It’s apparently, once again, a tale of two growths for Spotify.

(Before we get into it, we must put in place the caveats. The Information has published the figures, claiming they came from “two people briefed on the numbers” which were also shared with investors. Music Ally contacted Spotify for its response to this leak and the numbers contained within in but it said it is not commenting on the piece.)

The streaming service has reportedly driven revenues of €1.9bn in the first half of 2017 and looks set to generate €4.1bn by the end of the year. The other growth, of course, is in its losses, but this is where The Information’s, ahem, information becomes less precise, suggesting the company saw an operating loss of “between” €100m and €200m for the period. The 20-steps-forward-two-steps-back dynamic is seemingly not scuppering its trading price for shares, with one source giving Spotify a valuation of $16bn, up from $13bn earlier in the year.

This has inevitably led to extended theorisation about the company’s long-rumoured IPO or its possible lane change into a direct listing. The Information says the company ran up losses of close to €1bn between 2014 and 2016, but renegotiated licensing deals are possibly working in its favour, although it has to hit certain subscriber targets to really feel the benefit. The last official numbers issued by the company came in June when it said it had 140m users, of which 60m were paying subscribers. Its nearest competitor, Apple Music, had officially announced 27m subscribers in June, with recent rumours suggesting this has now passed 30m. Apple Music might be half the size in terms of subscribers but is not having to balance out the drain on revenues caused by a free tier that is much larger than a paying tier.

According to this leaked report, Spotify has boosted its gross margins from 15% last year to 22% for the opening six months of this year. That’s good but considerably behind the 35% gross margins Netflix (the company it is invariably compared to despite the fact they are chasing different audiences and have markedly different stances on licensing versus content acquisition) enjoys.

Not to dismiss The Information and its sources, but until these numbers are officially confirmed (or shot down), there is only so much they can tell us about the viability of both Spotify in particular and subscription streaming in general. Context, however, is key. It all comes against a backdrop of major music services, despite being at scale, hitting the pain barrier. In the summer, SoundCloud had to cut its global workforce by 40% and pull down emergency investment of $170m to keep going. Meanwhile, in May Pandora might have reported a 6.3% jump in revenues in Q1 2017 but it also saw net losses grow to $132.3m in the same period.

The market, from a label and publisher perspective, is now very much in recovery mode after years of decline in recorded music revenues. This is not about the long-term survival of Spotify; this is about the long-term survival of everyone in this part of the market. Spotify is not the streaming market in toto but it has created a gravitational pull in the sector that both content owners and rival services are partly carried forward by. What happens next to Spotify will not occur in a vacuum. For better or for worse, that is the lens through which we have to view all of this.

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