Music and video streaming service company Spotify recently announced via Twitter that the company’s number of paid subscriptions has already reached more than 50 million. The sudden boost in number of subscribers indicates around 25% in growth in just around a span of six months.
With Spotify’s stronger market presence and higher reach, it has once again advanced its lead against rival, Apple Music.
Spotify was launched in 2008, and last September had around 40 million subscribers, while Apple Music reported 20 million subscribers in December, since its first takeoff less than two years ago.
Meanwhile because Spotify is not a public company, it did not release any specific profit data as it spends to grow internationally. Although, several market analysts speculate the possibilities of Spotify going public and launching an initial public offering soon, due to its fast-paced growth in the industry. The ability of the streaming company to boost subscriptions and maintain a sustainable business is part of the reasons why several investors believe for a likely IPO. Still, there is not an assurance for this to happen anytime soon.
Since Spotify is an unprofitable business, it gets most of its sales from subscriptions, although it can still generate earnings from free subscriptions through advertising. The company’s standard subscription fee for a month costs $9.99, but also has promotions and discounts, such as a $4.99 special plan for students.
Last month, Spotify announced its plans of expansion to at least 4 World Trade Centers in New York City. With the expansion, Spotify said that it will likely created 1,000 more jobs in New York amid the opening of their headquarters in the state, while still retaining 832 positions in the company currently working out of the company’s Manhattan office.
According to Spotify, the 1,000 jobs created will also include engineers, marketing staff, analytics, and other business management related positions.
The streaming sector of the music industry in the US has proven to have grown rapidly, recording the single highest source of revenue in the US recorded-music industry, racking in around $1.61 billion. Major record labels Universal, Sony, and Warner all posted strong earnings driven by the streaming features. Streaming also contributed a total of $5.4 billion in global record sales, out of the overall sales of $16.1 billion.
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