, Columnist
Apple Investors Should Look at Spotify and Shudder
The softer side of the business holds out the promise of fatter margins, but it's not that simple.
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Apple investors eager for fatter profit margins should read Spotify's latest financial disclosures. They should have a few antacids handy when they do.
The company's document for its public stock listing highlights how tricky it is to turn a profit in digital music. Spotify Technology SA's gross profit margins1520357514741 drastically improved last year thanks to new contracts with the record labels, but the company is still doling out 75 to 80 cents of every dollar in revenue to its music industry partners, and for some other basic costs of providing its product. That makes it tough for Spotify to turn a profit.