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posted by mrpg on Thursday March 01 2018, @06:30AM   Printer-friendly
from the the-sounds-of-music dept.

Spotify has finally filed for an initial public offering:

Spotify, the world's largest music streaming service, has filed for an initial public offering today. The Sweden-based company co-founded by Daniel Ek, who has remained its CEO since its 2006 inception, and Martin Lorentzon has more than 71 million paying users as of December 2017. The company also enjoys an overall user base that includes ad-supported free listeners of 159 million, far outpacing the competition from Apple, Google, Tidal, and others. Spotify will trade on the New York Stock Exchange under the symbol "SPOT."

Spotify will be offering a direct listing, meaning that its shares can be traded on the open market sooner than with a more conventional IPO, as Spotify doesn't intend to raise a large amount of capital with its IPO. According to CNBC, the price of Spotify shares traded on private markets indicate the company could be worth as much as $23 billion.

The filing gives us one of our best looks yet at Spotify's finances, with the company posting revenue last year of €4,090 million (nearly $5 billion) and a net loss of -€1,235 million (or ~$1.5 billion) for the same period.

Also at TechCrunch.


Original Submission

Related Stories

How The Pirate Bay Helped Spotify Become a Success 10 comments

One of the latest beneficiaries of sharing music online, according to TorrentFreak, turns out to be the streaming music service Spotify:

Without The Pirate Bay, Spotify may have never turned into the success it is today. Ten years ago record labels were so desperate to find an answer to the ever-growing piracy problem that they agreed to take a gamble. Now, more than a decade later, Spotify has turned into a billion-dollar company, with pirate roots.

Last autumn the EU suppressed a 300-page copyright study showing yet again that copyright infringement does not harm sales. It often helps sales. Both factors have been known for a long time, with other studies going back to the 1990s.

Earlier on SN:

Spotify Files for IPO After Losing $1.5 Billion in 2017
Spotify Raises Cash to Fight Apple for Streaming Music Market
Band Earns $20K for Silent Album on Spotify

Original Submission

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  • (Score: 3, Interesting) by TGV on Thursday March 01 2018, @07:01AM (8 children)

    by TGV (2838) on Thursday March 01 2018, @07:01AM (#645649)

    Now that their original investors are unwilling to pony up even more, the unknowing public at large is offered the great opportunity of paying the CEO and robbing artists. What a wonderful proposal.

    • (Score: 2) by MichaelDavidCrawford on Thursday March 01 2018, @07:47AM (3 children)

      by MichaelDavidCrawford (2339) Subscriber Badge <mdcrawford@gmail.com> on Thursday March 01 2018, @07:47AM (#645664) Homepage Journal

      "robbing" is the operative word here.

      It's commonly argued that the artists enjoy more live concert ticket sales as a result of Spotify piracy. My friend Rick Walker [looppool.info] gets by mostly on such ticket sales. He doesn't feel that Spotify is earning its keep.

      --
      Yes I Have No Bananas. [gofundme.com]
      • (Score: 1, Touché) by Anonymous Coward on Thursday March 01 2018, @07:49AM

        by Anonymous Coward on Thursday March 01 2018, @07:49AM (#645667)

        Chances are, Spotify feels the same way about Mr. Walker.

      • (Score: 1, Insightful) by Anonymous Coward on Thursday March 01 2018, @09:41AM (1 child)

        by Anonymous Coward on Thursday March 01 2018, @09:41AM (#645694)
        Spotify are losing money so they aren't earning their keep ;).
        • (Score: 2) by TGV on Friday March 02 2018, @07:27AM

          by TGV (2838) on Friday March 02 2018, @07:27AM (#646248)

          Spotify’s Chief Product Officer had the highest reported income. This year, Gustav Söderström reported 67 million kr ($7.9 million). Co-founder and former Chairman of the Board Martin Lorenzton received 44.1 million kr ($5.2 million). Spotify’s Chief Premium Business Officer Alex Noström reported an income of 42.1 million kr ($5 million). CEO Daniel Ek received 8 million kr ($4.5 million). Oskar Stål, Vice President of Consumer Engagement, reported 34 millon kr ($4 million).

          Spotify’s global HR manager, Katarina Berg, and Tax Director, Jens Svolgaard, reported the most modest incomes. Berg received 6.7 million kr ($789,260) while Svolgaard reported 3.6 million kr ($424,080).

    • (Score: 0) by Anonymous Coward on Thursday March 01 2018, @07:47AM (3 children)

      by Anonymous Coward on Thursday March 01 2018, @07:47AM (#645665)

      If anything, this will offset the risk of the initial investors; they probably want an IPO.

      However, don't let reality get in the way of your naive view of the way the world works.

      Say, though, what have you ever done for society? My daughter's life has been objectively improved by Spotify, as she uses that service all the time; what have you done for the world, even in failure? (Sorry, your worthless FOSS patches don't count.)

      • (Score: 1, Touché) by Anonymous Coward on Thursday March 01 2018, @12:13PM (1 child)

        by Anonymous Coward on Thursday March 01 2018, @12:13PM (#645724)

        My daughter's life has been objectively improved by Spotify

        If listening to streamed-music means an objective improvement in someone life's, I feel like the world that one lives in must be a very shitty one.

        • (Score: 0) by Anonymous Coward on Thursday March 01 2018, @12:25PM

          by Anonymous Coward on Thursday March 01 2018, @12:25PM (#645727)

          However, I know it's not a good one.

      • (Score: 3, Insightful) by TGV on Friday March 02 2018, @07:29AM

        by TGV (2838) on Friday March 02 2018, @07:29AM (#646249)

        > If anything, this will offset the risk of the initial investors; they probably want an IPO.

        I know that, but about them I care even less.

        > Say, though, what have you ever done for society?

        Are you some kind of hardcore capitalism defender? Fucking anonymous cowards.

  • (Score: 2) by MichaelDavidCrawford on Thursday March 01 2018, @07:45AM (1 child)

    by MichaelDavidCrawford (2339) Subscriber Badge <mdcrawford@gmail.com> on Thursday March 01 2018, @07:45AM (#645663) Homepage Journal

    Kuro5hin's balsamic viniga made bank when he bought TSLA shortly after its IPO.

    "Losing 1.5 Billion" is reminiscent of the Irrational Exhuberance of Yore.

    My latest project is quite close to customer beta.

    All those customers are peripherals manufacturers - my client is a fabless semiconductor firm.

    I get a big check when all the customers have signed off on the beta. Those customers are quite motivated to release it to their end-users.

    During the Dot-Com Boom there was some guy who somehow managed to qualify for hundreds of credit cards. He took the maximum cash advance out of each one then bought internet stocks with it. His house was wallpapered with sticky notes so as to remind him to stay current on his payments.

    I read about him in a newspaper article just about when the Dot Com Crash was as-yet barely noticeable.

    --
    Yes I Have No Bananas. [gofundme.com]
  • (Score: 3, Insightful) by Azuma Hazuki on Thursday March 01 2018, @08:35AM (4 children)

    by Azuma Hazuki (5086) on Thursday March 01 2018, @08:35AM (#645682) Journal

    Fuck, I hate these assholes gambling with the US economy in these casinos they call stock exchanges. PRODUCE SOMETHING. Work for a living.

    --
    I am "that girl" your mother warned you about...
    • (Score: 3, Insightful) by takyon on Thursday March 01 2018, @08:36AM (1 child)

      by takyon (881) <reversethis-{gro ... s} {ta} {noykat}> on Thursday March 01 2018, @08:36AM (#645683) Journal

      The irony here is that Spotify are also parasites.

      --
      [SIG] 10/28/2017: Soylent Upgrade v14 [soylentnews.org]
      • (Score: 3, Insightful) by Wootery on Thursday March 01 2018, @11:45AM

        by Wootery (2341) on Thursday March 01 2018, @11:45AM (#645720)

        You mean the way very little of the royalties they pay actually goes to the artists?

        I'm not sure that makes Spotify parasites, but maybe the record companies. Anyway, how much of the money goes to the suits at the top? Presumably that money is paying for a whole bunch of music industry jobs, no?

    • (Score: 0) by Anonymous Coward on Thursday March 01 2018, @10:44AM (1 child)

      by Anonymous Coward on Thursday March 01 2018, @10:44AM (#645711)

      Raising capital and democratizing ownership are very important to a functioning society.

      • (Score: 3, Insightful) by Azuma Hazuki on Friday March 02 2018, @03:38AM

        by Azuma Hazuki (5086) on Friday March 02 2018, @03:38AM (#646193) Journal

        There is a difference between entrepreneurial capitalism and stakeholder capitalism, one that I don't think gets anywhere near enough exposure. If you actually think the stock market democratizes wealth, rather than acting as probably *the* single most powerful funnel to the ultra-wealthy, you're either ignorant or delusional.

        Besides which, our money is floating, fiat currency. It has no value in and of itself. It's not backed by anything. Our money, to use a physics analogy, is a boson, not a fermion; it's the mediator between assets, work, goods, and services, not any of these itself. When the velocity of money is slowed or stopped--for example, offshore hoarding or locking it all up in solid assets somewhere--the economy suffers and eventually disintegrates, exactly the way a proton would if the gluons in it suddenly stopped exerting the strong nuclear force.

        --
        I am "that girl" your mother warned you about...
  • (Score: 3, Interesting) by jmorris on Thursday March 01 2018, @09:51AM (7 children)

    by jmorris (4844) on Thursday March 01 2018, @09:51AM (#645697)

    Looks like they spent 5325M servicing 230M users which works out to 2Euros/month/user. They can't recoup that through subscriptions and ads? They charge $9.99US/mo, want to assume something similar elsewhere but the math doesn't work if that is so. If all 71m paid subs were paying that much they would carry the free users even if ads brought in zero. I'm betting it is like the drug companies, milk America to subsidize the rest of the world but it ain't bringing in enough coins to feed the licensing agencies and pay hosting.

    Considering their situation is about as good as it is ever getting, the walled gardens are closing in on them and royalties only go up, going to have to rate this stock a "don't buy" unless you are just playing the media frenzy and think you will be the one who gets out before the stampede.

    • (Score: 2, Informative) by hager on Thursday March 01 2018, @01:38PM (1 child)

      by hager (898) on Thursday March 01 2018, @01:38PM (#645747)

      ... milk America to subsidize the rest of the world ...

      I don't know how much they pay in other countries, but here in Sweden we pay 99 SEK, which is roughly 11.9 USD.
      If this list [keepvid.com] of countries where Spotify is available is correct, then I would guess the service is priced similarly elsewhere, except perhaps for the south american countries.

      • (Score: 0) by Anonymous Coward on Thursday March 01 2018, @01:55PM

        by Anonymous Coward on Thursday March 01 2018, @01:55PM (#645756)

        You are correct regarding the south American countries. Don't know why but I pay a family pack at 5 US dollars per month, which has 6 users including me. The single user account I think is a little more than half of that.
        Pretty cheap.

    • (Score: 2) by anotherblackhat on Thursday March 01 2018, @03:29PM (3 children)

      by anotherblackhat (4722) on Thursday March 01 2018, @03:29PM (#645802)

      Revenues were €4,090 million.
      €4090M/71M = €57.60 per subscriber per year, or €4.80 per user per month on average.

      So either the average subscriber pays €4.80, or they lied. (or misrepresented the facts if you prefer).
      A student plan is $5/month (€4.10) so it's possible that the average is €4.80, but my money is on "they lied".
      A "subscriber" probably includes everyone in a group plan - i.e. if someone pays for a family plan which allows up to 6 people to listen, then they count that as 6 paid subscribers.
      The lie may lie with reporters - "between 12M and 71M paying accounts", ends up being reported as 71M paying accounts.

      • (Score: 2, Informative) by Anonymous Coward on Thursday March 01 2018, @05:05PM (2 children)

        by Anonymous Coward on Thursday March 01 2018, @05:05PM (#645849)

        Yeah let's COMPLETELY ignore that the revenue report includes the money they raised from shoving ads in front of the 159 million free users as well.

        I hope you're not a scientist.

    • (Score: 0) by Anonymous Coward on Thursday March 01 2018, @11:09PM

      by Anonymous Coward on Thursday March 01 2018, @11:09PM (#646072)

      their servers use systemd, maybe this is a thing to factor in...

  • (Score: 0) by Anonymous Coward on Thursday March 01 2018, @11:33AM (4 children)

    by Anonymous Coward on Thursday March 01 2018, @11:33AM (#645718)

    also called pro rata. That means your money is given to the most popular artists and not the ones you actually listen to.

    • (Score: 0) by Anonymous Coward on Thursday March 01 2018, @12:28PM (3 children)

      by Anonymous Coward on Thursday March 01 2018, @12:28PM (#645728)

      If you don't listen to some artist, then you are reducing that artist's proportion of listeners.

      If you do listen to an artist, then you are increasing that artist's proportion of listeners.

      • (Score: 0) by Anonymous Coward on Thursday March 01 2018, @03:21PM (2 children)

        by Anonymous Coward on Thursday March 01 2018, @03:21PM (#645797)

        It's not listeners but how many times a song is played. And the big names rack in trillions of repeats. That means your indie artist is going to net pretty squarely zilch.

        • (Score: 0) by Anonymous Coward on Thursday March 01 2018, @07:24PM (1 child)

          by Anonymous Coward on Thursday March 01 2018, @07:24PM (#645925)

          Go figure.

          • (Score: 0) by Anonymous Coward on Thursday March 01 2018, @09:52PM

            by Anonymous Coward on Thursday March 01 2018, @09:52PM (#646026)

            None to you because you only ever listen to Justin Bieber.

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