Spotify announces profit for the first time

Absrtact: According to foreign media reports, the digital music service Spotify will release its 2010 Business Report later this year, with a forecast that it will be the first time Spotify announced a profit. A business model that can stop the loss of millions of of dollars in music piracy is

According to foreign media reports, Spotify, the digital music service, will release its 2010 Business Report later this year, with forecasts that it will be the first time Spotify has announced a profit. A business model that can stop the loss of millions of of dollars in music piracy is emerging.

Spotify has overtaken itunes as the largest digital music retailer in Sweden and Norway. The service has 6 million active users, although most of them are still using its free service, but it currently has more than 1.9 million paid subscribers in the US and Europe.

Spotify lost nearly 17 million pounds last year in Britain alone. But Martin Scott, an expert at market research firm Analysys Mason, said 2010 Spotify should have earned 59 million euros (about 546 million yuan). The company earned only 13 million euros in 2009.

In 2010, Spotify paid a royalty of 45 million euros for record companies, with staff salaries, offices and marketing spending about € 10 million. So its profits are at most 5 million euros. Scott says Spotify has a modest profit of about € millions of, "because it has successfully converted two-digit users into paid subscribers." ”

Spotify launched its digital music service in the United States in July this year, with 200,000 paid U.S. users. The Virgin Media will offer Spotify subscription services to its 5 million British clients later this year, allowing them to download songs with televisions and computers.

Three-fourths of Spotify's revenue comes from subscriptions, and One-fourth from advertising. Scott estimates that 450,000 of Spotify's subscribers paid an average of € 8 a month in 2010, generating a total of € 45 million in revenue, while Spotify's advertising revenue was about 13 million euros. Spotify declined to comment on the estimate.

Spotify tightened its restrictions on free services This April, which led to more than 1 million people ceasing to use Spotify, but the number of their paid subscribers, the 4.99-pound base package and the 9.99-pound premium package, began to soar. In April and May, more than 500,000 users became paid users. Spotify was launched in October 2008, with about 1 million subscribers by March 2011.

Spotify was founded by Swedish entrepreneur Daniel Aick (Daniel Ek). Its popularity in Scandinavia is partly due to its agreement with Internet service providers Telia that the TV and broadband services in Sweden and Finland bundle Spotify's music service. The company's international expansion has benefited from a new round of financing: in February this year, Spotify raised $100 million trillion in $1 billion trillion in Yuri Milner, the Russian technology investor Milner.