Money has been pouring out of the bag for Spotify. It is very difficult to yield a profit on music streaming for only $10 a month. Compared to the previous year, a drastic increase was noted, however, the streaming music lost around $197 million in 2014.
In 2014, Spotify acquired a revenue of $1.3 billion, yet they are incapable of turning it into a profit. In fact, the losses are displaying a rise in the graph and they are getting worst day by day. The losses have tripled since 2013 and the company lost around $68 million in figure.
The Times reported that the Spotify authority placed the blame on product development and expansion. Among the 60 million users in total, only 15 million have paid for the services, in Spotify.
Numerous artists have complained that Spotify does not compensate the artists and it has become an issue to be worried of. In November 2014, Taylor Swift reportedly claimed that she has drawn back her music off the service. Although Spotify have requested the artist to return back to them, it is now clear and indicates why Spotify needs the artist more than she needs Spotify.
Competitors like Jay-Z’s tidal and Apple’s Beats is making it even harder for the service to be in its place. Although Apple’s Beats wants payment for its streaming music service, they are also keen in delivering several ways to let people listen to their choice of music for free.
Apple will provide a free trial period of music streaming, ranging from one to three months, but they will let music owners upload sample songs which the subscribers will be able to listen for free. Unlike the competitors, which are mostly YouTube and Spotify, Apple does not intend to provide unlimited on-demand streaming for free. Executives have reported that free streaming won’t generate enough money via advertising.
