Spotify passes 600 million monthly active users/members for the first time in its history.
Indeed, the company reported 379 million ad-supported subscribers, a growth compared to 295 million in 2023.
The company also reported 236 premium members in 2023, compared to 205 million premium members in 2022.
The company is focusing on launching its audio platform.
Read Also: How Does Spotify Make Money, Spotify Model, Who Owns Spotify, How Does Twitch Make Money, How Does SoundCloud Make Money, Who is Daniel Ek?, Who Is Martin Lorentzon?
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Spotify Business Model
Spotify is a two-sided marketplace, running a free ad-supported service and a paid membership. Founded in 2008 with the belief that music should be universally accessible, it generated €11.7 billion in 2022. Of these revenues, 87.4% or €10.25 billion came from premium memberships, while over 12.6% or €1.47 billion came from ad-supported members. By 2022, Spotify had 489 million users, of which 205 million premium members and 295 million ad-supported users.
Spotify Advertising Business Model
Spotify Audience Network is the underlying advertising infrastructure that supports its ad-supported user base. The Spotify Audience Network was born as the result of the acquisitions of Anchor and Megaphone. By 2022, Spotify had 273 million ad-supported users.
Economics of the Spotify Business Model
Spotify licensing deals affect its business model. The company runs on both a free service, which is ad-supported and a subscription premium service. They have different economics.
The ad-supported business had a 10% gross margin in 2021, compared to 29% of the subscription-based business. That’s because the more the content gets streamed on the platform, the more that increases royalty costs for Spotify. That is also why the company invested in developing its content. Thus, in part transitioning from platform to brand.
The Spotify Model is an autonomous approach to scaling agile, focusing on culture communication, accountability, and quality. The Spotify model was first recognized in 2012 after Henrik Kniberg, and Anders Ivarsson released a white paper detailing how streaming company Spotify approached agility. Therefore, the Spotify model represents an evolution of agile.
Who Owns Spotify
The multi-billion music streaming company Spotify is primarily owned by its founders, Daniel Ek and Martin Lorentzon.
As of 2022, Daniel Ek has 16.5% ownership of ordinary shares and 31.7% of the voting power.
Martin Lorentzon has 10.9% of ordinary shares and 42.6% of the voting power.
Another key shareholder is Baillie Gifford & Co, a Scottish-based money management firm, followed by Morgan Stanley, T. Rowe Price, and Tencent.
Spotify Revenue
Spotify Users
Is Spotify Profitable?
Spotify is not profitable. The company’s net loss in 2022 was €430 million, compared to €34 million in losses in 2021, and €581 million net losses in 2020.
Spotify Cost Structure
Spotify ARPU
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