Feeds

Spotify's rising revenues gobbled by royalties blackhole

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

Boost IT visibility and business value

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. ®

Build a business case: developing custom apps

More from The Register

next story
Kate Bush: Don't make me HAVE CONTACT with your iPHONE
Can't face sea of wobbling fondle implements. What happened to lighters, eh?
Video of US journalist 'beheading' pulled from social media
Yanked footage featured British-accented attacker and US journo James Foley
Caught red-handed: UK cops, PCSOs, specials behaving badly… on social media
No Mr Fuzz, don't ask a crime victim to be your pal on Facebook
Ballmer leaves Microsoft board to spend more time with his b-balls
From Clippy to Clippers: Hi, I see you're running an NBA team now ...
Online tat bazaar eBay coughs to YET ANOTHER outage
Web-based flea market struck dumb by size and scale of fail
Amazon takes swipe at PayPal, Square with card reader for mobes
Etailer plans to undercut rivals with low transaction fee offer
Assange™: Hey world, I'M STILL HERE, ignore that Snowden guy
Press conference: ME ME ME ME ME ME ME (cont'd pg 94)
Call of Duty daddy considers launching own movie studio
Activision Blizzard might like quality control of a CoD film
US regulators OK sale of IBM's x86 server biz to Lenovo
Now all that remains is for gov't offices to ban the boxes
prev story

Whitepapers

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.
Top 10 endpoint backup mistakes
Avoid the ten endpoint backup mistakes to ensure that your critical corporate data is protected and end user productivity is improved.
Top 8 considerations to enable and simplify mobility
In this whitepaper learn how to successfully add mobile capabilities simply and cost effectively.
Rethinking backup and recovery in the modern data center
Combining intelligence, operational analytics, and automation to enable efficient, data-driven IT organizations using the HP ABR approach.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.