Wednesday, February 03, 2021
Still in the red
Spotify has 150 million subscription customers
Although the number of users of the streaming service Spotify is increasing, it is slipping deeper into the red. Founder Ek hopes for an upturn through a larger podcast offer. The Swedish company plans to gain 34 million more premium subscribers by the end of the year.
The music streaming market leader Spotify has exceeded the threshold of 150 million subscription customers. The Swedish company ended the past quarter in the red again, while the average revenue per paying user continued to decline.
The number of subscription customers rose within three months from 144 to 155 million, as Spotify announced. At the beginning of the corona pandemic, there was a dent in Spotify use when familiar routines such as going to work or going to the gym were no longer applicable. Business has since returned to normal. This year Spotify wants to have up to 184 million paying customers.
Including the free version with advertising and limited functionality, Spotify recently had a total of 345 million users. The number two in the market, Apple Music, last spoke of 60 million subscription customers in summer 2019. In contrast to Spotify, the iPhone group does without a free variant.
The quarterly sales of Spotify rose year-on-year by 17 percent to 2.17 billion euros. At the same time, the average revenue per customer fell by eight percent to 4.26 euros – among other things due to unfavorable exchange rates and growth in countries with lower subscription prices. Spotify is counteracting this by increasing the price of family subscriptions in some markets. The bottom line was there was a loss of 125 million euros in the last quarter after a loss of 209 million euros a year earlier.
In order to make Spotify the contact point for all kinds of audio content, founder and boss Daniel Ek is relying on the expansion of the podcast offer and bought several companies active in the business. Most recently, every fourth user accessed podcasts on the Spotify platform.
Spotify shares temporarily lost more than seven percent in early US trading on Wednesday after the outlook disappointed investors. Ek emphasized in a conference call with analysts that the company is cautious with its forecasts in view of the uncertainties caused by the Corona crisis.
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