There’s something that I can never get over, no matter how much they explain it to me, about the new economy that has arisen from online services like Spotify is that they can stay in business for years even if their accounts never turn a profit. Yes, I know they are dependent on investors who trust that at some point the long awaited profitability will arrive and with it the distribution of profits among those who have been paying to keep the business going for more or less time.

What surprises me, what I do not fully understand, is how long this model can be sustained, even more so when we are talking about products and services that have one or more clear ways of income, that have more than a relevant position in the market and that therefore withMost of the world is seen as successful companies. This is of course the case of Spotify, but we could cite many others, such as Twitter.

I say this because Spotify just presented its latest economic results, those for the fourth quarter of 2022, which have a positive and a negative part. And the most remarkable thing about it is that if we knew only one of the two parts, we would think that the other is not possible, but as we see in the mentioned document, it is.

The positive part is that Spotify has reached a milestone of reaching 205 million paid subscriptions. Breaking the psychological barrier of 200 million is already a big success that the company celebrates, but reaching at least five million more is a clear sign of both the correct functioning of the service and that it is successful in expanding its customer base. paying customers, which will no doubt be of greatest comfort to all investors who see that the path to profitability is still open.

However, and as a counterpoint, even after reaching such a remarkable figure, to which we must attribute their mmore than 489 million active usersand after last week’s layoff of more than 600 workers, SPotify recorded an operating loss of 231 million euros in the last fiscal quarter of 2022. According to the company, this is in response to its preference to continue growing its user base over making a profit. Which of course makes us wonder, what is the magic number? Or what plans does Spotify have to improve its numbers and become profitable once it hits them? We’ve gotten used to pricey video streaming services, maybe we should expect something similar for music services in the future?