Spotify is the leading music streaming platform, with around 600 million users, twice the market share of the next largest competitor, and is adding millions of new subscribers per month, while losing few.

However, it seems not even the leading audio-streaming company can consistently make money.

While consumers love the convenience of streaming, it remains to be seen if companies can translate this to profit.

Spotify pays music labels and rights holders 70 cents for every dollar earned. It lost money in its $1 billion push into podcasting, which has become less lucrative than expected, and has struggled with its attempts to stage concerts and sell tickets.

Additionally, it’s two years late with rolling out high-fidelity lossless audio.

Known competitors are Apple, Amazon, and Google, which don’t have to rely on streaming audio profits.

Founder of tech-focused, equity-research firm Arete Research, Richard Kramer said, “Spotify has consistently led people to believe they would have a profitable business that would justify their valuation and used capital raised on the back of that valuation to chase rainbows. None of those rainbows were captured.”

Following years of quick growth, Spotify cut around 2,300 jobs in three rounds of layoffs last year, in an effort to gain profitability. The most recent saw the loss of 17% of its remaining workforce.

CEO Daniel Ek revealed the latest round of layoffs after reporting a stronger user growth during the third quarter, and the company’s first quarterly profit since 2022’s first three months.

Executives have claimed Spotify has made progress transitioning from a music streaming platform to an audio company, and a recent push into audiobooks, along with podcasts and music streaming, is said to bring in sustained profits this year.

This is the only music streaming platform that offers music, podcasts, and audiobook listening in the same app for a A$12.99 a month.

Music industry analyst, and founder of Music Business Worldwide, Tim Ingham said Spotify’s “willingness to spend money to the point of loss-making has been a key factor” in its dominant market position.

“They serve a technology that’s easily replicable and has been successfully replicated by tech scions.”

He believes Spotify could be a takeover target eventually for companies including Microsoft, Netflix and Tencent.

CEO Daniel Ek revealed last month that the company spends too much money, and must return to its more resourceful roots.

In a letter to employees, he said what the company accomplished over the last two years was impressive, however “the reality is much of this output was linked to having more resources.”

“By most metrics, we were more productive but less efficient. We need to be both.”