SHARE
COPY LINK

BUSINESS

Losses widen for Swedish Spotify as costs and subscribers increase

The world's most popular streaming service Spotify has recorded wider losses on rising costs even though subscriber numbers beat expectations in the second quarter.

Losses widen for Swedish Spotify as costs and subscribers increase
File photo of Spotify's head office in Stockholm. Photo: Magnus Hjalmarson Neideman/TT

Between April and June, the Swedish giant suffered a net loss of 125 million euros, compared to 20 million euros in the second quarter of 2021.

In the same period, the number of paying subscribers rose by 14 percent to 188 million out of a total of 433 million including non-paying users.

The 19 percent increase in overall users is the largest ever in the second quarter, the company said.

Analysts had expected a loss of 127 million euros and a rise in paying subscribers to 187 million, Bloomberg reported.

The rise in paying subscribers confounded concerns that the rising cost of living would push consumers to cut back on non-essential spending such as entertainment.

Spotify’s operating losses hit 194 million in the second quarter, compared with operating profits of 12 million euros a year earlier.

Spotify blamed the losses on higher staff costs after expanding its team and new acquisitions as it widens its reach into the world of podcasts.

Spotify raised hackles earlier this year with a $100 million multi-year deal with controversial star podcaster Joe Rogan.

At the end of the second quarter, Spotify listed 4.4 million podcasts on its platform, a rise of 400,000 from the end of March.

The number of users that engaged with podcasts grew in the “substantial double-digits” year-on-year and “per user podcast consumption rates continued to rise”, it said.

Spotify expects operating losses of 218 million euros in the third quarter due to unfavourable exchange rates.

The euro has slumped against the dollar in recent months, triggered by the war in Ukraine and the mounting risks to the European Union’s economy, as well as a relatively slow increase of interest rates by the ECB.

Spotify shares rose 16 percent in morning trading on the New York Stock Exchange.

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.

SAS

SAS strike affected 380,000 passengers in July

More than 3,700 flights where cancelled and 380,000 passengers where affected by the 15-day strike which hit Scandinavia's SAS airline last month, the company has revealed.

SAS strike affected 380,000 passengers in July

“We sincerely apologize to our customers who were affected by the July strike,” Anko van der Werff, the company’s chief executive, said in a press release. “We are happy operations returned to normality again allowing us to start regaining our customers’ trust.”

According to the release, 1.3 million passengers travelled with the airline in July, which was still a 23 percent increase on the same month last year, when Covid-19 restrictions were still reducing tourism levels.

“In comparison with last month, the total number of passengers decreased with 32 percent and capacity was decreased by 23 percent, which was a result from the 15-day pilot strike,” the release read. 

Pilot unions in Sweden, Denmark and Norway, went on strike for 15 days last month over pay, conditions, and the company’s refusal to rehire pilots laid off during the Covid-19 pandemic on the same terms as before. 

The strike, which cost the airline between €9m and €12m a day, was ended on July 19th, after which it took several days to get flights back to normal

Van der Werff said company said it would now continue putting in place its restructuring plan, SAS FORWARD, and push ahead with restructuring in the US, where the company has filed for Chapter 11. 

He said these would both “accelerate the transformation process that will lead to a financially stable airline, that will be able to deliver the service our customers are expecting”. 

SHOW COMMENTS