At the moment there are no profits, but the value of Spotify - the web platform that offers music on demand - could increase from 3 to about 4 billion dollars.
According to the Wall Street Journal, the music streaming site has raised $250 million from a group of investors led by Technology Crossover Venture. Spotify would like to use the new funds to speed up the internationalization process.
The platform is already at home in 32 countries, including Italy and, above all, the United States, where the French competitor Deezer intends to land in 2014. The intention, now, would be to conquer other markets, such as Japan .
The Swedish company is facing opponents such as the aforementioned Deezer, and then Pandora Media, Apple's iTunes Radio and, among others, Google, which is preparing to launch a similar service.
Everyone wants a piece of the pie, which keeps getting bigger every year. Revenue from subscribers topped $5 billion this year, up from $46 billion in 2018, according to a study by Abi Research.
The ongoing war in the sector is eroding profits, with groups investing more and more to enrich the offer. Spotify, which generated 435 million euros in revenue, saw its losses mount last year. Rival Pandora, valued at $5,7 billion on the stock exchange, is in the same situation. The service, which invested heavily in its catalog and marketing, ended the third quarter with a $1,7 million loss, versus a $2,1 million profit a year earlier. Meanwhile, revenue increased by 50% to over $180 million.
The music streaming phenomenon is only just beginning, assures Will Page, chief economist of Spotify, "in the long run, the profits from the service will be much higher".
