Spotify prepares its IPO to distance Apple Music

With more than 70 million paying customers, Spotify has twice as many subscribers as Apple Music. And that's not counting millions of users freemium of its streaming service.

The music streaming service has opted for a procedure of direct IPO, without issue of new shares or capital raising. A way to save costs associated with a classical IPO. Spotify would like to be listed on the New York Stock Exchange under the symbol "SPOT" and does not intend to raise new funds during this operation. The share price has not yet been set, but according to Reuters estimates, the valuation of the streaming service would be of the order of $ 19 billion.

This IPO is expected in the Swedish of the gap with its main competitor Apple Music. Champion of the paid download, Apple did that late of streaming, constrained by the global change uses among music consumers. Since then, the Mountain View company strives to revisit one of the precursors of the sector: Spotify.

With his sales of millions of terminals, shipping its apps and services, Apple has a considerable fire power. At last count, Apple Music so had 36 million subscribers - pay, no free offer not being proposed.

Streaming: a global phenomenon

However, Spotify does not remain idle and maintains its recruitment dynamics. European streaming service announces thus have surpassed the 71 million customers to its paid subscriptions.

Since last March, Spotify has so conquered 20 million additional subscribers. A good performance, which reason for global growth of streaming, particularly in its pay formula.

Spotify has a comfortable lead on Apple Music. And thanks to its free offer, it climbs even at 159 million users worldwide. Service plays on both tables, andtakes advantage of dynamic streaming, by paying as in free.

However, despite its size, Spotify does still not profits, unofficially Editor's Note: the company is not publicly traded and therefore not obliged to disclose its financial data.

However, CNBC reported in May that the company had positive cash flow (free cash flow), sign that its sales were large enough to cover the basic costs. And it can count on the development of streaming to grow further.

Spotify: giant with feet of clay?

Growth in this sector will not settle. It is even this segment which has helped in 2017 the french music market to confirm the growth found in 2016, a first for 15 years according to the SNEP.

According its barometer, streaming income jumped 23% in 2017 to 243 million euros (+ 37% in 2016). Thus, this mode of consumption now weighs 42% of the total music market revenues.

Best, a growing share of French are willing to pay to access this content. Music may well ultimately has a price, and some users agree to questioning the rule at all free. Subscriptions are in fact 83% of the streaming revenue and 35% of those in the market.