Spotify now has more than 60 million paying users, while sources reckon that the streaming music firm will list on the New York Stock Exchange in quarter four providing Warner Music signs on the dotted line with a new multi-year licensing deal.
Spotify last updated its official premium subscriber count in March when it passed the 50 million benchmark. It quietly updated that figure to 60 million on its website yesterday, amid further chatter about the firm’s plans to become a publicly listed enterprise.
As previously reported, the Spotify company is planning a so called ‘direct listing’ on the New York Stock Exchange, an unusual move, but one that is arguably less risky in the PR stakes. It means that existing shares in the company will start to be traded on the stock exchange, but no new shares will be issued.
Ahead of that, the streaming music company has been busy getting new multi-year licensing deals in place with all the key content owners, with Universal Music, Sony Music and indie label-repping Merlin already on board.
Which means that the Warner deal is the last major contract still to be signed. The mini-major is expected to agree to similar terms to its competitors – a cut in revenue share in return for more data, marketing and control over content – though the specifics of the arrangement are still being finalised.
Although the public listing should mean less PR challenges than a more conventional initial public offering, once listed on the stock exchange Spotify and its business model will be under the constant scrutiny of Wall Street.
Long-term success in subscription streaming requires a combination of mass scale and keeping expenditure under control. Spotify bosses will be hoping that cutting its revenue share commitments to the labels in the new deals combined with this year’s impressive premium user growth figures will keep the City boys happy in the near term at least.
Quite how many paying users Spotify needs to be a viable business long-term is still an unknown quantity, further complicated by discounting that reduces the value of the average subscriber, and growth in emerging markets where the value of a premium subscription is somewhat lower. Still, current growth rates remain impressive, so there is probably room for just a little bit of optimism. At least until dinner time.