Spotify Projects Slower Growth, 90 Million-Plus Subscribers by End of 2018

08 April, 2018, 03:20 | Author: Kristen Mcgee
  • Headphones are seen in front of a logo of online music streaming service Spotify

Updating the market this week, the company said it expected to generate revenue of around €5bn which would be a slowdown from the growth recorded in 2017, of 39%. Notably, Spotify anticipates that by the end of 2018 it will have anywhere from 92-96 million paid subscribers and upwards of 208 million active users.

Currently, Spotify remains the largest music streaming service around, with Apple Music considered as its closest competitor.

Streaming music leader Spotify Technology SA on Tuesday filed for a direct listing of its shares.

Richard Windsor, an independent financial analyst based in Abu Dhabi, said that, at first appearance, the outlook seemed created to give the company a very low hurdle it can clear easily in its early days as a public company. So many questions remain about Spotify, its long term business model and this route to the public. "There is going to be no institutional support for the stock if things go wrong in the early days". If it fails to perform its forecasts in its first few quarters as a public company, Spotify will reduce its chances of further raising capital. And if you need a specific date, pen that particular milestone for 3 April 2018.

Sinclair Broadcast Group is biased
Deadspin received a hat tip from HBO's John Oliver , whose " Last Week Tonight " did a lengthy story on Sinclair last season. Evidently, it's not just creeping Oliver out either; several celebrities have expressed their concerns about the company.

After the discovery, Spotify cut its monthly active user count from 159 million to 157 million, including 71 million subscribers for who pay $9.99 a month for the ad-free premium service. It also expects total MAUs to reach 168-171 million this month.

Operating losses for the full year should not cut as deep as 2017, the company said, amounting to a projected €230 million-€330 million ($286 million-$410 million), which would mark an improvement over 2017 when debt financing charges contributed to losses of €378 million ($470 million).

The "core to Spotify's pitch to investors" is an expectation for gross margins to rise from 21 percent to 25 percent over time, according to Recode. However, this is well below its long-term target of 30-35%. The information was revealed to regulators as Spotify prepares to take the company public via a direct listing, which will see Spotify's shares listed on a public exchange within weeks.

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