While streaming giant Spotify may have been the most popular way to listening to music in 2020, the platform suffered some major losses last year.
In 2020, Spotify lost an amount to the tune of $2.2 million per day, according to Music Business Worldwide. While billions of tracks are streamed on the platform daily, the company spent over $1 billion on sales and marketing in 2020, leading to the significant losses it suffered. Although Spotify closed out 2020 on a positive note, with 155 million paying subscribers recorded in Q4 (an increase of 11 million over Q3), operating losses came in at over four times the amount that the platform lost in 2019.
Total operating losses totaled $810 million. Net losses were slightly less grisly after a tax bump of roughly $153 million, though, and while the company did not turn a profit last year, Spotify’s share price tripled. Shareholders may face the bittersweet decision of either pulling out or seeing things through until the company can turn a profit.
Despite the major losses, Spotify CEO and co-founder Daniel Ek remains determined to put the platform’s growth ahead of profit for the time being.
“We’re in the growth stage, trying to capture that growth,” Ek told CNBC last year. Eventually we will get to more of a point of maturity where we’ll focus more on profit over growth, but for the next few years it’s going to be predominantly growth for us.”
