Spotify’s finally profitable – but it’s been a long road
It’s taken Spotify 17 long years to finally turn its fortunes around. The Swedish music streaming platform recently announced positive annual figures across the board. But it’s not the only company that’s faced a long road to profitability.
675 million people regularly listen to music, podcasts or audiobooks on Spotify. This makes the Swedish company the undisputed number one in music streaming. Founded in 2008, the company became profitable for the first time last year, as revealed by its financial figures. Net profit reached a total of 1.1 billion euros.
Part of the reason why the company’s achieved this is an increase in user numbers – twelve per cent compared to the previous year, to be exact. On the other hand, restructuring and price increases also contributed to Spotify’s positive results. A legal royalty trick might have helped matters too (article in German).
The fact that it’s taken several years for the company to become profitable is nothing new. Thanks to third-party investment, businesses can generally stay afloat for a long time despite not making a profit. Nevertheless, 17 years really is a while.
The big exceptions: Microsoft, Apple and Intel
Some companies actually manage to make a profit in their first year – especially if they’re facing little or no competition. Having distributed the Altair BASIC interpreter virtually on its own, Microsoft reportedly turned a profit as early as 1975, the year it was founded.
Source: Ancestry.com
At Apple, on the other hand, it took a little longer to get into the black. Founded in 1976, the company didn’t make a profit until its second year. Home computers already existed at that time, making the competition slightly tougher for Apple. Though Intel benefitted from a lack of competition at its foundation, it also had to establish a new market with chips for home computers. It took three years before the company could report its first profit in 1971. Alphabet/Google took the same amount of time, with 2001 being the magic year.
The road to profitability was longer for Meta aka Facebook
Social media pioneer Facebook (now Meta) was founded in 2004. However, it took Mark Zuckerberg until 2009 before any investors were willing to get on board. Netflix needed an extra year. Founded in 1997, the company generated its first profit in 2003 as an online video store with no streaming services.
Source: Shutterstock / miss.cabul
Byte Dance, the company behind TikTok, waited seven years to see a good result on the balance sheet. Founded in 2012, the company turned its first profit in 2019. Our competitor Amazon had a similarly long road, making a profit for the first time in 2003.
The decade club
X first made a profit in 2018, back when it was operating under the name Twitter. In other words, a whole twelve years after it was founded. Current owner Elon Musk won’t be a stranger to the lengthy path to profitability. Like Spotify, Tesla took 17 years to get into the black. Still, at least PayPal, the payment solution he co-founded, only took two years to turn a profit.
Source: Shutterstock / Rokas Tenys
A full 20 years after it was founded, Reddit reported its first profitable quarter in October 2024. Bear in mind that for all the other companies mentioned here, annual figures (and not just quarterly figures) were taken into account. It’s not yet known whether Reddit was profitable for the whole of 2024.
Header image: Shutterstock / Yalcin Sonat
29 people like this article
Kevin Hofer
Senior Editor
kevin.hofer@digitecgalaxus.chFrom big data to big brother, Cyborgs to Sci-Fi. All aspects of technology and society fascinate me.
