Spotify has revealed intentions to charge artists and labels for advertising services in efforts to raise revenue, even though they reported $7.44 billion in 2019. A Bloomberg report notes the streaming behemoth will be offering higher tiered advertising in addition to their Marquee service that allows artists to send push notifications to fans for fees upward of $5,000.
Although Spotify’s streaming sector garnered $6.1 billion in sales in 2019, the company is still losing money because of royalties going back into the music industry.
In the Bloomberg report, industry analyst Mike Mulligan said, “They need to diversify their revenue streams, they need to work out ways to drive higher operating margins.”
With 270 million total users, Spotify is still falling behind the mark on advertising compared to other platforms, generating $678 million in advertising revenue in 2019, the revenue Twitter advertising takes each quarter.