In a move clearly intended to bolster its financial profile as it ramps up toward a public listing, Spotify has changed up its board of directors.
Napster cofounder and early Facebook president Sean Parker, as well as early backer Klaus Hommels, have left the board, while four heavy hitters — former Cisco exec Padmasree Warrior, ex-Disney COO Thomas Staggs, former YouTube product chief Shishir Mehrotra and investor Cristina Stenbeck — have signed on, according to a report on the Swedish tech site Breakit. A rep for Spotify confirmed the moves to Variety.
The board now consists of:
Daniel Ek, CEO and Chairman, Spotify
Martin Lorentzon, Co-Founder, Spotify
Ted Sarandos, Chief Content Officer, Netflix
Christopher “Woody” Marshall, General Partner, TCV
Tom Staggs, Former COO, The Walt Disney Company
Cristina Stenbeck, Owner, Investment AB Kinnevik
Padmasree Warrior, CEO, NIO
Shishir Mehrotra, Former VP of Product and Engineering, YouTube
A source told TechCrunch that Parker and Hommels, who have been on the board since 2009, remain investors to the company. Parker in particular played a large role in the negotiations and strategy leading up to Spotify’s 2011 launch in the U.S.
The move comes against the backdrop of a mixed financial statement released by Spotify last week. While it claims to have passed 140 million users worldwide — 50 million of which it said in March are paid subscribers — the company’s revenue and operating loss both grew significantly. It showed an operating loss of some 349 million Euros ($389 million) compared with a 236 million Euro loss the previous year; its gross profit was just $502 million. “This is explained by substantial investments that have been made during the year, mostly in product development, international expansion and a general increase in personnel,” directors Daniel Ek and Par Jorgen Parsson wrote in the filing.
Those losses are not likely to decease, as the company also pledged to pay record labels at least $2 billion over the next two years. Spotify inked licensing deals with both Universal Music Group and the independent label collective Merlin earlier this year; it is still negotiating with Sony Music Entertainment and Warner Music Group.
Still, Spotify remains the service to beat amid fierce competition from Apple Music — which recently said it reached the 27 million subscriber mark — Amazon and YouTube, and to a lesser extent Tidal and Deezer. The major labels are said to own approximately 18 percent equity in Spotify, which to a large degree unites their prospects for success in the streaming market.