Despite being the undoubtable king of the music streaming space, Spotify has long struggled to become profitable, reporting hundreds of millions of euros of net loss year after year. However, the Swedish streaming giant is on track for a new milestone, recording its first year of profit-making.
According to data presented by OnlyAccounts.io, Spotify reported a net profit of €471 million in the first half of the year for the first time since its launch.
Over 26 Million New Premium Subscribers Fueled the Spotify’s Profitability Growth
Spotify has been close to becoming profitable many times since its launch in 2008, most recently in 2021, when the streaming services skyrocketed amid the coronavirus pandemic. Although the company’s revenue surpassed one billion euros for the first time in 2015, Spotify’s net loss amounted to €230 million that year, mostly due to royalty fees the platform pays to the music artists and license holders, which make up a significant part of its expenses.
The following year brought even worse figures, with the company’s net loss rising to over half a billion euros for the first time. Unfortunately, that was nothing compared to the figure reported in 2017. That year alone, Spotify’s net loss skyrocketed to over €1.2 billion. Although the following years saw much smaller figures, the streaming giant still ended 2023 with a massive €532 million net loss, similar to figures reported in 2020 and 2022.
However, thanks to double-digit user growth, especially of its Premium subscribers, 2024 could be a pivotal year for the Swedish company. Between June 2023 and June 2024, the platform added over 26 million new Premium subscribers, pushing their total number to 246 million. The total number of users jumped by 75 million in this period and now stands at 626 million.
This massive increase in the number of paying users has helped the company’s Premium revenue to jump by 21% year-over-year and hit €3.35 billion in Q2 2024. A less positively connotated factor contributing to Spotify’s profitability is the huge number of layoffs the company made in the past two years. Statistics show the Swedish streaming service has fired more than 2,300 people so far, reducing its pre-2023 workforce from around 10,000 to around 7,400 by the end of June 2024.
Spotify’s Accumulated Loss is Still over €4.3 Billion
Although 2024 is on track to become a pivotal year for Spotify, with the company reporting the first-ever half-year profit, its accumulated loss in the past fifteen years is still massive. Since 2009, the Swedish streaming platform accumulated a net loss of over €4.2 billion, or ten times more than the profit reported in H1 2024.
Still, with 226 million Premium subscribers, Spotify beats all other major players in the market. In comparison, YouTube Music and Apple Music count twice as less paying users, and Amazon’s music streaming service even three times less.