On the morning of the day his company goes public — the big day that he has long insisted isn’t that big compared with “the day after, and the following day and all those days to come” — Spotify cofounder and CEO Daniel Ek looked forward and back in an appearance on “CBS This Morning.”
“While this is obviously a big day and I’m really proud of my employees, I really just feel like we’re in the early days, not celebrating the end days like so many other companies are doing,” he said. “We’re now a decade into that journey. And I really just feel like we’re in the second inning.”
Most of what he discussed on the show were topics and statements he’s said multiple times before, including in a public letter he posted on the company’s website Monday — particularly looking back at the inspiration that led him to found the company in 2006.
“For me, as someone growing up in a working-class suburb in Stockholm, I couldn’t afford all the music,” he recalled. “So back in ’98, ’99, I was really thinking about how I could get all the music and do it in a legal way while at the same time compensating the artist.”
However, he did speak at length about the company’s challenges from Taylor Swift, who removed her music from Spotify and other streaming services in 2014 over what she felt were unfair royalty rates — a decision she reversed last year.
“For me, first off, I should have done a much better job communicating this, so I take full ownership for doing that,” Ek said. “I went to Nashville many, many times and talked to her team. Spent more time directly explaining the model and why streaming mattered. And the great news is I think she saw how streaming was growing. I think she saw the fans were asking for it. So eventually when the new album came up, she came to Stockholm and spent some time with our team there figuring out a way that made sense for her.”
The streaming giant isn’t using the traditional IPO process for its public offering, but instead a rarely-used process called a direct listing that comes without underwriters. This also means that the company won’t have a share opening price. Instead, it offered some guidance in its filing Wednesday based on private share sales, which have ranged between $90.00 and $132.50 per share this year.
Based on these metrics and the number of outstanding shares, Spotify could be worth as much as $23.44 billion. However, Spotify warned that private share sales disclosed last month “may have little or no relation to the opening public price of our ordinary shares on the NYSE or the subsequent trading price of our ordinary shares on the NYSE.”
As part of its SEC filing, Spotify revealed Wednesday that it had 159 million monthly active users and 71 million paying premium subscribers at the end of December. The company generated close to $5 billion in revenue in 2017 (€4,090 million), compared to $3.6 billion in 2016. Operating losses for 2017 were $461.2 million, compared to around $425 million in 2016.