Spotify: The worm turns a profit
Flamin Ek! They said it would never happen but for Danny boy it’s a stream come true- Spotify’s revenues increased by over 40% last year, with the streaming service turning a profit in the UK for the first time.
According to the latest figures reported in The Guardian, the company’s revenues rose by 41.8% from £92.6m in 2012 to £131.4m in 2013, with Spotify UK moving from an £11m net loss to a £2.6m profit year on year.
A shadowy Spotify spokesman 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% increase in streaming revenues on the previous year.”
The growth has largely been attributed to Spotify’s partnership with Vodafone to bundle subscriptions into its 4G mobile tariffs, alongside other deals such as half price discounts for students.
Interestingly, Spotify’s advertising revenues rose by 12.3% from £9.1m in 2012 to £10.2m in 2013, but subscription revenues rose from £64.8m to £92m- proving that the money really is in the core business as opposed to advertising income- good news for music fans who don’t want Spotify to turn into a Facebook / Google style creep show tracking the movement of each user. Do people even use the ‘social’ elements of Spotify much?
In 2013, Spotify paid out a reported £96.2m to rights holders. With the service now focusing on global expansion, it remains to be seen how the big green giant will turn out in the long run.
In related news, Spotify also added most the entire solo works of John Lennon to its catalogue this week, proving that it will leave no heritage rock unturned, though The Beatles catalogue remains elusive. Despite this, the work of the Plastic Ono Band is unlikely to further boost Spotify’s coffers.
Generator North East, The Manse, Kingsland Church Studios, Priory Green, Byker, Newcastle Upon Tyne, NE6 2DW
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