Spotify’s Continued Search for Profitability
When Spotify signed the Duke and Duchess of Sussex with an exclusive deal reportedly worth about $20m (£15.6m) in 2020, the royal couple were taking their first steps into the commercial world and podcasts were positively booming.
“…Spotify is reducing its reliance on the big celebrity signings and expensive original content that have weighed on its bottom line.” Spotify had let go hundreds of staff to help offset the $400 million it spent on acquiring podcasting companies.
The “overpaying and over-investing” has negatively impacted Spotify’s profitability with net losses reported over the last four (4) years and a $430 million loss in 2022.
Spotify’s first quarter (Q1) 2023 results reported a net loss of €156 million, which was “aided by lower marketing spend” (operational expenses) and improved gross margins (gross profit). The improvement in gross margins was influenced by the 14% year-over-year (YOY) growth in total revenue.
Why Spotify’s big bet on Meghan fell flat, BBC, June 17, 2023.
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