Spotify has become a must have of millennials nowadays, and little by little it’s starting to become viral. According to data published by the company, the number of premium subscribers has not stopped growing during the last years, the same happens with the free subscribers. The great advantage of having a large base of free subscribers, is that it makes the application an unbeatable medium for third parties interested in launching marketing campaigns through its platform, representing a key opportunity for Spotify’s expansion strategy.

The IPO of the streaming music platform, announced by the company itself last December, still has no confirmed date but everything indicates that it would occur during the first week of April. The operation will be carried out in a very particular way since it will not involve the sale of new shares and the value will start trading immediately, according to the price assigned by the market. History shows that the first days of negotiation generates large volumes of transactions and opportunities in the short term.


Let’s start with the negative points, among which we can name 3. First, we must acknowledge that the company increased its income by 40% compared to the previous year, however the losses doubled. Secondly, 70% of the expenses of the company is destined to the payment of rights of the record companies and great part of its music comes from only 3 of them; Universal, Sony and Warner. And thirdly, we must not forget that this type of company takes several years to achieve profitability, depending on the expectations of generating future income.

On the other hand, we must also highlight the points in favor. Spotify is a leader in its sector over Apple Music, Amazon Music and Pandora Media. In addition, we must add that 90% of revenues comes from premium users and their subscription rate does not stop growing. A very important fact is that the rate of abandonment of the service has decreased in recent years, showing a great improvement of customers loyalty.

That said, in less than a month we will have the figures to analyze the company and give our independent opinion about Spotify.


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