Spotify user numbers grow globally as company's UK revenue falls

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Spotify UK fell into the red last year, as subscription revenue fell and the music streaming service invested more in growth here.

Accounts reveal Spotify’s British arm made a loss of £10.1 million in 2012, compared with a profit of £21 million in 2011.

The online music streaming platform saw revenue fall to £92.6 million in 2012, down from £96.5 million a year earlier. The decline was partially down to a decrease in subscription revenue, which fell from £72.4 million to £64.7 million due to a change in the way subscriptions were booked.

UK advertising on the platform saw a small increase, growing from £8.1 million to £9.1 million to the year ending December 31. Sources say that subscription numbers have been growing strongly in 2013 thanks in part to partnerships with the likes of Vodafone.

Spotify UK declined to comment on its accounts but earlier in the year parent company Spotify Group said: “In 2012 the business focused on driving user growth, international expansion and product development, resulting in soaring user numbers and increased market penetration.

“Our key priority throughout 2013 and beyond remains bringing our unrivalled music experience to even more people while continuing to build for long-term growth - both for our company and for the music industry as a whole."

Spotify, which operates in 32 countries around the world, lets users stream 10 hours of music a month for free with advertising or pay a subscription fee for unlimited, advertising-free listening. The company has signed deals with major record labels including Sony, Universal and EMI, and to date has paid out $500 million in royalties to artists.

Globally Spotify saw users jump from 11 million to 20 million in the year, with 5 million paying subscribers. UK numbers were not disclosed. Figures from March this year show this has increased to 24 million users and 6 million subscribers. Last year was the first year that digital sales offset a decline in physical sales in the music industry.

Spotify UK, headquartered in London’s Soho district, almost doubled staff in 2012, growing the company from 64 to 111 people. Spotify UK’s highest paid director took home £95,625.

Accounts also revealed that founder Daniel Ek was paid €228,294 (£191,427) in 2012.