Pressure mounts for Spotify with reports of tripled losses over past two years
2015 is set to go down as the year of the great streaming battle, but its golden boy Spotify is facing its own problems here in the second quarter. With TIDAL‘s recent launch showing a positive swell for Spotify downloads in the wake of its topical PR run, reports have shown losses of $197 million for Spotify in 2014, tripling its losses despite mustering a promising $1.3 billion in revenue last year. The timing is far from ideal.
Paired with recent indications that TIDAL is in a good position to rival its royalty payouts and increased pressure from labels for the streaming giant to drop its ‘Freemium’ model, these aren’t the kind of headlines Spotify needs ahead of Apple’s cloak-and-dagger preparations to launch their own streaming service later this year. Whilst Time Magazine associated the losses with the company’s recent focus on product development, expansion and licensing, whispers of their entry into the video market could significantly up-the-ante in this arms race for streaming domination. The question still remains: with 60m total users and only 1/4 of them paid, could mounting pressures surrounding free-streaming spell game over for the Swedish-based market leader? Spotify is by no means out for the count, but the next six months are sure to prove a challenging stretch for the original streaming powerhouse and its bid to stay at the top of the industry.