In paperwork to take its shares public in a $1 billion IPO, Spotify estimates it has twice the subscribers of its closest rival.
For a regulatory filing, this is about as close as you get to a sick burn.
Spotify is double the size of Apple Music, its closest competitor in the streaming music market, the Sweden-based startup said in its filing for a planned initial public offering of shares.
In the IPO paperwork, Spotify said it wears the crown for the world's largest streaming music service, staking claim to about 42 percent of the market. It has 71 million paying members and 159 million people who use the service at least once a month, the company said.
Apple didn't immediately respond to a request for comment. A report earlier this year said Apple may be on track to overtake Spotify's scale in the US, the biggest music market in the world, based on a snapshot of monthly growth rates.
Spotify has been a key force in a larger, cultural shift in how we play and pay for music. Rather than buying music outright, like we did in the era of CDs and digital downloads, people are increasingly paying flat fees for all-you-can-access tunes. Spotify and Apple Music have emerged as the early leaders. While Spotify enjoys a price advantage thanks to its free, ad-supported tier, Apple Music has leaned on heavy marketing and exclusives for hit albums to lure members.
Spotify's free tier -- unique among competitors like Apple, Amazon, Google and Tidal -- is crucial to how it gets paying members, according to the filing released Wednesday. The free, ad-supported tier was the entry point for 60 percent of paid subscribers.
Spotify, which charges $9.99 a month for ad-free streaming with other perks, will trade on the New York Stock Exchange under the symbol SPOT, listing shares worth up to $1 billion. The $1 billion amount is an estimate for the purpose of calculating regulatory fees, but shares' value will be determined by its trading in the open market. The filing didn't outline timing for its IPO. Spotify is taking the atypical route of a direct listing, which means it will simply offer new shares to trade in the open market, without banks underwriting the offering. (Don't bet on founder and CEO Daniel Ek to ring the opening bell, fists pumping...)
As Spotify's members have grown in the last two years, so too has the amount of time people spend listening to the service. Average use was up 13 percent at the end of last year compared with a year earlier. Spotify's playlists are a major draw: About 31 percent of all listening on Spotify comes from either curated playlists, like its popular Rap Caviar, or automated playlists, like its personalized Discover Weekly lists. The playlists were at less than 20 percent of listening two years ago.
And people who cancelled their subscriptions tended to rejoin. About 40 percent of premium subscribers who churned rejoined within three months, and half rejoined within a year.
But not everything in Spotify's filing was rosy: The company is unprofitable and its losses are widening. Its bottom-line loss widened to €1.235 billion ($1.507 billion) in 2017 from a year earlier, even as its revenue climbed 39 percent to €4.09 billion ($4.99 billion). Music licensing, its payments back to artists, songwriters and labels every time a song is play, is its biggest cost. The giant bite of music royalties is endemic to the industry -- most streaming music services operate at a loss.
First published Feb. 28 at 1:42 p.m. PT.
Update at 2:22 p.m.: Adds financial details.
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