Spotify subscriptions pump up revenue, but operating loss widens

STOCKHOLM: Spotify’s revenues rose 80 percent in 2015 as it gained more subscribers for its music streaming service, but heavy spending on product development and international expansion meant a bigger operating loss.
The privately-owned Swedish firm, global market leader with more than 30 million paying users, is facing tough competition from others such as Apple Music and Alphabet Inc’s Google, which offers YouTube and Google Play Music.
Filings obtained by Reuters from Luxembourg’s company registry on Tuesday showed Spotify’s revenues rose to 1.9 billion euros ($2.1 billion) in 2015, almost double the pace of growth from the previous year.
Subscriptions made up the bulk of revenues, while income from advertising nearly doubled to 195 million euros.
However, the Stockholm-based company, which provides free on-demand music or ad-free tunes for paying customers, made an operating loss of 184.5 million euros in 2015, compared with 165.1 million in 2014.
Spotify attributed its loss to substantial investments in product development, expansion and new personnel. Of its global staff of about 2,000, half are based in Stockholm. The company is registered in Luxembourg, where it files its financial reports each year.