Leading multi-platform music-streaming app Spotify has finally turned its luck around and will likely report its first profit when it publishes the 2010 results later this year, according to industry expert Martin Scott at Analysys Mason.
After halving the amount of hours and music plays free users have access to in May and losing over a million users, Spotify has managed to gain 500,000 paid subscribers to their Premium service, which offers uninterrupted, unlimited music play.
Pouring money down the drain
Beloved by music geeks all over Europe since it first started in Sweden in October 2008, Spotify has been steadily losing money and some experts had feared its end was nigh after it reported losses of £17 million in just the UK alone.
Despite garnering 5.75m users and earning advertising revenues to the tune of £4.5m last year, Spotify had to pay a whooping nearly £40m in royalties to record labels in order to offer a big enough catalogue to fans.
Since Spotify makes three quarters of its money from subscriptions and advertising, a new strategy had to put forward to convert free users to paid ones.
Going by the £52m revenues it is expected to report this December, minus operating costs this puts it in line for a modest profit of around £1m.