Re:Spotify have reached 40M paying subscribers
by ci5er on Wednesday September 14, 2016 @01:48PM
(#12499463)
COGS is going to be ~60% of revenue. That's the royalties.
Gross Margin = Gross Revenue - COGS.
We're down to under $160M.
Spotify has (or had) 1600+ employees. If these were US (CA) based, we'd estimate higher, but since Europeans are relatively "cheaper", let's call it $75K/employee all-in (taxes, benefits, etc.). That's probably light, and doesn't take into account rent or data centers or any expenses, and that costs them ~$120M.
That leaves $40M for "everything else". Assuming that their employees are indeed "as cheap" on average as guesstimated above.
Gross Margin = Gross Revenue - COGS.
We're down to under $160M.
Spotify has (or had) 1600+ employees. If these were US (CA) based, we'd estimate higher, but since Europeans are relatively "cheaper", let's call it $75K/employee all-in (taxes, benefits, etc.). That's probably light, and doesn't take into account rent or data centers or any expenses, and that costs them ~$120M.
That leaves $40M for "everything else". Assuming that their employees are indeed "as cheap" on average as guesstimated above.
Conclusion: they are surely losing money.