Spotify reaches 100 million subscribers
100 million hit the spot.
After pitch battles with Apple over issues with their app on the Apple App Store and Amazon looking like they’re about to enter the streaming market with a Hi-Res music service, Spotify must be glad of some positive news.And that news is they are the first music streaming service to hit 100 million paying subscribers worldwide. If that sounds impressive, once the number of users of their free, ad-supported tier are added into the mix, the number of monthly active users reaches 217 million.
The figures were released as part of the company’s first quarter earnings report and reflect a subscriber boost of two million Indian users who joined in February when the service was rolled out there. Recent launches have also taken place in the Middle East and North Africa.
Industry analysts had predicted an annual increase from 75 million to 99 million subscribers at this point so the extra million that were reported helped push Spotify shares up by an initial 5%.
For the time being, this puts Spotify ahead of the music streaming pack which includes Apple Music as their closest rival with 50 million global subscribers followed by the likes of Google Play Music and Amazon Music Unlimited.
However, looking at the US subscriber numbers in isolation switches Apple and Spotify into first and second place respectively with the Cupertino company edging the Swedish streaming giant 28 million paid subscribers to 26 million.
Spotify does have some challenges ahead with Amazon’s rollout of a free tier on its Prime/Music Unlimited service enabling Echo speaker users to access music just by asking for it. Spotify’s ad-supported free service is not enabled on Amazon’s devices although the premium Spotify service is but it means that the online retail giant can capitalise on listeners who are not yet ready to move to a paid for music service.
Additionally, Amazon’s rumoured Hi-Res music streaming service will leapfrog Spotify, who do not offer this option, leaving them even further behind the growing group of services such as TIDAL, Deezer and Qobuz that do offer high definition audio.
However, given the boost in subscriber numbers, Spotify may feel that they have got their business model right for the time being. Furthermore, they project 127 million subscribers by the end of the year.
Where the numbers don’t prove quite so reassuring is in the area of profit and although revenue rose 33% to €1.51 billion ($1.69 billion), the average revenue per user of €4.71 was flat, since many of the new subscribers had been attracted by promotions. The overall result was a loss of €142 million ($158.3 million) for the quarter.
Spotify continues to put efforts into attracting more listeners with more personalised playlists, a new couples only pricing plan and improved targeting of ads in their 250K available podcasts.
Source: www.theverge.com, www.digitaltrends.com, uk.reuters.com
Image Source: Spotify, time.com
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