Spotify reports $118 million loss despite adding more users, paid subscribers
Spotify bled about $118 million in profit in the third quarter of 2020, despite its active monthly user count increasing 29% during the period.
Credit: Spotify
The chief Apple Music competitor now has 320 million monthly active users and 144 million paid subscribers. Spotify attributed the growth in both of those sections to marketing in India and a launch in Russia and 12 other markets.
Despite reporting revenue growth of 14% to about $2.32 billion, the streaming service still reported a loss of $118 million. In the third quarter of 2019, the company actually made a profit of $282 million.
In the year-ago quarter, Spotify had 248 million monthly active users and 113 paid subscribers. Year-over-year, Spotify revenue per-user dropped about 10%. Largely, that's due to the fact that the service is luring in new subscribers with discounted plans.
Several months after securing an exclusive deal with "The Joe Rogan Experience," Spotify says that the podcast is now the platform's most popular. There are about 1.9 million podcasts available on the streaming now, up from $1.5 million quarter-over-quarter. More users appear to be engaging with podcasts, too, representing about a 1% increase from Q2 2020.
Apple Music, for its part, reported that it had 60 million paying subscribers as of last year. The Apple music service does not have a free tier, and while it doesn't offer subscriber counts as frequently as Spotify, some light could be shed on its performance on Apple's Thursday earnings call.
Credit: Spotify
The chief Apple Music competitor now has 320 million monthly active users and 144 million paid subscribers. Spotify attributed the growth in both of those sections to marketing in India and a launch in Russia and 12 other markets.
Despite reporting revenue growth of 14% to about $2.32 billion, the streaming service still reported a loss of $118 million. In the third quarter of 2019, the company actually made a profit of $282 million.
In the year-ago quarter, Spotify had 248 million monthly active users and 113 paid subscribers. Year-over-year, Spotify revenue per-user dropped about 10%. Largely, that's due to the fact that the service is luring in new subscribers with discounted plans.
Several months after securing an exclusive deal with "The Joe Rogan Experience," Spotify says that the podcast is now the platform's most popular. There are about 1.9 million podcasts available on the streaming now, up from $1.5 million quarter-over-quarter. More users appear to be engaging with podcasts, too, representing about a 1% increase from Q2 2020.
Apple Music, for its part, reported that it had 60 million paying subscribers as of last year. The Apple music service does not have a free tier, and while it doesn't offer subscriber counts as frequently as Spotify, some light could be shed on its performance on Apple's Thursday earnings call.
Comments
AT&T, Disney, Viacom and Comcast won't bite. They are too busy paying off debts from their Time Warner, Fox, Paramount and Universal purchases. For Disney and AT&T in particular it looks really bad. Disney's debt load is massive and while AT&T's debt is smaller, they don't have anything like Disney+ to pay it off.
Were Netflix to buy Spotify, I guess that would be fine as Google, Amazon and Apple all own video and music streaming services (YouTube, YouTube TV, Google TV, YouTube Music; Prime Video, Prime Music; Apple TV+, Apple Music plus whatever they split iTunes up into).
But were Google, Amazon or Apple to buy Spotify, the antitrust regulators would freak out. This isn't the same environment that allowed Google to buy Songza, Apple to buy Beats etc. a few years back.
Maybe Sirius XM can buy it and merge it with Pandora? That would probably be the best outcome. Spotify does need to continue to exist in some form. And while that combination would have a huge market share, Google, Apple and Amazon still have their streaming music offerings so it would be far from a monopoly.
Yeah this isn't about money at all but the poor little developer they don't give a damn about.
The best outcome for Spotify is merged with or buy by Netflix. Similar service. Netflix is actually very profitable and with many of their own customers. Combined the two groups of customers, and it will be huge. But Spotify is greedy and the price will be high.
The attitude is better.
p.s. I don't use Apple Music or whatever Spotify is. I have several hundred meg collection in Apple's iTunes Match so don't have time or need to listen to anything else. Apple One may just induce me to try Apple Music though.