Latest in Earnings

Image credit:

Neither Spotify nor musicians are making much money from streaming

Billy Steele
November 25, 2014
Share
Tweet
Share

Sponsored Links

Spotify may be a big name when it comes to music streaming, but the company is hardly rolling in the dough. The private company disclosed today that it took in 747 million euros (around $1.03 billion at the time) in 2013, up about 74 percent from 2012. However, shelling out a good portion of that to record companies and publishers led to net losses of $80 million for the year -- a near 70 percent cut that takes the majority of the service's revenue. The numbers reveal that Spotify isn't quite lining its pockets with cash. In fact, more folks opt for the free option instead of paying a monthly fee. Only 8 million of the 36 million active listeners at the end of last year were opening their wallets. Some quick math shows that to be a little less than a quarter of the total user base.

In the financial statement, Spotify said 91 percent of sales ($897 million) are from subscriptions with an additional $90 million coming from ads. If the same 70 percent cut heads to licensing fees for both, the free listeners are obviously earning labels, and in turn artists, much less. It's quite easy to see why acts like Taylor Swift and others are upset that the service isn't paying what they think it should, especially for the non-paying customers. And of course, YouTube's recent effort and the pending integration of Beats Music into Apple's music plans could make the uphill climb a bit steeper.

All products recommended by Engadget are selected by our editorial team, independent of our parent company. Some of our stories include affiliate links. If you buy something through one of these links, we may earn an affiliate commission.
Comment
Comments
Share
Tweet
Share

Popular on Engadget

Facebook inexplicably logs out iPhone users

Facebook inexplicably logs out iPhone users

View
Put Bernie Sanders almost anywhere with this Google Street View app

Put Bernie Sanders almost anywhere with this Google Street View app

View
Microsoft reverses Xbox Live price hike, will add free multiplayer for some games

Microsoft reverses Xbox Live price hike, will add free multiplayer for some games

View
Apple's Magic Keyboard for iPad drops to $199 at Amazon

Apple's Magic Keyboard for iPad drops to $199 at Amazon

View
The Morning After: The Galaxy S21 reviews are in

The Morning After: The Galaxy S21 reviews are in

View

From around the web

Page 1Page 1ear iconeye iconFill 23text filevr