Spotify claims its subscriber growth is double Apple Music’s
Streaming giant Spotify has reported that its monthly active users (MAUs) has grown 30% year-on-year to 248 million while subscribers now rank 113 million.
These reflect strong growth in emerging markets as India and South America, and its ability to retain subscribers primarily from investment in podcast products.
Premium subscribers now account for 45.6% of all users, with Premium outpacing Ad-Support year-on-year.
In comparison, the figures at the end of June were 232 million MAUs and 108 million premiums. They were, respectively, 217 million and 100 million at the end of March.
Spotify claims its subscriber growth is double that of Apple Music.
“We continue to feel very good about our competitive position in the market,” Spotify told shareholders.
“Relative to Apple, the publicly available data shows that we are adding roughly twice as many subscribers per month as they are.
“Additionally, we believe that our monthly engagement is roughly two times as high and our churn is at half the rate.
“Elsewhere, our estimates imply that we continue to add more users on an absolute basis than Amazon.
“Our data also suggests that Amazon’s user base skews significantly more to ‘ad-supported’ than ‘premium,’ and that average engagement on our platform is approximately three times [theirs].”
Spotify quarterly revenues rose 28% to €1.73 billion (A$2.80 billion).
It posted a profit of €54 million ($87.6 million) compared to a loss of €6 million ($12.98 million) a year ago, attributing it to the rising subscriber figures helping to slow growth in operating expenses.
These figures give the company greater bargaining power with record companies as streaming now makes up 75% of labels’ revenue.
It expects to increase subscriber figures by the end of 2019 – to between 255 million to 270 million MAUs, and between 120 million to 125 million subscribers.
CEO Daniel Ek said in an earnings call with media, “You’ll remember in February that we announced our intention to become the world’s leading audio platform.
“We made the strategic bet that music and podcasts are additive and that users would enjoy having podcasts as part of their Spotify experience.
“We’re seeing evidence that this step is paying off with signs of increased engagements and higher conversion rates from free to paid. We’re encouraged, and we intend to continue to invest against this early success.”
Spotify expects a return to an operating loss of €1 million ($1.62 million) to €1.3 million ($2.1 million).
However, the financial market gives the Swedish company a thumbs-up.
“While Spotify expects to remain loss-making this year, we can see a clear route to sustainable profitability if recent trends continue,” wrote financial service company, Hargreaves Lansdown.
Initiatives that appeal directly to artists have the potential to boost revenues and reduce content costs.
Spotify also announced that its CFO Barry McCarthy will retire from the company on January 15, 2020. He will be replaced by Paul Vogel, currently its VP of financial planning and analysis, treasury and investor relations.
Ek said, “During his almost five years with us, Barry played a pivotal role in our direct listing and has been instrumental in helping to establish us as a trusted public company.”