Spotify reports ‘remarkable year,’ investors flee
The pandemic hasn’t hurt Spotify.
Earlier this week, the streaming giant reported a 17% lift in revenue for its fourth quarter and now boasts 345 million monthly active users, up from 271 million or 27% year-on-year, with “paid” memberships blowing up to 155 million, versus 124 million a year earlier.
That’s a gain of 11 million new, premium subscriptions in just three months, the most for any quarter in 2020.
Spotify, which generates money from advertising and subs, added revenue of $2.168 billion (against $1.975 billion in Q3), with an operating loss of $69 million loss (the corresponding figure was $77 million in Q4, 2019 and $40 million in Q3, 2020).
Musicians baulked at Spotify’s expensive deal last year to bring the Joe Rogan Experience in house. It’s beginning to pay off.
Rogan’s exclusive podcast was No. 1 in 17 markets, and drove subscriptions and engagement, according to the company’s quarterly earnings report. By year’s end, Spotify had 2.2 million podcasts live on its service, up from 1.9 million podcasts in Q3.
Daniel Ek’s company noted 25% of its total user base plugged into podcasts during the period, up from 22% in Q3 and 16% in the fourth quarter of 2019.
“We have increasing conviction in the causal relationship between the growth in podcast consumption driving higher [long-term value] and retention among our user base,” Spotify said in its shareholder memo.
According to its own estimates, Spotify should add 60-80 million users this year, lifting its global base to the magical 400 million mark. The Sweden based-tech giant is targeting another 17-29 million paid memberships for the year, a slower rate of growth than it reported for 2020, when 31 million new subs sign up.
Despite the solid performance, capping a “remarkable year” for Spotify which “met or exceeded our guidance by nearly every metric”, according to Ek, investors remain nervous about what the future holds, and whether Spotify has peaked.
Spotify’s revenue and subscriber count were at the low end of analysts’ expectations, causing its share price to fall by as much as 9% during trading Wednesday (3rd February) on the New York stock exchange, ripping out more than 5.27 billion of market capitalisation.
By close of trading Thursday, stock was trading at $314.7 for a market cap of 58.86 billion.
This article originally appeared on The Industry Observer, which is now part of The Music Network.