Future of...
Spotify has a relatively good conversion rate, with around 25% of their active users being premium users. Active users are the users who not only register but actively use Spotify to 'play' music. Therefore the key question for Spotify is whether they are able to convert active users of the free version, who currently make up around 75%, to a premium user.
Spotify would appear to be a positive service within the music industry as it actively encourages people to listen and pay for music in a way that helps consumers, artists and labels. This has been disputed by a number of artists including Taylor Swift who argue that there talent isn't financially rewarded by allowing their music to be part of Spotify's library. The service is an attractive proposition as it enables users access to the latest music as well as many of their favourite artist's full discographies but Spotify must continue to work hard to ensure that their service represents good value for the consumers and the artist.
The music streaming market continues to see growth, with Spotify witnessing increasing revenue largely because of this. However, Spotify have been unable to turn a profit despite rising revenues. Huge operating costs mean they are currently making a loss despite the growth in people using their software and growth in the market itself. This surely presents an issue for Spotify to address in the coming year as they look to make a profit and ensure they can benefit from their growth and rising revenue.
Spotify would appear to be a positive service within the music industry as it actively encourages people to listen and pay for music in a way that helps consumers, artists and labels. This has been disputed by a number of artists including Taylor Swift who argue that there talent isn't financially rewarded by allowing their music to be part of Spotify's library. The service is an attractive proposition as it enables users access to the latest music as well as many of their favourite artist's full discographies but Spotify must continue to work hard to ensure that their service represents good value for the consumers and the artist.
The music streaming market continues to see growth, with Spotify witnessing increasing revenue largely because of this. However, Spotify have been unable to turn a profit despite rising revenues. Huge operating costs mean they are currently making a loss despite the growth in people using their software and growth in the market itself. This surely presents an issue for Spotify to address in the coming year as they look to make a profit and ensure they can benefit from their growth and rising revenue.
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