As of March 31, more than half a billion people used Spotify’s audio streaming service every month, according to the company’s latest financial report. This is 22% more than last year and 5% more than in the previous quarter. Spotify says it beat its own growth forecast by 15 million, marking the second-highest quarterly growth in the service’s history.
Meanwhile, the number of premium subscribers has reached 210 million and is 40% of the total user base. In comparison, Spotify had 46% of premium subscribers in the first quarter of 2019, 45% in the first quarter of 2020, 44% in the first quarter of 2021, and 43% in the first quarter of last year.
The first quarter of 2023 was marked for the company by the process of optimization and cost reduction. In late January, Spotify announced layoffs of 6% of its global workforce – an estimated 600 employees affected. In addition, several side projects of the service – the Clubhouse-style Spotify Live audio application and the Wordle-style Heardle music game – were closed.
CEO Daniel Eck said during the report that Spotify’s key priorities for 2023 are “speed and efficiency.”
The company posted a net loss of $248 million and a net profit of $145 million in the first quarter of 2023. These numbers are not unusual for a business that typically prioritizes user growth over quarterly revenue. Average revenue per user fell 1% to $4.77, likely due to the lower prices Spotify is introducing to attract customers in new markets.
The report did not mention the launch of a high-quality HiFi level, which the company announced two years ago. It’s said to be technically ready, but competitors have dashed Spotify’s hopes of charging extra for it (Apple and Amazon offer such a service at no extra charge).
Spotify now has the most paid users of any audio streaming service. As for the number of monthly active users, Tencent Music Entertainment (567 million as of the end of 2022) and YouTube (2 billion as of 2020) still dominate. But these numbers are probably not the right comparison, since Tencent Music is spread over three different streaming services (QQ Music, Kugou and Kuwo), while YouTube is primarily a video streaming service.
Source: The Verge, Techspot
