Spotify’s total number of subscribers has grown dramatically in the past two quarters. It now sits at 188 million, and this number is rising. The company has said that this is a direct result of a strong growth in MAUs, or monthly active users.
188 million premium subscribers
The subscription music streaming service, Spotify, has hit the 188 million subscriber mark. Its free tier allows users to stream music without advertisements, but paid subscribers get a slew of features.
For example, they can edit and share playlists with others, and there are social media sharing integrations. Spotify also offers a Group Session option, which allows multiple users to stream music simultaneously.
The company is available in 183 countries. In the US, Spotify has 65 million subscribers. Most of the company’s user base is under 35 years old.
The company’s free tier includes ad-free access to the platform, plus a selection of playlists. Premium users get improved sound quality, ad-free music listening and other special features. As of this month, new users can try one month of Premium for free.
The service has expanded its user base in recent months, especially in Latin America and Europe. Spotify had 422 million unique users in Q1 2022. But it has also been battling high-priced royalty fees. Earlier this year, the company renegotiated licence deals with music labels.
Spotify has been making a big bet on podcasts. It now offers more than four million podcast titles, up from 1.5 million a year ago. While it does not publicly release the number of listeners, Spotify claims a 14 percent increase in podcast listeners in Q2.
Another tidbit of information: Spotify’s free tier isn’t the only subscription tier to offer the aforementioned. Apple Music also has a hefty library of songs. Similarly, YouTube has 80 million paid subscribers.
The biggest challenge for the company, however, is the fact that it has no profits. Spotify’s operating expenses are rising significantly, as the company has been investing in acquisitions and expansion of its workforce. Also, Spotify has been hampered by the aforementioned royalty fees.
Nevertheless, the service has a chance to break into the 1 billion user club. If it can secure a user base as large as its competition, it can become a force to be reckoned with.
Whether Spotify can achieve that feat remains to be seen, but its free tier is already doing well.
188 million monthly active users (MAUs)
Monthly active users (MAUs) are a key metric used by social networking sites and other companies to assess the health of their business. A large number of users indicates that a site is experiencing a high level of engagement, which can be beneficial to the company’s marketing efforts. However, there are some arguments against using MAUs as a benchmark, claiming it creates unfair comparisons between competitors. Some companies require certain requirements to be met before they consider a user an active user.
Spotify reported a 19 percent increase in monthly active users (MAUs) in its second quarter. That was a five-million-user increase over its own guidance, and a 14 percent increase year over year. The increase was driven by an outperformance of the India market, as well as the growth of premium subscribers. But the company’s profit margins were lower than expected, and the company also blamed soft advertising and currency fluctuations for the drop.
Spotify announced that its total monthly active users will grow to 450 million in the third quarter. The company now expects revenue of about 3 billion euros in the quarter, while the operating loss is forecast to be EUR218 million. It also said it is expanding its podcasting efforts and is adding new original shows in the second half of the year.
While Spotify’s second-quarter figures were strong, the company warned that its forecasts for the third quarter are subject to a lot of uncertainty. This is due to the fact that it has switched to single estimates for its key metrics, namely, monthly active users, paid subscribers, and the number of premium subscribers.
According to LinkedIn, its members grew to a record 313 million in the first quarter, with the average professional spending seven minutes, 31 seconds on the network daily. Its membership grew to 135 million professionals in 2011, with an additional 135 million professionals joining over the past six months.
Twitter also revealed it has a 126 million monetizable daily active user base. In addition, the company’s Twitter posts saw its first real profit, as it posted a $100 million profit in the first quarter.
Growth in MAUs
Spotify, one of the largest providers of music streaming services, has announced an impressive growth in MAUs. The number of users has increased to a whopping 456 million in the last five years. It is now predicted to have over 1 billion monthly active users in the next five years.
The service had a record 19 percent growth in Q2 and a gross margin of 25.4%, which is a very good indicator of the company’s continued success. However, there were some disappointments.
While the total MAUs grew significantly, there was a deceleration in ad-supported MAUs. This was in part due to a weak macroeconomic environment and the impact of digital advertising costs.
Overall, the company beat Wall Street’s expectations on both revenue and earnings. They also provided strong Q3 and Q4 guidance for user growth and premium subscribers.
Although the company’s overall revenue growth was flat, it did see double digit growth in podcasting and music business revenues. The average revenue per user increased by six percent in the second quarter.
Premium subscribers grew by 14 percent in the second quarter. That was a big jump from the previous year’s figure of 13 percent. But the company expects a smaller growth in the second half.
Premium subscribers accounted for a majority of the total growth in MAUs, which is another sign of its continued success. During the quarter, the service added 7 million premium subscribers. The company’s overall subscriber count increased by 14 million over the same period, while the number of users on its individual plan grew by a staggering 16 million.
Overall, the number of users surpassed its own expectations by 5 million. Nonetheless, the company was unable to provide a precise figure for churn. Instead, it said that it has seen a decline in churn for its premium subscribers, although the numbers could be much smaller.
One of the most important developments was the “Car thing” (in-vehicle music control device) which was introduced in the fourth quarter of 2018. While it didn’t quite live up to its potential, it did offer some important learnings about hardware.
MAU growth in second quarter
Spotify’s monthly active users (MAUs) grew by 19% in the second quarter of 2021 compared to the same period last year. The platform attributed its growth to reactivation of older Gen Z users in Latin America and Europe. It also cited the success of its marketing campaigns in Asia.
During the quarter, the company added 19 million new MAUs. These numbers represent the highest quarterly MAU growth in Spotify’s history. At the end of the first quarter of 2022, Spotify had 180 million paid subscribers.
While subscriptions continue to grow, advertising revenue is growing at a faster rate. Advertising revenue was up 31% from the prior quarter. Ad-supported revenue reached a high of 13% of total revenue. In Q2 of this year, Spotify reported advertising revenue of $368 million. This was up from $275 million in Q2 of the previous year.
Premium subscriber growth was up 14% year-on-year. Spotify expects to add 6 million net new premium subscribers in the third quarter of 2022. Despite this growth, the company’s gross margin decreased to 24.6% in Q2 of this year from 25.2% in the prior year. However, the company anticipates that its advertising gross margin will increase in the coming years.
Podcasting grew at a strong double-digit rate. Spotify has invested over a billion dollars in podcasting acquisitions. The number of podcasts on the platform grew to 4.4 million at the end of the second quarter.
Spotify plans to launch audiobooks in the third quarter of this year. During the quarter, Spotify released 100 original podcasts globally. Spotify said the number of MAUs engaging with podcasts increased in “substantial double-digits” year-on-year.
The company’s global MAU count reached 365 million at the end of the second quarter. Spotify’s total revenue for the quarter was $2.9 billion. On a constant currency basis, Spotify’s revenue was up 19 percent. As for the company’s operating expenses, they grew by 38% year-on-year. During the quarter, Spotify incurred an operating loss of EUR194 million.
The company cited its efforts to invest in advertising technology across the globe as well as a strong growth in emerging markets as drivers of growth. Additionally, it is building out its content technology. Throughout the quarter, the company released new episodes of its Joe Rogan Experience and launched a new Fresh Finds playlist in thirteen territories around the world.
