Why is Spotify Not Generating Any Profit?

By: Julie Feng

Spotify is a music platform that many of us use every day; more precisely, over 104 million active users use Spotify. Every. Single. Day. Talk about connection. Yet, globally, out of Spotify’s 406 million monthly active users, more than half do not pay a dime to use the services. Considering that Apple Music, Amazon Prime Music, and YouTube Music charge each of their consumers a small monthly price to access valuable music content, have you ever wondered how Spotify makes money?

Simply put, the answer is: they don’t. That’s right, ever since its launch, Spotify has generated billions of dollars in loss. Despite all the controversy surrounding Joe Rogan costing Spotify billions of dollars in equity and the expensive rights holders to artists, Spotify is disappointing for other reasons, from an investor’s perspective, of course, and here is why. No ads, I promise.