Amuse revenues grew 209% in 2019, but firm posted $11m operating loss

Since launching in 2016, Sweden-born DIY distribution platform Amuse has drawn a lot of music industry attention.

For one thing, the platform is the original source of breakout acts like Lil Nas X.

For another, it operates a fairly controversial business model – including its offer of completely free music distribution for independent artists to services such as Spotify, Apple Music, YouTube Music and more besides.

Today (September 23), MBW has obtained Amuse’s financial results for the 2019 calendar year, via the firm’s filings in its home country of Sweden.

Amuse’s fiscal 2019 annual report, which you can read in full here, reveals that the company generated net revenues of 85.1m SEK (approximately $9.5m at current exchange rates) in the year.

That was up by some 209% on the 27.6m SEK that Amuse generated in 2018.

Amuse’s operating expenses in 2019 were 183.6m SEK ($20.4m), which resulted in an annual operating loss of 98.4m SEK ($10.9m). Its annual net loss stood at 97.8m SEK (also $10.9m).

In 2018, Amuse posted a net loss of 49m SEK, meaning that this figure nearly doubled year-on-year in 2019.

Amuse’s report shows that it had 49 employees in 2019, up from 33 the previous year.

Amuse’s model was originally two-tiered: free distribution, plus its in-house record label.

The idea was to sign the most promising artists on the firm’s free tier to its record label, which splits profits 50/50 with its acts.

Then, in March this year, Amuse additionally launched Amuse Pro, a premium tier offering DIY artists more advanced tools, on top of the basic (and free) digital distribution option, for a monthly fee $7.99 or $59.99 per year.

Rival UnitedMasters launched a similar premium service in July for $5 per month.

Last week MBW discovered that Amuse’s co-founder Andreas Ahlenius has left the company after five years.

Last summer, Amuse CEO Diego Farias revealed that his company offered Lil Nas X a $1m+ advance before the artist went on to sign the track to Columbia Records.

The eye-watering figure raised questions over how Amuse could run a sustainable long-term business by offering a free distribution service, while retaining no permanent copyrights and offering $1m+ advances. (The Amuse Pro subscription tier hadn’t been launched at the time).

When MBW interviewed Farias last year, we asked him about his company’s long term plans for profitability.

Farias told us that “while we are not owning catalog, we think that we can build a long-term catalog where we have these licenses and earn money over the license period”.

We think that we are on a path to create a sustainable business model. No-one is trying to do this to [just] disrupt the space with venture capital money and mess things up for people.”

Diego Farias, Amuse (speaking last year)

He added: “We think we can build a sustainable business on that, together with Fast Forward, and additional revenue flows that we are going to introduce.

“We think that we are on a path to create a sustainable business model. No-one is trying to do this to [just] disrupt the space with venture capital money and mess things up for people.”

Amuse raised a $15.5m Series A funding round in May 2018.

Added Farias, speaking to MBW last year: “The long-term plan is definitely to generate enough revenues from all of the different activities that we do to sustain our business.”Music Business Worldwide