Spotify 2014 earnings; is video in the 2015 picture?

Spotify’s 2014 revenue totaled €1.08 billion ($1.1 billion), according to Reuters, which obtained financial data for the streaming platform’s holding company from the Luxembourg company registry. That figure marked a 45% increase over the previous year’s sales of €747 million. Spotify’s operating loss for the year was €165 million, compared with a loss of €91 million in 2013. The greater losses were chalked up to investments in product development, international expansion, and staffing.

The news about finances is coupled with rumors of a new angle for Spotify’s business. Unnamed sources told The Wall Street Journal (paywall) that the streaming audio company is making preparations to expand into online video. Spotify has reportedly approached both traditional media companies and the multichannel networks that create and distribute YouTube videos about partnering for the video space.

Assuming rumor legitimacy, a video angle makes sense as a differentiator. Most on-demand music services (Spotify, Beats Music, Rhapsody, Deezer, and others) are modeled similarly, with feature sets that offer pretty much the same user values. YouTube’s popularity as a music platform and discovery outlet likely does make video attractive to Spotify, perhaps especially if partnering with video networks could add new dimensions to the music catalog (e.g. concert performances).

The addition of video would probably require capital outlay in content and product, so the timing of this report is interesting, coming soon after Spotify closed a $350-million funding round.



RAIN News Staff