STOCKHOLM—Spotify is set to launch its popular music-streaming service in Canada, and has further plans to possibly expand into Asia and South America, according to the Anglo-Swedish company's recently published annual accounts.
The accounts of Spotify's holding company—Luxembourg-based entity Spotify Technologies SA—were made available earlier in August. The annual account filing contains a management report, dated April 23 this year, where Spotify said a launch on the Canadian market is planned. Spotify said this move will further consolidate its position as the world's largest music-streaming service, and added that it may seek to expand into "countries in Asia and South America."
Daniel Ek, CEO & co-founder of Spotify, addresses attendees at a conference in New Orleans,
in this file photo from May 9, 2012. Reuters Last year, Spotify established subsidiaries in Canada, Singapore and Hong Kong, all places where its service isn't yet available. Spotify is currently available in 15 countries, including the U.S., the U.K. and Germany, and recently launched in Australia and New Zealand. Company spokeswoman Sofie Grant declined to elaborate on the details of the company's expansion plans, but said Spotify "of course plans to launch in new countries."
Spotify's rapid international expansion has been costly. Last year its net loss widened to €45.4 million ($56.6 million), from a €28.5 million loss in 2010. The company's large losses have been financed by its owners, and Spotify said it "cannot exclude the need or desire to raise more funds in the future," adding that the source of any additional capital would have to be equity.
Spotify's owners include billionaire Li Ka-shing, chairman of Hong Kong conglomerate
Hutchison Whampoa Ltd. , whose investment company Horizons Ventures bought a stake in the company in 2009. Another investor is the Founders Fund, where Sean Parker, co-creator of the file-sharing service Napster and a former
Facebook FB -0.90% president, is a managing partner. Mr. Parker also has a seat on Spotify's board of directors.
While losses are piling up for Spotify, its revenue is also increasing rapidly. Last year, the company's revenue totaled €187.8 million, up from €73.9 million a year earlier. This revenue increase is largely a result of higher sales of music-streaming subscriptions, which increased to €156.9 million last year from €52.6 million in 2010. However, advertising sales for Spotify's free-of-charge service are lagging, having reached €27.6 million last year from €21.1 million in 2010.
By the end of last year, Spotify had 32.8 million registered users, implying average revenue per user of €5.73.
The music-streaming service, which has paid about €200 million to labels and publishers since launching in 2008, was founded in Sweden by Daniel Ek and Martin Lorentzon. It has its headquarters in the U.K. and has research and development facilities in Stockholm.
Its rivals include
Apple Inc. AAPL +0.49% 's iTunes, as well as U.S.-based streaming services such as Rhapsody and
Pandora Media Inc., P +0.36% and France's Deezer.
Source:
Wall Street Journal 