Is Spotify worth more than the whole of the music industry?!

27 Apr 2015

Spotify, is it worth more than the whole industry?

 

 

You’re hopefully thinking ‘Wait, what? That’s not true’… And you’re kinda right.

So over the last few months there has been talk of Spotify gaining some $400 million in funding, and that is now a reality. The company that have claimed to not make any money now are valued at more than the whole of the U.S. music industry, wait, what?

Spotify are currently valued at $8.4 billion, according to musicweek.com. This makes Spotify one of the highest valued private technology companies in the world. According to the RIAA , in 2014 the revenue of the entire U.S. music industry was $6.97 billion, which accounts for digital sales, physical sales and streaming.

But, the money that the RIAA is talking ¬†about is the money made for the¬†whole of the American music industry, the profit, where as Spotify, that figure it’s just its worth as a company. As we’ve all heard over the past few years, Spotify is still to turn a profit, so these figures are right, but revenue and valuation are a bit different.

If you look at Spotify’s revenue, it’s a lot less than the rest of the industry. Spotify turned over round $1 billion, where as the rest of the U.S. industry reached almost $7 billion, so there is still some catching up to be done.

Streaming is getting bigger and gaining more momentum everyday, it’s the new medium for consumption. Spotify currently have 60 million subscribers, 15 million of these are paying subscribers. It looks a lot like the industry is going to keep growing in this respect, let’s see how it pans out over the next year.