Rhapsody is conforming to the ‘bigger revenues / bigger losses’ model of streaming growth, according to its financials for 2015.
The numbers, as usual, were published by RealNetworks as part of its own financial report – the company still holds a 43% stake in Rhapsody.
The key figures: Rhapsody’s revenues rose from $173.5m in 2014 to $202m in 2015 – growth of 16.4%. However, its net losses rose from $21.3m in 2014 to $35.5m in 2015, representing a 66.3% increase year-on-year.
This came as Rhapsody grew its subscriber base by 45% in 2015 – a stat revealed in February in RealNetworks’ last earnings call.
RealNetworks isn’t authorised to announced the actual subscribers number, but Rhapsody reached 2m subscribers in July 2014 and 3m in July 2015. It’s thus reasonable to suggest that it had around 2.5m at the end of 2014, with 45% growth in 2015 indicating around 3.6m by the end of that year.
That could be significant: Deezer had 3.8m revenue-generating subscribers at the end of June 2015 according to its IPO documents, so while Rhapsody (including Napster) won’t have overtaken Deezer in 2015, it may well be snapping at its heels in the coming months. Yet both are watching Apple Music disappear into the distance with its 11m subscribers, let alone Spotify with its verging-on 30m.
Even so: Rhapsody is losing money. Deezer is losing money. Spotify is losing money. Pandora is losing money. Tidal is surely losing money. And their competitors are Apple, Google and Amazon, for whom streaming losses are just a drop in the ocean of their income from device sales, advertising and e-commerce respectively.
None of this is shocking news, but 2016 might be the year to talk more about what it means in the long term.