This week–and for the first time in 18 years–Spotify has turned a profit.
Spotify is finally profitable, almost two decades after it was launched. Yes, there have been quarters where it eked into the black, but 2024 is the first time the company has been profitable for a full year. Net operating profit was €1.37 billion (almost CAD$2 billion).
Its stock shot up US$72 yesterday, closing at US$621.77, giving the company a capitalization of US$124 billion.
Where did all this new money come from? The closure of TikTok Music, which operated in some key “Rest of the World” countries like Indonesia, Australia, Singapore, Brazil, and Mexico. You also have to wonder how Spotify’s new policy of not paying out for songs with less than 1,000 streams added to the pile of money. Yes, it’s just money, but with tens of millions of songs falling into that category, the pennies add up.
Royalty payments have been slashed in another way. By becoming a home for podcasts, Spotify attracts and keeps users in a way that doesn’t require them to pay out royalties on music.
A few more facts:
- 675 million people use Spotify with 263 million paying for a subscription.
- Latin America and “Rest of the World” is home to 56% of Spotify’s users. The shift away from Europe and North America continues.
- Speaking of which, 27% of users are from Europe, down from 35%. In North America, it’s just 17%. But if you do the math, user numbers continue to grow.
