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Spotify says about two million users suppressing ads without paying

(Reuters) – Music streaming service Spotify Technology SA [SPOT.N] said on Friday about 2 million of its non-paying users were suppressing advertisements, highlighting a potential revenue risk for the soon-to-be public company.

FILE PHOTO: Headphones are seen in front of a logo of online music streaming service Spotify, February 18, 2014 REUTERS/Christian Hartmann/File Photo

Spotify had 157 million active users as of Dec. 31, of which about 71 million were paid subscribers who access ad-free versions of the service.

In a regulatory filing, Spotify said here it previously included the 2 million users in calculations for some of its key performance indicators, including MAUs, ad-supported users, content hours, and content hours per MAU.

The streaming music leader had filed this week for a direct listing of its shares worth up to $445 million, instead of a traditional IPO.

The direct listing will let investors and employees sell shares without the company raising new capital or hiring a Wall Street bank or broker to underwrite the offering.

Reporting by Arjun Panchadar in Bengaluru; Editing by Saumyadeb Chakrabarty

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