Spotify revenues topped $2bn last year as losses hit $194m


Spotify brought in a whopping $2.18bn (€1.95bn) in revenues in 2015, growing its income by 80% in the year.

Net losses stood at a painful  $194m (€173.1m), but these grew much slower – widening by just 6.7% compared to 2014.

In a financial filing in Luxembourg uncovered by MBW, Spotify told its investors that “in many ways, [2015] was our best year ever”.

Screenshot 2016-05-23 at 08.01.14


Advertising revenues nearly doubled in the 12 months, up 98% to $219m (€195.8m).

Meanwhile, subscription revenues grew by a slightly slower pace, up 78% to $1.95bn (€1.74bn).

In terms of Spotify’s total $2bn+ income (negligible ‘other’ revenues aside), ads therefore claimed 10.1% – an improvement on the 9.2% share seen in 2014, but another reminder of how heavily the company relies on people paying for premium accounts.

Screenshot 2016-05-23 at 08.03.57


Spotify’s payouts to the music industry (categorised as ‘royalty, distribution and other costs’) reached $1.83bn (€1.63bn) in 2015 – up 85% year-on-year.

That means 84% of Spotify’s total income last year went back out the door to the music industry, or to facilitate its payment to the music industry. (The figure includes money burnt on payment processing plus some facility and equipment costs.)

Screenshot 2016-05-23 at 08.43.26

Spotify’s total active user base increased from 60 million at the end of 2014 to 89m at the end of 2015, according to the filing.

Of these active users, over 28m were paid subscribers at the close of last year.

Considering the IFPI pegged the total number of paying audio music subscribers around the world in 2015 at 68m, that means Spotify was responsible for over 41% of them.

“Music has mass market appeal – and, as such, we believe we are just at the beginning of a much larger market opportunity, benefiting from significant first mover advantages,” said the firm’s annual filing.

“Subscription-only models have not yet proven scale and free user models, while scaling, have not proven a path to profitability. Spotify has the combined power of both.”

The Swedish company also revealed that its Discover Weekly playlist delivered 3bn streams last year.

Another interesting tidbit: the company paid $9.4m (€8.4m) for SeedScientific, the audience intelligence platform it acquired in June last year.

In its annual filing, Spotify called itself: “The No.1 pure play music service – the second largest revenue source to the music industry, both globally and the US.”

And it warned: “”If we cannot maintain Spotify’s culture as we grow, we could lose the innovation, teamwork and focus that contribute crucially to our business.”

IMG_0272Music Business Worldwide

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  • McAlli*

    Please stop using “income” when referring to “revenue”.

    • ilexx

      By definition, revenue is income.

      • mediatico

        No. Actually Spotify got revenues but it didn’t register any income (first table).

        • ilexx

          It doesn’t register a positive Net Income but that doesn’t mean it doesn’t register an income.

          Income as a word in the English language only refers to monies received from work or other investments. Revenues are monies received. End of story full stop.

          If you can’t recognize that revenue is a form of income then I’m not sure how you made it through business school.

          • mediatico

            In a financial context, using the same term for different concepts can lead to great confusion. Imagine, in this case, that Spotify reaches their investors telling them that they registered a “positive income” just because “revenue is a form of income”, LOL. Revenues are the cash generated from sales and income is what is left from those sells. It is different.

          • ilexx

            Ok my issue is that I understand what it is in a financial context, but that doesn’t make the general definition wrong.

            And let’s be clear here, the way it was used in the article wasn’t confusing, therefore there really wasn’t a need to ask the writer to refrain from using the term income when referring to revenue.

            This whole thing is really not that big of a deal, if the commenter understood what he was reading, there is no reason to be picky.

          • Brance Jones

            If you notice, the income statement at the top of the article has a line item called “Revenue” and a line item called “Financial income (net)”. If they are separate terms in financial statements, and the article content is based on financial statements, it only makes sense to use the definitions that are relevant to the financial statements.

            Also, to be fair, this article really isn’t for everyone. It takes a certain amount of financial nerdiness to even open this page. It shouldn’t be a surprise if someone with some actual financial/accounting savvy points out inconsistency in terminology between the financial statements that begin the article and the article itself.

          • ilexx

            I hear you.

      • TruthIsRelative

        You don’t have to be a CPA (although I am one) to recognize that revenues are the monies coming in and income is the profit (can be net after all expenses or gross after deducting cost of sales/COGS). Though many seem to like to call revenue income – it is NOT correct.

        • ilexx

          You see that’s the thing. I know how it goes in Accounting but that’s why I explained that by definition revenue is income. You can define, revenue without describing a form of income.

          Income: money received, especially on a regular basis, for work or through investments.

          Revenue: income, especially when of a company or organization and of a substantial nature.

          So yes we understand what gross income and net income mean in regards to profits but it doesn’t change the fact that revenue is a form of income.

  • Harry van der Veen


  • Motlokoe Beatmaker Phatudi-Mph

    Dear Music Traders,


    It is in my opinion that streaming by freemium subscribers should be treated as broadcast on demand.

    Together with the digital rights payable to date, there should be a performance right royalty applicable – paid to relevant societies on both the recording and the song, based on pay per play reporting.

    The basis being, of my opinion, that freemium is a form of public broadcast, as the content is continuously ready for consumption by the participating public.

    Reporting should be made on a separation of paying and freemium subscribers. I am of the view that this will allow clarity rates, and consistency in the rates variances.

    I am of the view that broadcasters across the world should pay for the recordings played.

    Music is free to their audience, not free to their advertising clients and doesn’t necessarily benefit the custodians of the said recordings.

    It is in my opinion that the streaming earnings are generally reasonable. However, freemium services need to pay for the legislated rights as per each country laws.

    I further believe it is time we evaluate and value recorded music assets as consumed product rather than the form it is delivered for consumption.

    This is an opinion I believe WIPO and all industry organizations support.

    We are now trading with music content, and revenue performance has shifted.

    Yours in music,

    Motlokoe Phatudi-Mphahlele

    NB: Publishing data challenge would reduce drastically!

  • Scott

    Does anyone have the link or actual filing?

    • william43

      Hmmm…it may be on the SEC site since they do have investors.


    No doubt the bulk of expenses are “other costs”, which must include all salaries paid to employees as well as other operational costs. Not very beneficial to lump your utility bills in with the money you pay out in royalties, unless you are trying to make it look like you pay out a lot more in royalties than you do. The way I see it based on my spotify royalties rate of $0.000058/play, you would need to get 400,000,000 registered plays
    (song which you own 100% of publishing) to generate about $120k in revenue from said song, which is less than 100k income after being taxed here in the U.S. That’s almost half a billion views. That’s like saying if 1 out of every 15 people on the planet earth listened to your song within 365 rotations of said planet, you will most likely have just enough money to buy a proper BMW and pay a mortgage. Never mind saving for your retirement, or having any children. Also this assumes no expenses of this musician/artist. After you figure in the cost of being a self employed musician, I really don’t see how there is any money to be reported as income from $0.000058/play. Is this not the same as arguing the basis of a minimum wage? Won’t the musicians that are paid these slave wages become a burden to our society when the taxpayer/social programs must compensate these poor artists for what Spotify will not pay?

    • JZ

      Personnel cost is specifically separated from royalty costs. In 2015, 1.6 Billion went to royalties and 0.24 Billion went to personnel cost (salaries). This is listed clearly in the screenshot above. Royalty accounts for 76% of all expenses, whereas personnel accounts for 11%. Please at least check the facts before you go on a rage blast.

    • Ernest Lam

      I like where you’re going with this but there are a number of assumptions that greatly affect your conclusion. First of all, you assume that the only way an artist can make money is through Spotify, which is simply not true. They also sing at concerts/venues and sell their albums in other places (iTunes, for example). This all adds to their income. Also, you’re assuming that each artist only has one song. To achieve your $120K income estimate (which is a lot, by the way) through Spotify alone, they will need to have 400 million plays across all of their songs. Take into account that a lot of people will listen to more than one of your songs in one sitting, then you reduce the barrier to reaching that 400 million number.

      I think it’s a fair model & the musician doesn’t have to actively do anything to earn that money. Plus, if Spotify didn’t exist, many more people would pirate and the musician would get even less. At least through Spotify, they regain some of that lost income.

    • threadox

      Were did you get the number from? US$ 0.000058/play? In reality, it’s about 100 times higher: US$ 0.006/play to US$ 0.0084/play

  • Calis Sims

    Unfortunately, it’s the artists that will suffer until this doomed model completely fails.