory revolt against 'devo max' grows as Rail Minister Claire Perry joins
- 4 Hitler’s former food taster reveals the horrors of the Wolf’s Lair
- 5 Scottish independence referendum: JK Rowling, Russell Brand, Nigel Farage and more react to the 'No' vote
Scottish independence referendum: Frankie Boyle reacts to nation's 'No' vote - 'To be fair, I've always hated Scotland'
Scottish independence referendum results: David Cameron pledges plans for 'English votes for English laws' by January
Scottish independence live: Scotland gives a clear 'No' in historic referendum - as it happened
Scottish referendum results: David Cameron set to unveil major devolution of powers to England
Hitler’s former food taster reveals the horrors of the Wolf’s Lair
Daniele Watts: Django Unchained actress detained by Los Angeles police after being mistaken for a prostitute
Scottish independence referendum: A nation divided against itself
Scottish independence: David Cameron is becoming the 'George Bush of Britain'
Russia freezes Ukraine into submission: Kiev admits country doesn't have enough fuel for winter
Scottish independence: The Queen breaks silence on referendum debate – as think tank warns of £14bn black hole if Scotland votes Yes
Archbishop of Canterbury admits doubts about existence of God
iJobs Money & Business
£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...
Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...
£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...
To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...