Windfall on the cards for Spotify staff
Published: 12 Aug 11 13:37 CET | Print version
Online: http://www.thelocal.se/35510/20110812/
Employees of online music streaming service Spotify who took up the option to buy shares are set for a huge windfall.
- Spotify service fails on music quality: report (22 Jul 11)
- Spotify aims high after US launch (15 Jul 11)
- Spotify signs deal with Virgin Media (7 Jul 11)
Those that did take up the offer have made a handsome profit – those shares are now worth 2,500 kronor a piece and the employees share of the company is now worth some 293 million.
It is a significant boost for the company, which has recently launched in the U.S. In less than 18 months Spotify’s valuation has tripled, to what analysts now estimate to be around 7 billion. Much of this can be attributed to an injection of capital from Russian Digital Sky Technologies and the American companies Kleiner Perkins and Accel.
However the company is still making heavy losses. The mother company, registered in Luxembourg posted losses of 293 million for 2010.
In Sweden things look more promising. In 2010 the Swedish subsidiary Spotify AB recorded sales of 165 million and made a profit of 50 million - compared with sales of 90 million and a 14 million profit the year before.
Meanwhile, Spotify Sweden AB, which takes care of ad sales, made sales of 87 million and a profit of 12 million.
What do you think? Leave your comment below.
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shame spotify isn't making so much money though, it has changed my music listening completely, haven't bought a cd or mp3 in 3years.
After all 3 other articles headline 'Man rapes girl' , 'Man murders child' etc. etc..
So - is it ok to identify Men when they commit a crime, but not when they do all the innovation and nation/economy building?
And why not the color and religion of the men? Is that not relevant as well?
It's so obvious that Sweden is 'anti man' this has to be some kind of joke ...
Plus, I'll be dollars to donuts that Pandora issues all employees options as part of their compensation package and not trying to sell it to them, thereby effectively reducing their development/labor costs. That might work in Sweden, but in the US they won't get anybody but the most desperate/least talented developers working for them.
Finally, with the exit of one of their major music catalog providers the labels are going to start seriously re-evaluating this service and the royalty payments, which is going to put even more pressure on Spotify's business model. Not to mention the patent infringement lawsuit by Packet Video (which, I've read, and they probably won't win it but they'll bleed Spotify of even more money trying to fight it). With that said, I like Spotify and use it...despite several weaknesses it has...they should really treat the employees better and offer stock options upfront instead of doing a yearly sell based on whatever their most recent valuation is at the time. They have enough cash in the bank to not go around shaking their tin cup to their employees who are, undoubtedly, already working day and night to make it successful.