South Africa: Spotify’s Stagnant Subscriber Growth Causes Shares To Fall
The company closed off the most recent quarter with 108 million subscribers on its premium service, a figure just below the 108.5 million that had been forecast by analysts and far below Spotify’s internal forecast.
The CEO of the music streaming company, Daniel Ek, said that what’s done is done and that the streaming giant would be sure to make up the lost ground by year-end.
Ek added that Spotify had seen positive growth in all other areas except for the number of subscribers.
Spotify is the world’s largest paid online music platform, and investors have high expectations for it.
The company’s overall user base grew to 232 million, beating Wall Street’s projections of about 227 million. The majority of those people are using the free, advertising-supported version of Spotify.
The company also said it recently signed agreements with two of four leading record labels regarding licenses. Achieving long-term profitability from the current losses will depend in a big way on the new royalty arrangements that Spotify is negotiating with the major music labels.
Through these deals, Spotify intends to create new tools and services which will become new sources of revenue.
Credit: This article originated from www.mybroadband.co.za