Spotify has further expanded its lead in the music streaming segment by attracting 60 million paying subscribers in recent times, the company revealed earlier this week. The development marks another important milestone for the service that now managed to extend its lead over Apple Music, with the increase itself being Spotify's fastest subscriber gain till date as the Swedish platform managed to add 10 million paying users in under five months.
Spotify surpassed 140 million active users last month, though the company is still being operated as a startup even after 11 years, with its management prioritizing growth above everything else and thus continuing to incur losses. The firm's 2016 financials revealed an annual loss of almost €540 million ($636 million), and its business is believed to still be in red due to many listeners refusing to pay to stream music online, coupled with an increasing number of record labels and artists demanding higher royalties for their creations. When combined with the company's aggressive growth strategy, that state of affairs led to Spotify still operating at a loss in 2017 and relying on venture capital. The firm has been renegotiating royalty agreements with record labels and artists in recent times in an effort to improve its performance and has seen some success in that endeavor so far, having agreed to new deals with Sony Music and Universal Music Group earlier this year, which reportedly allowed the company to reduce related royalties to 52 percent down from 55 percentage points. Spotify has also worked on adding newer features to its service in recent months with the goal of improving its user retention rates and attracting new listeners whom it hopes will become paying customers in the future.
The company has maintained a relatively low profile in recent weeks, with some industry watchers speculating that it's preparing for an initial public offering (IPO) that may come as early as the final quarter of this year. If reports about Spotify's growing ambitions to go public are accurate, the firm's recent user acquisition numbers should help increase its valuation in a significant manner, though it's still unclear how many venture capitalists that invested in the service over the years would be looking to cash out as soon as its stocks are listed.