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Comment by k-mcgrady | Hacker News Reader

>> "At the same time, I think it's weird raising this kind of money so late in the lifetime of the company?"

They need it to survive as their losses are continuing to grow.

Not really. Spotify is partly owned by the labels[0], so you have to think of it like Hollywood accounting. It makes sense for them never to make a profit, because as long as they let the labels extract money from them in terms of licensing, they fulfill their purpose.

It's like how so many blockbuster movies make a "loss" on paper to avoid paying taxes on their revenues which they end up distributing to all the people who are involved with the movie.

[0] http://www.swedishwire.com/jobs/680-record-labels-part-owner...

Do you have a source for this?

"However, Spotify recorded an operating loss of €165.1m (£119m) in 2014 compared to €91.2m (£65.7m) in 2013, while its net loss nearly trebled from €55.9m (£40.3m) in 2013 to €162.3m (£117m) in 2014."

http://www.theguardian.com/technology/2015/may/11/spotify-fi...

I fail to see how these companies will ever turn a profit. I can't imagine their market growing exponentially bigger than it already is.

I'm an entrepreneur in the non tech domain, and profitability is the first thing we look for, not the last. Somehow, tech companies manage to survive for years without making any profits, which is weird t me

They only have 15m paying customers, so if it was a matter of scaling there is a long way to go. Of course they may not be profitable at any scale due to the pricing model of the labels, but thats a different matter.

Expecting Spotify to make a profit is like expecting a blockbuster movie to generate a profit. Show business isn't normal business.

Don't blockbuster movies make dozens of millions on a regular basis?!

http://en.wikipedia.org/wiki/Hollywood_accounting

> According to Lucasfilm, Return of the Jedi, despite having earned $475 million at the box office against a budget of $32.5 million, "has never gone into profit".

..because they're redefining profit "creatively".

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