Spotify By The Numbers: High Royalty Outgoings, U.S. By Christmas?

Posted by | Nov. 16, 2010 | 6,802 views

Yes, Spotify is sticking to a target of launching Stateside by Christmas. In the meantime, our original curiosity about the freemium music service’s underlying viability hasn’t abated.

On that point, Sweden’s Veckans Affärer (Business Weekly) has interpreted company stats and interviewed Spotify’s Europe director to provide a few metrics…

Among them (unconfirmed), it says Spotify has earned €60 million in sales since October 2008’s launch.

Spotify won’t confirm that, but tells paidContent:UK: “In total, we’ve paid close to €40 million to rightsholders since launch across all territories. Approximately €30 million of this has been paid in the first eight months of 2010 alone (January to August).”

VA may have estimated Spotify’s revenue by calculating total subscription income from 500,000 ongoing paying subscribers, each paying €9.99 a month, for 12 months. But Spotify also has a cheaper, €5.99-a-month option, and not everyone will have subscribed since launch two years ago – so lifetime income could be different.

If true, it means two thirds, and maybe much more, of Spotify’s income is going out to rightsholders.Regardless, royalty outgoings are generally high. But these payments are also just two thirds of total costs. Hence, Spotify is not yet in profit.

What are the variables which could boost Spotify?…get the full story at Paidcontent.co.uk

Related Posts:

Who’s Afraid of Spotify?

Spotify and the USA. Why Not?

Google Willing to Help Record Labels Combat Music Piracy, But It’ll Cost Them

Two New Google Features Could Help Artists Find Fans

Why the Music Business Needs Spotify

Free MP3s: Who Cares?

Who’s Who in the New Music Gold Rush

Apple Moves Toward Music as a Service

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Posted by on Nov 16 2010. Filed under Business Models, Digital, featured, Gadget & Services. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.

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