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Spotify’s Numbers Show Growth, and Maybe a Path to Profits

By The Wall Street Journal

As it prepares to make its debut on the New York Stock Exchange, the music-streaming service says it is prioritizing growth over profit

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  • In addition to subscriptions, I would consider streaming volume an important metric. They earn fixed monthly fees per user, but cost per user seems to be mostly variable based on the volume of music played. So, if I play more or less songs from one month to the next, then Spotify's gross profit on my $9.99/mth varies accordingly, (all other variables considered equal).

    Nevertheless, it's interesting that subscription fees make up 90% of their revenues today, but the subscribers are only 45% of their

    In addition to subscriptions, I would consider streaming volume an important metric. They earn fixed monthly fees per user, but cost per user seems to be mostly variable based on the volume of music played. So, if I play more or less songs from one month to the next, then Spotify's gross profit on my $9.99/mth varies accordingly, (all other variables considered equal).

    Nevertheless, it's interesting that subscription fees make up 90% of their revenues today, but the subscribers are only 45% of their active user base... And 50% of free users typically convert over the course of 3yrs. There's definitely runway for Spotify in the near term.

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