The question about Spotify and other streaming services has never been (or at least not in recent years) whether they’re popular enough; Billions and billions of streams are evidence that music fans are on board. What’s more concerning is how profitable they are (or aren’t): In 2016, Spotify had an operating loss of about $400 million, according to The New York Times.
With numbers like that, you’d think Spotify would do everything in its power to cut on costs and get out of the red. As Digital Music News notes, though, Spotify is bleeding cash in maybe the last area you’d expect: Rent. Citing “financial details shared with Digital Music News this morning,” the website reports that the company’s 14-floor World Trade Center office costs the streaming giant a whopping $2.77 million per month.
It’s not like this lease was signed before Spotify knew how much keeping their doors open would cost either: The deal was finalized in February of this year, for a 17-year lease costing “more than $566 million,” which works out to about $33.29 million annually. This means Spotify will have that office on its books until 2034, and that $2.77 million monthly rate only accounts for the base rent and not other costs like utilities, janitorial services, and so on.
Meanwhile, Spotify may or may not be making up fake bands to generate profits. Managing money is hard.