| xoxoxoBruce |
08-17-2018 04:03 PM |
All the record labels except one have dumped most of or all of their Spotify stock.
Quote:
As reported by Forbes:
“Spotify is growing fast, losing money, and burning through a common measure of cash flow. According to its prospectus, between 2015 and 2017, revenues grew at a 45% annual rate to €4,090 million. In 2017, Spotify reported a net loss of €1,235 million, nearly six times more than it lost in 2015, and its Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) was negative €324 million.” 10
Further, Forbes quotes Spotify’s own prospectus on this point:
“Since our inception in April 2006, we have incurred significant operating losses and as of December 31, 2017, had an accumulated deficit of €(2,427) million. For the years ended December 31, 2015, 2016, and 2017, our operating losses were €(235) million, €(349) million, and €(378) million, respectively.” 11
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Quote:
“We have incurred significant costs to license content and continue to pay royalties to music labels, publishers, and other copyright owners for such content. If we cannot successfully earn revenue at a rate that exceeds the operational costs, including royalty expenses, associated with our Service, we will not be able to achieve or sustain profitability.” 12
Boo! Hiss! Greedy copyright owners!
Except there’s this. In February of 2017, despite losing truckloads of money for years, Spotify found it necessary to open offices in New York City. And not just in any old office building. It rented space in the newly rebuilt World Trade Center. 13 According to Digital Music News, this is 478,000 square feet of office space spread over a total of 14 floors. This was not enough. Spotify later signed an option to take on 100,000 more square feet. 14 I suggest that you click on the link provided in the endnote and take a look at the pictures.
The cost of this? Again according to Digital Music News:
$2.77 million a month, or $33.29 million a year
Over the 17 years lease, more than $566 million in rent
$31 million in upfront payments
To this we can add the fact that:
In 2015, executive and board member pay was $16.9 million, an increase of 300% over the previous year. 15
In 2015, the average Spotify employee made $150,000. 16
During 2015, Spotify lost $253.8 million (235 million Euros). 17
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Hmm, that doesn't smell good.:eyebrow:
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