Spotify announced a 10 percent increase in the number of total paid subscribers, placing the music streaming platform ahead of Apple Music. However, it's not all good news for the company.
The Swedish entertainment company is making waves in the news lately with its recent announcement that it has now reached a total of 83 million paid subscribers in the second quarter of the fiscal year. This is up from the earlier 75 million premium subscriptions that Spotify reported at the beginning of the year.
In terms of total monthly active users, the streaming service is now closing in on its 200 million subscription mark in the first quarter.
Much of the paid subscribers joined Spotify through various means of promotions such as family and student subscription pack, as well as a bundle offer from Hulu.
Apple, on the other hand, is trailing behind with 40 million paid users, according to an earlier report.
However, subsequent reports are casting shadows on Spotify's victory over the Cupertino-based tech firm's music service. As hinted, Apple Music is still on track to move past towards the end of 2018. This should be easy for Apple given the 1.3 billion active iPhone devices running the home-grown music app.
Meanwhile, a report from Rolling Stone indicates that the streaming service could be losing more money than it did in 2017.
During a shareholder's meeting on Thursday, Spotify reported net losses of USD$461.4 million, twice from what the company shelled out last year which was USD$220 million.
Operation costs were also higher at this time of the year with USD$105.7 million. The figure was 14 percent higher than in 2017. As revealed by the report, much of these overhead expenses are accounted on the company's New York Stock Exchange debut that took place earlier this year.
Investors are still hopeful for the revenue to come around, although this could take awhile.
Streaming music companies, such as Spotify, don't earn that much given the fact that much of the revenue incurred in the services goes to the record labels, music rights-holders, and artists.
Adding the increasing cost of running the platform, analysts are looking more on the losses compounding every year.
Still, there is a silver lining, at least in the case of Spotify, as it continues to gain new subscribers both paid and free. Forecasts are seeing an increasing growth of 193 million users in the next quarter.
Spotify was founded by Daniel Ek and Martin Lorentzon in October 2008. It is currently available for use in over 60 regions worldwide.
