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.

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, 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.

(This version of the story corrects to remove reference to maximum value of direct listing. The value given in Spotify’s filing was only for the purposes of calculating registration fees and there is no proposed maximum value of the offering)