Despite rising losses, Spotify is fighting for the future of free streaming.

    From year to year, the Spotify streaming service suffers losses. At the same time, the company's revenue is growing rapidly. So, in 2014, Spotify's revenue amounted to $ 1.3 billion, which is 45% higher than the previous year. At the same time, its net losses in 2014 increased from $ 68 million to $ 197 million. The company announced this on Friday, May 7.

    Nevertheless, the number of Spotify employees in 2014 increased from 958 to 1354. The service is available in 58 countries. Users are offered 30 million musical compositions and two subscription options: free listening with compulsory viewing of advertising or a subscription price of $ 10 and listening without advertising.

    As of the end of 2014, the number of paid subscribers to the service amounted to 15 million, and free - 45 million. Thus, Spotify has become the most popular streaming service for listening to music, reports The New York Times. The company earns 91% of revenue from subscriptions and only 9% from advertising.

    However, the possibility of free listening to music is the subject of much debate. Over the past few months, top executives at major record companies have come under harsh criticism. Allegedly, the possibility of free streaming is the main reason that the service incurs losses. Such a situation may complicate Spotify's relationship with music labels and become an obstacle to renewing their license agreement. Last fall, Spotify CEO Daniel Eck said that since its founding (2008), the company has spent $ 2 billion on royalties.

    According to representatives of Spotify, the possibility of free listening is an important tool to attract new users. After all, subsequently, some of them begin to use paid options.

    Spotify's main competitors are Deezer and Rhapsody . In addition, next month Apple plans to launch its streaming service. For some strange reason, Apple’s leadership regarding free streaming is the same as that of record companies.

    To survive, Spotify began negotiating with media holdings, broadcasting networks, and video content publishers. Sources familiar with the negotiations believe that Spotify will soon offer users a new feature - video streaming. This assumption is reinforced by the fact that the company announced its readiness to report the latest news to the press. A meeting with media representatives is scheduled for May 20.

    Megamind has already written that Spotify’s deal with Goldman Sachs investors, the Abu Dhabi National Welfare Fund and some others could be another significant event. The estimated investment is $ 400 million. If the deal goes through, Spotify's valuation will exceed $ 8 billion.

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