Popular music streaming web-service, Spotify, is doing rather well these days. The company has more than doubled its revenue in 2012.
Spotify‘s latest revenue, as shown on Wednesday, amounts to a monstrous 435 million Euros. That is $577 million or R5 699 317 500.
Spotify provides ad-free, popular and on-demand music for free for paying customers. Founded in 2006 by Daniel Ek and Martin Lorentzon of Sweden, this music streaming service has revolutionised music streaming on the internet.
The Stockholm based company strikes royalty deals with record labels and then pays back about 70% of it‘s revenue to the rights holders.
The company posted a 58.7 million Euro net loss, as compared with the 45.4 million loss in 2011 on a turnover of 190 million.
Spotify is an unlisted company and has more than 20 million active users. They have more than 5 million paying customers world wide. A definite sign that they are doing something right.
They also receive financial backing from companies such as Northzone, Kleiner Perkins Caufield & Byers, Accel Partners and DST. There are also many fund raising activities held to support the growth of this innovative company.
“œWe cannot exclude the need or desire to raise more funds in the future to fund future growth initiatives,“ Spotify said.
Music streaming and popular, on-demand music has become extremely popular all over the world. Music lovers world wide love the fact that they can listen to their favourite songs, from almost any place, at any time. The increase in music streaming has also sky-rocketed in popularity alongside smartphone use.
Internet Radio service Pandora, founded in 2000, and Spotify continue to make profit due to the cost of royalty fees and with almost 68 million active users combined, they are a testament to the increasing popularity of music streaming services.
Leading tech companies have also taken notice of this increase in popularity. Google, Amazon and Apple believe that music streaming is an essential part of growing their presence in a smartphone dominated world.
In 2012, Spotify launched in countries such as Germany, Australia, Ireland and New Zealand and almost doubled its monthly active users, and this year they have made forays into Latin America and Asia.
While not yet available in South Africa, at the rapid pace the company is growing, we can be sure to welcome the service onto our shores soon.
Source: Businesstech.co.za
