More students signing up and a partnership with Vodafone helped sales of Spotify subscriptions jump 42 per cent, accounts revealed.
Spotify said a deal with Vodafone offering Spotify as part of a bundle for new customers and the introduction of a student discount helped subscription revenues jump from £64.7 million to £91.9 million in 2013.
Monthly subscriptions to the platform range from £4.99 to £9.99 a month. Total revenues at Spotify’s UK subsidiary grew 40 per cent to £131.3 million in 2013, with ad sales increasing from £9 million to £10.2 million.
Spotify UK also swung to a £2.5 million profit last year, from an £11 million loss the year before, according to accounts filed with Companies House.
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A spokesperson for Spotify UK said: “The growth seen by Spotify Ltd mirrors the growth of digital recorded music revenues in the UK in 2013, which saw digital revenues account for 50% of total UK record industry trade revenues for the first time, and a 41 per cent increase in streaming revenues on the previous year.”
Spotify UK utilised losses from previous years to reduce its tax bill, meaning it paid no tax last year.
Staff at Spotify’s London office grew marginally from 111 to 120, while the unnamed highest paid direct took home £72,728, compared to £95,625 a year earlier, although it is not clear whether these figures refer to the same person.
Accounts also reveal that the cost of sales, which includes royalties paid to musicians and record labels, decreased as a percentage of revenue, although sources indicate that this was due to a change in accounting procedures.Spotify has faced criticism of the amount it pays artists from the likes of Radiohead’s Thom Yorke. Last year the company revealed that the average payment for rights holders for a single play on the platform is between $0.006 and $0.0084.
Spotify, founded by Swede Daniel Ek in 2008, has to date raised over $500 million in funding from investors including Napster founder Sean Parker, Asia’s richest man Li Ka-shing, Ashton Kutcher and Goldman Sachs.
Spotify, which operates in 58 countries, has more than 40 million users globally and over 10 million paying subscribers. The company has been tipped to go public imminently.Reuse content