Spotify in the red as 2009 losses dwarf ad revenue

Spotify Limited, part of the Spotify group, generated European advertising revenue of £4.5m during 2009, but finished the year with heavy losses and net liabilities of £6.9m.

Daniel Ek and Martin Lorentzon: Spotify founders
Daniel Ek and Martin Lorentzon: Spotify founders

Spotify Limited is a key part of a group of companies that make up the popular online music destination's empire. It is a subsidiary of Spotify Technology, which is incorporated in Luxembourg.

It operates and provides the music service for all European consumers and is the main advertising sales entity for the European market.

The company's 2009 accounts show it had "over 250,000" paid subscribers from seven million users at the end of the year.

Subscription sales generated £6.8m, up from £380,541 in 2008, which made up the lion's share of £11.3m in total revenue.

Advertising revenue exploded from £2,200 in 2008 to £4.5m last year.

However, the company made an operating loss of £16.4m after factoring in the cost of sales of £18.8m, administrative expenses of £8.3m and distribution costs of £609,000.

Current liabilities of £20.9m outweigh the company's total assets of £14.1m (including current assets of £13.6m).

The parent company, Spotify Technology, intends to provide ongoing support to Spotify Limited, according to the directors' report signed by founder Daniel Ek on 10 November.

The report states that Spotify Technology is currently negotiating further funding to support its growth plans. The plans are not yet finalised but the directors are confident they will successfully obtain the support they need.

A Spotify spokesman declined to comment further on the funding situation but provided the following statement:

"2009 saw us focus on establishing a new and innovative music service and bringing it to millions of people across Europe. The groundwork laid in our launch year has been crucial to the significant achievements made in 2010. Further strengthening and expansion of the service remains our top priority."

Have your say...

Before commenting please read our rules for commenting on articles.

If you see a comment you find offensive, you can flag it as inappropriate. In the top right-hand corner of an individual comment, you will see 'flag as inappropriate'. Clicking this prompts us to review the comment. For further information see our rules for commenting on articles.

comments powered by Disqus
Media Week Jobs
Search for more media jobs

Latest

WPP confirms search has begun for Sorrell's successor

WPP confirms search has begun for Sorrell's successor

WPP has begun to look at external candidates to replace Sir Martin Sorrell as the chief executive of WPP, the company confirmed today.

Share
VR is dead, long live VR

VR is dead, long live VR

VR has huge potential but it's time to admit that we don't actually know what to do with it, writes Dino Burbidge, director of technology and innovation, WCRS.

Share
The quirky, wonderful and eye-widening world of C2
[Sponsored feature]

The quirky, wonderful and eye-widening world of C2

Say goodbye to stale buffet food, dowdy carpets and middle-of-the-road speakers. C2 is the first conference of its kind...

Share

Get news by email