Spotify expects losses of more than 200 million euros in 2019

Spotify expects losses of more than 200 million euros in 2019

The results of the last quarter of Spotify have not been bad, but the truth is that the forecasts for next year do not point to positive figures. And it is not easy if you want to continue challenging the giant Apple, which has also gotten on the streaming music train for a long time.

But let's look at the data. The latest report for the fourth quarter of the year reveals that the company has increased revenues by up to 30% , to reach 1,500 million euros. They owe it all to their subscribers, who have grown considerably.

Thus, Spotify closed the year with 96 million paying users, nine more than in the previous quarter and 36% more than a year ago. And it is that 90% of the company's income comes through user subscriptions. Free services are covered only by advertising. Thus, ad revenue reached 175 million euros in the last quarter, with an annual increase of 34%.


Expected losses of between € 200 million and € 360 million in 2019

The company predicts that, despite the positive results of this last quarter, in 2019 there will be losses valued between 200 and 360 million euros . Spotify has explained that its current priority is growth, over profitability.

In fact, some slowdown has already begun to be detected. Average revenue per user fell as much as 7% in the last quarter of the year. This percentage is directly linked to the increase in the number of cheaper subscriptions, which exceed those that are more expensive.

So given these data, investors have not been slow to show their concern. Sales in 2018 increased 29% . It would not be a bad figure if we did not compare it with the growth of 2017, which reached 2017 and that of 2016, which reached 52%.

For now, there is no doubt about that, Spotify continues to be at the top, with 96 million paying subscribers.  This has been the case since it began operating in 2008. Currently, Apple Music is on its heels with 50 million paying subscribers, one of its strongest rivals, which has been operating in the market since 2015.

On the other hand, Spotify has experienced a reduction in the price of its shares, which has fallen by as much as 6% from the price registered in April 2018 on the New York Stock Exchange.


207 million unique users per month

One of the news that Spotify did not expect has to do with the number of unique monthly users of the service. Here are counted, within the same bag, those who pay and those who do not. So if you are one of those who do not have the paid or premium version contracted , you will be registered here.

In any case, today we have also learned that the number of monthly unique users has reached 207 million, which means 29% more . The company's forecasts in this regard were between 199 and 206 million users, so this is good news for Spotify.

The firm has explained that they have grown above expectations in almost all markets. The reason is directly related to their strategy, because they say they have improved the way they retain users. One of the markets in which it has been most successful is Latin America. Additionally, Spotify is now in 13 new markets, reaching 78 countries globally.