Spotify expects to pay $500m to music rightsholders in 2013

Spotify expects to pay out $500m to music rightsholders this year alone, according to CEO Daniel Ek.

He was speaking at the Innovation Forum conference in Los Angeles, with his comments tweeted by Billboard reporter Alex Pham. Ek noted that $500m would be the same amount as Spotify had previously paid out since its launch in 2008.

It’s a single stat, but there’s mathematical fun to be had. If Spotify is paying out 70% of its revenues to rightsholders, that would mean it’s hoping for around $715m of revenues in 2012.

And if data published last August suggesting 83.5% of Spotify’s revenues come from paying subscribers continues to hold true this year, that would point to $597m-odd of subscription revenues this year and $118m-ish of advertising revenues.

This is, of course, all speculative. The last hard figures we have for Spotify’s revenues came from its 2011 financial results published in August 2012, which revealed $236m of revenues and a net loss of $56.6m the previous year.

$236m to $715m between 2011 and 2013 would represent strong growth, albeit not of the kind predicted in yet more reports in April last year, when Ek was quoted as hoping for as much as $889m of revenues for 2012.

The fact that we – and the wider industry – pore over this mixture of real and speculative numbers reflects Spotify’s key role at the proving-ground for streaming music as a digital business model. Yet it’s not alone.

Shazam’s Jason Titus was also speaking at the Innovation Forum, and while his claim that Shazam will drive $300m of music sales in 2013 will generate less headlines, it’s just as noteworthy.

Spotify, Shazam+iTunes, Vevo (more than $200m paid to rightsholders so far), Pandora… Music Ally readers won’t need reminding that digital music growth is about a patchwork of complementary services, not a single saviour.

Written by: Stuart Dredge