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Linus Larsson: Historic milestone for Spotify

1. Why is the quarterly report so important? " Spotify has succeeded in enormously. Changed the music world in the foundation. Come up with a credible respons

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Linus Larsson: Historic milestone for Spotify
1. Why is the quarterly report so important?

" Spotify has succeeded in enormously. Changed the music world in the foundation. Come up with a credible response to the previous so extensive is the piracy of music. And attracted millions and millions of people the world over to start to listen to music streamed from the net. To just get the record companies have been a feat.

– However, the company has all the time been loss. Until now. During the fourth quarter of 2018 made Spotify an operating profit of eur 94 million, the equivalent of nearly a billion dollars. (Last quarter, is sometimes described as a vinstkvartal, but in terms of operating income, there was a small loss.) Vinstkvartalet is a great victory for the company and those who have fought for its model of advertising-financed free accounts as gateway to the payment service, a focus that ceo Daniel Ek has been fighting to defend against the critics.

2. Why has it taken such a long time to reach profitability?

– if you Ask the Spotify, it is because the company always has made it a priority to grow, find new markets and get more customers in front of to reach profitability. There is much in it. For a company like Spotify, a riskkapitalfinanserat, digital prior to this start-up company, it is quite normal to go with the loss while expanding. It is just that the period has been unusually long for Spotify. The company was founded in 2006, almost 13 years ago.

another contributing factor is the payments to record companies and artists. No music, no Spotify. And to get the streaming music, a substantial part of the revenue paid on. There is an interesting development where Spotify goes directly to the artists, which could make record labels less important. Daniel Ek has toned down these efforts, but the development is worth to keep eyes on.

3. What happens now with Spotify?

One word: Pods. In connection with the quarterly report confirmed Spotify also two large purchases in the podcastvärlden: Poddproducenten Gimlet and the platform Anchor. The price is not public, but medieuppgifter has identified about 200 million dollars for the Gimlet. In 2019, will be more purchases – Spotify, flag for up to a half a billion dollars should be ploughed in the acquisition.

– Therefore leaning it to that there will be no more profit in a while. The forecast for both the first quarter and for the entire 2019 pointing to big losses for the full year of between 200 million and 360 million euros.

also Read: Spotify confirms two buy.

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