Feeds

Spotify's rising revenues gobbled by royalties blackhole

Spend a lot of money to make not quite as much money

Next gen security for virtualised datacentres

Streaming services face a brutal few months, but leader Spotify can at least point to solid revenue. Spotify UK, which was responsible for the bulk of the music company’s global business until last month, saw its revenues increase to £63.17m in 2010, up from £11.32m in 2009, the first year of its rollout.

According to its latest financial report, £45m came from subscriptions and £18m from advertising. Spotify created a huge demand for its free service, spread by word of mouth, in its first six months of its launch, but rapidly applied the tourniquet and steered users to paid-for packages ranging from 99p for a day to a tenner a month. Losses were substantial: on top of other expenses, it spent £64m on licensing music from rights-holders, leaving it with a pre-tax loss of £26.54m, compared to £16.61m in 2009.

Spotify has hitched its fortunes to Facebook in the US as a non-exclusive music partner, but reaped the lion’s share of uptake. US-based Rdio beat Spotify to its US launch but has been obliged to go ad-free for a limited period.

Now compare Spotify’s fortunes with the former streaming music pinup turned ghost site, Last.fm. The darling of Shoreditch, Last.fm has never made a profit and earned just £7.3m in 2010. That’s 74 per cent up from the previous year, but after eight years of operation, the company still can’t make a profit. Losses were £2.8m before tax, thanks to much lower staff costs. CBS snapped up the Silicon Roundabout stars for $280m. ®

Secure remote control for conventional and virtual desktops

More from The Register

next story
BBC: We're going to slip CODING into kids' TV
Pureed-carrot-in-ice cream C++ surprise
6 Obvious Reasons Why Facebook Will Ban This Article (Thank God)
Clampdown on clickbait ... and El Reg is OK with this
Twitter: La la la, we have not heard of any NUDE JLaw, Upton SELFIES
If there are any on our site it is not our fault as we are not a PUBLISHER
Facebook, Google and Instagram 'worse than drugs' says Miley Cyrus
Italian boffins agree with popette's theory that haters are the real wrecking balls
Sit tight, fanbois. Apple's '$400' wearable release slips into early 2015
Sources: time to put in plenty of clock-watching for' iWatch
Facebook to let stalkers unearth buried posts with mobe search
Prepare to HAUNT your pal's back catalogue
Ex-IBM CEO John Akers dies at 79
An era disrupted by the advent of the PC
prev story

Whitepapers

Endpoint data privacy in the cloud is easier than you think
Innovations in encryption and storage resolve issues of data privacy and key requirements for companies to look for in a solution.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Advanced data protection for your virtualized environments
Find a natural fit for optimizing protection for the often resource-constrained data protection process found in virtual environments.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Next gen security for virtualised datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.