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Last year, I did a back of the envelope estimate of revenues for Spotify for 2010 at $134 million, of which $80 million came from subscriptions and the rest from advertising. It’s time for a mea culpa: I blew it. According to data obtained by industry blog Music Ally, the company brought in $99 million in total revenues, of which about $71 million came from subscriptions and $28 million from advertising. The company that saw its sales grow 458 percent from 2009 lost about $42 million versus the $26 million it lost in 2009.
While my subscription revenue targets weren’t that far off the mark (wrong none the less), the advertising revenue shortfall is scary and should give everyone who wants to offer an ad-supported music service a pause. Spotify since has launched in the U.S. and is tightly integrated with Facebook. It now has about 2 million subscribers and 10 million users. Music Ally estimates the company will turn profitable this year.