Spotify will go public on April 3

Apple Music hits 38M subscribers closes gap with Spotify

Spotify CEO Daniel Ek speaks onstage Thursday during Spotify's Investor Day in New York City.

Spotify Technology SA executives outlined their vision for the music-streaming company and dug into its financials, opening to the public a presentation that typically remains behind closed doors, as the company hurtles toward an April initial public offering.

The streaming music market in the country is dominated by players like Apple Music, Google Play, Deezer and Simfy Africa.

Spotify said its revenues grew 39% to €4.09bn in 2017 but the cost of financing left its bottom line firmly in the red, with operating losses widening by 8% to €378m.

Spotify has warned investors it faces a variety of risks.

With 71 million subscribers at the end of 2017, Spotify is the leader in streaming music.

The independent service is jockeying against efforts from Apple, which has 38 million paid listeners and eschews advertising-supported services.

"The opportunity here is about growth for us and growth for everyone", Cue said, adding that a huge gap exists between the number of people who can afford to pay for music services and those who do.

Apple Music is clearly a part of the company's connected home strategy as well, as the centerpiece of its HomePod smart speaker, which finally launched last month.

Executives also said they want any investor-rather than a curated group-to have the chance to buy shares on the first day. Based on private transactions, it is valued at roughly $19bn, according to Reuters calculations.

He also confirmed that Spotify will announce financial guidance for Q1 2018 on March 26, the week prior to trading.

McCarthy spelled out Spotify's long-term operating targets for generating sustained free cash flow, with annual revenue growth between 25 and 35 percent and gross margin between 30 and35 percent - ambitious for a loss-making company. And while Ek conceded that "I think we could have done a better job of telling our story", he pointed to the music industry's 3% and 6% growth in 2015 and 2016 respectively, and noted that it was driven by streaming, and of course Spotify is the world's largest streaming platform.

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