Leonid Bershidsky, Columnist

I Want to Pay More for Spotify

The streaming music service could become more competitive by increasing compensation for artists.

November 2, 2018 at 6:00 AM UTC

Leonid Bershidsky, formerly Bloomberg Opinion’s Europe columnist, is a member of the Bloomberg News Automation Team. He recently published Russian translations of George Orwell’s “1984” and Franz Kafka’s “The Trial.”

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Photographer: Spencer Platt/Getty Images

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Spotify executives like to say they manage for growth rather than profitability. It was the growth, however, that disappointed investors in the latest earnings, released Thursday. As a user, I also worry that the music-streaming service’s ideas about growth are wrong.

Spotify was down more than 6 percent in early afternoon trading Thursday after the announcement that the company’s fourth-quarter revenue forecast missed analysts’ expectations: At the lower end, 1.35 billion euros ($1.54 billion), the guidance was even lower than the third-quarter number, 1.352 billion euros. That could be because when Spotify executives say “growth,” they mean the total user base first and revenue second. With the latest forecast, the average quarterly growth rate of the user base, including both subscribers and free, ad-supported users, is 28.6 percent year-on-year in 2018. The growth rate for revenue is just 25.3 percent.