April 16, 2012

News: Spotify CEO says “Profitability Is Absolutely Not a Priority…”

Full story below courtesy of [Digital Music News]

Spotify isn’t profitable. They may not be profitable for years. And according to recent comments from Spotify CEO Daniel Ek, none of that really matters.  Here’s what Ek just told business daily Dagens Industri (translated from Swedish) on the financial situation.

 

“The question of when we’ll be profitable actually feels irrelevant.  Our focus is all on growth.  That is priority one, two, three, four and five. But of course we expect to make a profit in the long run.”

 

The logic is this: massive scale requires massive amounts of cash.  But scale introduces the possibility of a ‘music OS,’ proper and attractive artist payouts, and disruptive triumphs over competitors like Apple.  And, theoretically, lots of profits – year after year.

It all sounds breathtakingly adventurous, except that Spotify is now shaking the cup for another breathtaking round.  That is, of $200 million or more according to whispers (Ek says he’s open to getting funding but not interested in an IPO.)  Meanwhile, recent-term losses look something like this, according to stats confirmed by the company.

 

Revenues, 2011: $249.1 million Losses, 2011: ― $59.3 million

 

And, this forecast…

Revenues, 2012 (anticipated): $889 million

Losses, 2012 (anticipated): ?

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