The good news for the company is that its paid subscriptions grew 15% above analysts’ expectations. But it doesn’t stop there, since monthly users increased again, more precisely 22%. This represents 515 million people.
Paid subscriptions on Spotify, which represent the company’s biggest revenue, increased by 14%. While advertising revenue increased by 17%, becoming the second largest source of revenue. Afterwards, Why is Spotify still losing money?
Reasons Why Spotify Keeps Losing Money
Apparently, all the income we mentioned earlier was not enough to compensate for lost revenue, estimated at $248 million. However, Spotify has always said that the loss figure was in line with expectations and that it continued to bet on growth rather than profitability.
in JanuarySpotify has laid off around 600 employees as part of a massive cost cut
But, the reality is that it seems difficult for Spotify to generate consistent profits at all times. Well, it competes with other music services like Apple, Amazon, and Google, which don’t have to make a profit for it, since all three of them maintain this service as a benefit of their ecosystem. Instead, Spotify has no other source of income.
Movements not very successful
The company’s latest moves haven’t been the best either. The foray into podcasts did not go as planned. Apparently the way the two completely different services were mixed together didn’t sit well with many subscribers.
To this must be added the mess of March, when they decided to mix music, podcasts, audiobooks and videos, all in one source. Maybe, Apple may not have such an impressive subscriber base, but its app is all about music. Podcasts have a separate application, as well as classical music.
