Weekly New/Digital Media (12)

Spotify UK revenues surge to almost £190m as mobile subscriptions take off

Spotify UK revenues surge to almost £200m as mobile subscriptions take-off
My summary:
"World’s biggest music streaming service saw total UK revenues rise by 18% from £159m to £187.2m last year". A huge increase in the consumption of spotify making them vast amounts of money!  The company explains this as “This increase can be attributed to the transition from desktop to mobile as today the majority of new users signing up for Spotify are mobile,” A increase due to subscription increase despite the decrease in ad revenue.

Key statistics:

  • Revenues at Spotify’s UK business grew to almost £190m last year as subscription income soared by over 40%
  • the world’s biggest music streaming service with an $8.5bn (£6.9bn) 
  • UK revenues rise by 18% from £159m to £187.2m last year. 
  • 44% surge in subscription revenues from £119m to £171m.
  • Subscription income accounts for over 90% of Spotify UK’s total revenues,
  • Only 10% by adverts
  • Last year, ad revenue fell slightly from £11m to £10.8m.
  • access to more than 30m songs and charges a fee of £9.99 a month for its premium subscription service
  • adverts for free service
  • The UK company made a small pre-tax profit of £2m, up marginally from £1.67m in 2014, while globally the business made a loss of €173m (£156m) last year
  • Operating profits in the UK grew from £674,000 to £6m.
  • Spotify UK’s cost of sales rose 20% to £149m.
  • 100 million users worldwide, of which 40 million are paying subscribers
  • Staff numbers in the UK grew from 167 to 180 last year, with 144 employees listed as working in sales and marketing.
  • staff bill grew from £12.3m to £13.7m; the highest paid unnamed director received £151,000


My opinion:
This story highlights just how valuable loyal audiences who are willing to pay premiums are useful for making profits for a company, way more than ad revenues. It seems that adverts seemed to have a higher value in the past, this decrease may be due to consumers increasing dislike for adverts that make them unappealing for firms to include too much of in the first place, especially with technological advances such as ad blocking software. It is also visible that marketing and sales jobs are receiving more and are playing huge role in today's society, highlighting the importance of a large audience research and making existing consumers loyal to brands, brand image is of huge importance, especially within the media industries. It also highlights the divide of media consumption around the globe, the UK paying more, potentially a western culture impact or perhaps due to the marketing and word of mouth.

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