Spotify: Streaming Royalty, Or Strained By Royalties?

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RBR+TVBR OBSERVATION


Before the Opening Bell on NYSE on Wednesday, July 31, Spotify Technology S.A. will reveal its second quarter 2019 financial results. If its guidance, presented on April 29, is accurate, Spotify could see its total revenue grow anywhere from 18% to 35% year-over-year in Q2, coming in between €1.51 billion and €1.71 billion.

Sounds great, right? There’s just one big problem: The Q2 operating loss is projected to be between €15 million and €95 million. That’s an €80 million gap, yet Spotify had a better than expected loss in Q1.

It lost €47 million, or $52.9 million U.S. Dollars.

How can Spotify, a supposed competitor to broadcast radio and podcasting, possibly survive? It’s a key question no one on Wall Street seems to be concerned about, given its rebounding stock price despite hefty royalty payments and a premium pricing structure some may be ready to sacrifice.

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