Photo: Ellis Hamburger, Business Insider
Spotify is projecting that it will generate $889 million in revenue this year, TechCrunch reports.That’s pretty impressive. It’s a real business.
However, it lost $60 million last year, and that loss is expected to grow.
It’s not good to be losing money, but in relation to how much revenue it’s generating, it’s OK for now.
On the matter of profits, Ek told Swedish newspaper Dagens Industri:
“No, the question of when we’ll show a profit actually feels irrelevant. Our focus is entirely on growth. It is priority one, two, three, four and five. But of course we expect that in the long run to make profit.
“We know we are making money on each new user we get, whether it’s a free user or paying. Therefore, all user growth positive for us.”
He’s right. Spotify shouldn’t be worried about profits right now. It has plenty of money in the bank to figure out the business plan. The only problem is that Spotify has to pay out so much money to record labels it might not ever be able to turn much of a profit.