Spotify has filed to trade its shares publicly on the New York Stock Exchange with the US Security and Exchanges Commission. Based on the expected share price, the move could value the firm at more than $23bn (£16.7bn).
Spotify have also announced that they closed 2017 with 159m monthly active users and 71m premium (subscription fee paying) subscribers, making it the global streaming leader. The document also shows that Spotify have paid $8bn out to artists and rights holders since its 2008 launch.
The Swedish firm openly discuss their business model in the document:
We offer both Premium and Ad-Supported Services. Our Premium and Ad-Supported Services live independently, but thrive together. We believe this business model has allowed us to achieve scale with attractive unit economics and is a critical part of our success.
We continue to invest heavily in developing our two-sided marketplace with new and better product features and functionality for Users and creators and believe our investments are leading to higher User engagement and enjoyment. We provide personalization that drives a unique and tailored experience to each User and the tools for artists to reach the widest fan base.
Our Ad-Supported Users and Premium Subscribers are spending more time with the Service each year. From a content perspective, on average 25 Content Hours Per MAU were streamed in each month of the fourth quarter in 2017, up 13% from the fourth quarter in 2016 and up 26% from the fourth quarter in 2015. Historically, our Premium Subscribers have streamed more than three times the amount of content per month than Ad-Supported Users.”
Last week, we reported that Spotify seem to be developing hardware products, with the opening of numerous operations and manufacturing job roles on their website. With a unique ‘access over ownership’ model at the core of Spotify’s operations, a speaker or other hardware developments would help secure the firm's position as the world’s most popular streaming service and bolster its growth potential as a business. Also, through investment in R&D, as Spotify’s recommendation algorithm becomes even smarter, custom tailored playlists like ‘Discover Weekly’ will begin to understand your music taste better than you do.