Spotify reaches 108 million paying subscribers
Spotify announced this week that it had reached a milestone of 108 million paying subscribers and 232 million monthly active user.
The Swedish music streaming company, which is currently available in 79 countries including South Africa, Egypt, Tunisia, Morocco and Algeria, grew its subscriber base by 31% year on year, according to its second-quarter (Q2) report.
The company reported a revenue of €1.7bn ($1.8bn) while its premium subscription revenue of €1.5bn grew 90.1%. A net loss in Q2 was estimated at €3m.
"Our better than expected loss in the quarter was a result of higher gross profit and lower than expected spend across artist marketing, R&D, and G&A,” the company said in the report, which was directed to its shareholders.
Meanwhile, the average paying Spotify subscriber across the world paid €4.86 in Q2, down less than 1% year on year, but down 2% excluding the impact from foreign exchange rates.
Quarterly ad-supported revenue of €165m grew 34% year on year and was up by €39m on the €126m reported in Q1 of this year.
By the end of the second quarter, Spotify projects that paying subscribers will reach 110-14 million, while its monthly active users will be between 240 and 245 million. By the end of the year, it expects to cross the milestone of 250 million monthly listeners.
The report places its paid-tier at about double the amount of its main competitor, Apple Music, which was estimated to be at 60 million as of June 2019.
The company also wanted to diminish worries about prolonged negotiations it had with major record labels. According to a source who spoke to Variety, negotiations with Warner Music are ongoing, leaving Universal, the world’s largest music company, as the other label that has not renewed its deal with Spotify.
“This is the sixth round of label negotiations we’ve worked through in our 13-year history,” it said, “and, while it is typically a long drawn-out process, it has become part of the normal cadence of the business.”
Spotify cofounder and CEO Daniel Ek also pointed to Africa, Russia and South Korea as prime target markets for growth, and said its troubled launch in India was “growing in line with expectations.”
He also said the company placed itself “in the early stages of subscriber growth” and mentioned projects like vertical videos and the Spotify Singles feature as “enabling artists to connect with fans in bigger ways.”
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