In the whole Spotify controversy, this is the ‘detail’ that demonstrates why the system is so dysfunctional: if your average artist isn’t making much money from the streaming service, why is Spotify spending so much? What a shame! Crain’s New York is reporting that the digital service has added a 50,000 square feet at 620 Sixth Avenue headquarters, midtown Manhattan. Initially Spotify had the entire top floor of this 7-story building, a 75,000 square foot penthouse office complex that ‘features huge skylights, outdoor terraces and an antique cast-iron spiral staircase that is original to the 1896 building leading to a small private observation desk’… wasn’t this enough? Why do they need an addition of 50,000 square feet?
As you can guess, rents do not come cheap in this area, they are now into the $70s per square foot, which means, roughly speaking that Spotify pays, at the lowest, around $9 million per year to rent its Manhattan office. Of course the service also has offices in Brussels, London, Paris, Stockholm, Madrid, Oslo, Amsterdam, Helsinki, Melbourne, Berlin and Copenhagen. And I thought Spotify wasn’t making any money? According to Reuters, they posted a 58.7 million euro net loss in 2013 compared to a 45.4 million loss in 2011, but they also say that the company received financial backing from different companies such as Northzone, Kleiner Perkins Caufield & Byers, Accel Partners and DST… So why are they spending so much money for their headquarters when they pay artists $0.012 per stream or something of this order? I will never understand the financial world and the Wall Street culture, it is just a totally foreign universe for me, they have to throw money out the windows to make money later? In the fair world, this should never happen.