Look like Spotify doing better than expected. According to Techcrunch they could reach a $500M revenue this year.

http://techcrunch.com/2012/11/10/spotify-is-having-a-good-2012-revenues-could-reach-500m-as-it-expands-the-digital-music-market/

But how about this part. 

"Its deal structure with the labels requires either a $200 million annual payment, like what it had to do last year, or around 75% of total revenue (whichever is higher). 2012 will be the first year that revenue is high enough for the percentage structure to kick in. "

Where did Techcruch learn that?

The idea that Spotify payouts to labels eat away at its revenue seems dubious to me since Sony BMG, Universal-EMI, Warner, and Merlin own a reported 16-18% of Spotify. My guess is that fuzzy accounting understates the value of Spotify.

oh please, read between the cheerleading Tech crunch lines why don't you?  The more revenue Spotify makes the bigger the bill.  they still lost money in 2012

2012 isn't over yet.

from 2010-2011, Spotify's gross profit grew from ($3,878,359) to $5,625,925.

Their increase in reported losses over the same period seems to have gone to an increase in personnel costs rather than cost of sales. Cost of sales, as a percentage of revenue, decreased from 104% in 2010 to 98% in 2011, while personell costs grew by 173%. This could mean that Spotify is growing and hiring as its revenues and profits increase.

Hans, contrary to your beliefs and those of Spotify, readers of DMN are capable of sifting through the misinformation and disinformation to arrive at correct conclusions. Since you like to have the last word, I will let you have it.

If Goldman Sachs gives money to Spotify, then I will most definitely deactivate my account.

Why? They need money to survive. They are almost certainly running low on cash and it really shouldn't matter who invests in the company. Goldman Sachs has probably invested in more things you use on a daily basis than you would ever want to know.

What is spotify going to do with this? Mad money

Brace yourself, because if this comes to pass the hammer is coming down.  Now, big money will be joining Pandora in an effort to reduce music to digital road kill.

This is all about money, big money going up against the individual artist.    

Spotify's promise to significantly raise artist payouts will be a board room non-starter and the whole concept of sharing music libraries in the clouds smacks of Napster for pennies a day.

Wish it was better news......

Spotify at a $3 billion valuation...!

Face it: digital music services aren't about driving artist revenue, they are about making investors rich

That is the point of every for profit company is it not?

Whoa

This frightens me...

5 million paying subscribers at around $120 a year (give or take with pounds, euros and other currencies) = $600 million a year in subscription revenue.

+ $100 mil from ad revenue 

= $700 million a year in revenue

THIS IS NOT GOOD.  Spotify needs to generate at least $1 billion a year in revenue to be relevant.  

Will it get there in 2014?

Probably 2013. Once they start restricting more free users, subscriptions will sky rocket.

I am a free user if they restrict access I won't subscribe, I'll just stop using spotify.

Yeah, me too, I mean why would I want to have total ad free access to 18 MILLION tracks??? In extremely hgh quality?? Constantly at my disposal for the price of a shitty cocktail?

Oh wait fuck that, it's actually amazing.

Seriously, people with your attitude are devaluing music into nothing. It's one thing not to like Spotify or their business models or whatever else, but you sound like you're an active user and a comment like that makes you seem like a spoiled shit. Get over yourself.

With Goldman coming on board you know their on the fast track for an IPO. Same thing will happen with Spotify as Pandora, 8+ years in the game and not a dollar of profit.

If we would live in well managed country with congress at our service this would be a criminal activity. Both Spotify in relation to music industry and Goldman in relation to investors.

Well we live in clogged up welfare republic!

now what?

Goldman Sachs is privately telling its clients that Spotify is a classic pump and dump scheme and proving it by putting its money where their mouth is. It's all about reeling in more 'suckers'.

On-demand streaming subcriptions have little upside because most consumers don't spend $5-$10 per month on music, especially as we grow older, even without piracy.

GS is desperate to find more investors, hence their expected stake in Spotify to boost interest.

Little upside? Let's try rewriting that without the negative bias.

There is plenty of upsides, otherwise people wouldn't subscribe. Access to limitless music in high quality without advertisements for a flat fee per month? That is a massive upside. It is the music version of Netflix. One could argue Netflix isn't worth the money because most people don't buy $8 worth of movies per month. Yet 20+ million people subscribe.

Most people didn't spend a dime on radio. Yet people subscribe to SiriusXM. Investors said it was never going to get off the ground. 18 million subscribers later the company started turning a healthy profit. Kinda funny isn't it?

Welcome to artistic slavery. The fat cats are throwing  artists crumbs i.e. fraction of a cent. They sit in a office, speculating on this big charade for which they pull big marionette strings with your creativity. Artists are getting shit on in this paradigm. The  upper echelon fattens their coffers, They don't give a shit about the creators who pour theirs souls into the music.   Exploited for profit .. gradiose capitalistic masterbation, and you are expendable .    

$.0000012

winning. i should start my own music news blog... but just much too busy making money in the biz ;)

if you weren't so emotional then your rational mind wouldn't have been so clouded. 

fergodsake! They got bailed out and then do THIS?

UGH. ................... :-P