According to a report by Statista, the global music streaming market is expected to grow from $11.44 billion in 2018 to $14.79 billion in 2022 at a CAGR of 6.6%. User penetration was at 24.7% in 2018 and is expected to grow to 26.6% by 2022. Earlier this month, streaming music service provider Spotify went public. Here is a quick look at the Billion Dollar Unicorn player’s performance so far.
Sweden-based Spotify was founded by serial entrepreneur Daniel Ek and Martin Lorentzon. Its service was launched in 2008 when global music industry revenues were declining due to growth in piracy and digital distribution. While listeners were still listening to music, the artists needed a better way to monetize their music and consumers needed a legal and simpler way to listen. Spotify was set up on the belief that streaming music was beneficial to both artists and music fans.
Spotify operates on a freemium model allowing access to an ad-supported streaming radio service. Customers can also select a paid subscription that grants them unlimited online and offline, high-quality, ad-free streaming access to its catalog. Membership fee is $9.99 a month. Spotify is present in 61 countries and territories. It has a monthly active user base of more than 159 million subscribers, which grew 29% over the year. Its Premium Subscribers have grown 46% over the year to 71 million. Spotify claims that its premium subscriber base is nearly double that of the Apple Music subscriber base. Spotify accounts for the largest global streaming market share by revenues. It accounted for 42% share in 2016, and had 41%, 42%, and 59% in the US, Brazil, and United Kingdom markets, respectively.
Spotify has seen strong revenue growth over the past years. For the years ended December 31, revenues have grown from €1.94 billion (~$2.38 billion) in 2015 to €2.952 billion (~$3.62 billion) in 2016 to €4.09 billion (~$5.02 billion) in 2017. During the same period, net losses grew from €230 million (~$282.39 million) in 2015 to €539 million (~$661.78 million) in 2016 to €1.235 billion (~ $1.52 billion) in 2017.