Spotify's revenues nearly hit €2 billion last year (passing the $2bn mark) - but its losses also grew.
The streaming service's revenues rose 80% in 2015, to €1.95bn, with subscriptions making up the majority - up 78% to €1.74bn.
That said, advertising revenue, though small, rose faster. With ads played to users on the free tier of Spotify, advertising revenue rose 98% - nearly doubling - to €196 million.
In a financial filing in Luxembourg, the Stockholm company said to investors that "in many ways, it was our best year ever”.
It also called itself: "The No.1 pure play music service – the second largest revenue source to the music industry, both globally and the US.”
2015 highlights also saw Spotify's monthly active users jump 50% to 89m - with paying subscribers totalling more than 28m, or almost a third of users.
So: just under a third of Spotify's users contribute to nearly 90% of its revenues.
The company's net loss for 2015 stood at €173m, up 6.8% from €162m in 2014. Naturally for a streaming service, its biggest cost is payments to the music biz - categorised as ‘royalty, distribution and other costs’ in its annual filing, those reached €1.63bn in 2015 – up 85% year-on-year.
Crunching the numbers, it looks like 83.6% of Spotify's revenue went back into the music industry.
“We believe our model supports profitability at scale," read the company filing. “We believe we will generate substantial revenues as our reach expands and that, at scale, our margins will improve. We will therefore continue to invest relentlessly in our product and marketing initiatives to accelerate reach.”
It added: “Music has mass market appeal – and, as such, we believe we are just at the beginning of a much larger market opportunity, benefiting from significant first mover advantages.
“Subscription-only models have not yet proven scale and free user models, while scaling, have not proven a path to profitability. Spotify has the combined power of both.”
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