Digital

We7 and Spotify profits (well, losses) revealed

By | Published on Monday 10 October 2011

We7

Thanks to Music Ally, which has been doing some Companies House digging, we know how the UK’s two main streaming music services, We7 and Spotify, are doing financially.

In the last financial year We7 saw revenues rise to £965,374, and reduced losses to £2.97 million. At one point it was suggested We7 was breaking even month on month through ad sales, which doesn’t seem to be the case, though things are moving in the right direction I suppose. And, of course, recent changes so that free users can only access the cheaper-to-run interactive radio service as opposed to full on-demand streaming should reduce the company’s costs considerably. Providing user levels and ad sales can be sustained with just that service – which We7 reckons they can – it should certainly help the company move somewhere near profitability.

As for Spotify, revenues shot up in 2010 – £45 million from subscriptions and £4.5 million from advertising – resulting in a 458% revenues increase overall. Good times. Though, alas, losses were up too, from £16.61 million in 2009 to £26.54 million in 2010. Although these figures are for Spotify’s UK company, and not the parent company Spotify Technologies, those figures account for most of the streaming music company’s operations, because most of the European business is run through their London entity. Of course Spotify has also since reduced the running costs of their freemium service, which, even if it has a negative impact on ad sales, should have a positive result overall, reducing costs and driving increased subscription sales.



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