Spotify rumours run wild. But how many of them are true?


While Spotify’s search for a new funding round has been an open secret for some time, the weekend saw a flurry of speculation about its size and investors, as well as about the performance of Spotify’s business in 2012.

The Wall Street Journal set things in motion, mere days after Spotify CEO Daniel Ek spoke at a tech event in New York. Its report claimed that Spotify’s new funding round will be for “more than $100m” valuing the company at just over $3bn – which is $1bn less than the last time the media were speculating about Spotify’s funding plans.

Goldman Sachs is tipped as one of several investors in the new round. Music Ally understands that all of this is essentially correct. Billboard agreed, citing its own source, but added a bit more detail, pointing to expansion into Latin America and further into Europe as one use for the new funding round.

The trade title’s workings are clear though: Spotify is currently advertising for an ad sales director, growth manager and partnerships program manager in Mexico City, as well as a sales manager in Poland.

The most controversial speculation of the weekend, though, comes from TechCrunch. The tech blog claimed to have information on Spotify’s financial performance in 2012: $200m of revenue over the first six months, currently on course for $500m for the year as a whole, and a projected annual loss of $40m after payments to labels and other costs.

While Spotify isn’t commenting on its finances, TechCrunch’s claim that the company must pay either $200m or 75% of its annual revenues to rightsholders is being vigorously refuted by Music Ally’s sources.

The company has been fairly open about its payouts in the past – chief content officer Ken Parks has said publicly that Spotify pays between 65% and 70% of its revenues out to rightsholders – but speculation about a flat-fee or percentage clause is clearly not being welcomed.

Stuart Dredge

Read More: Analysis News
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