Spotify up to 172m subscribers in Q3, revenue climbs 27%

Spotify continues to be the world’s biggest music streaming service.

It hit 172 million subscribers after a 19% growth year-on-year (YoY), while monthly active users (MAUs) grew at the same rate to 381 million in the three months ending September 30.

It expects MAUs to reach 400 to 407 million and premium subscribers around 177 to 181 million by the end of 2021.

Amazon and Apple Music do not release subscription figures but estimates put them at 55 million and 60 million respectively.

Revenue was up 27% to €2.5 billion (AU$3.85 billion) – close to what the Swedish company had forecast –mostly as a result of a 75% rise in advertising revenue to €323 million ($498.3 million) after it tumbled in 2020 during the pandemic.

Subscriber income increased by 22% to €2.178 billion ($3.36 billion).

The revenue rise was 7% up on the year’s second quarter while operating profit was €75 million ($115.7 million). It had over €3.23 billion ($4.98 billion) in liquidity and predicts revenue of €2.54 ($3.92) to €2.68 billion ($4.13 billion) in Q4.

The Average Revenue Per User of €4.34 ($6.70) was up 4% YoY, partly because of its price increases, it said.

“We had a very strong quarter,” Spotify CEO and founder Daniel Ek said.

“The business is doing really well and I’m pleased that we continue to deliver across the areas that are fundamental to our growth and long term strategy.”

Ek added that “the choppiness in the first half of the year was primarily due to COVID and is largely behind us” and Q3 was delivering on the strengthening of MAUs in the last half of Q2.

“All signs show that we are back to consistently delivering against our forecast. But we’ve also learned from the last two quarters and are responding faster to changes – most notably in a key market like India where we are now seeing a nice recovery.”

Spotify, which entered 86 new markets in 2021, reported user engagement advanced in “all regions” including “above-plan growth” in the Philippines and Indonesia.

Its momentum in India was also reflected in South Korea, Bangladesh and Pakistan.

“As we head into what’s historically our biggest quarter of the year, we are all hands on deck to make sure the positive trend continues,” Ek said.

“I feel really good about where we stand across all of the other aspects of the business overall.”

Of particular note was advances in podcasting with more than 3.2 million titles now on offer.

It claims to have beaten Apple Music in the field in the US.

Spotify did not reveal US or global consumer figures, but eMarketer last month predicted Spotify would hit 28.2 million monthly in the US by end of year with Apple Music at 28 million.

Globally, Spotify’s podcast MAUs were showing a growth indicated in Q2 and podcast consumption hours reached an all-time high with a 20% rise.

In March 2021, Spotify branched out to live audio with its buy-out of group audio app Locker Room which it rebranded as Greenroom in June.

“Audio is our right to win,” Ek summed up on an upbeat note.

“While we have been relentless in our pursuit of being the world’s largest audio platform, it’s still early days and we are just getting started.”