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Spotify grows 27% on back of discounts in Q3

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THE MUSIC streaming service Spotify grew its subscriber base by 27% in the third quarter (Q3) of 2020, bringing its total to 144 million on the back of offering discounted plans which, conversely, brought them a loss of €101 million or $121 million in the quarter according to Spanish analytics firm Comprar Acciones.

In the Philippines, Spotify has been offering some free tier users premium access for three months at P129, the price of a one-month subscription. Other premium tiers such as daily (P15) or family subscription or six premium accounts (P194) are also available.

The promotions did work as the service beat analysts’ estimates of 142 million paid subscribers according to Refinitiv data. It also brought monthly active users to 320 million or up 29% in the third quarter compared to numbers recorded last year.

Spotify expects to have between 150 to 154 million premium subscribers by the fourth quarter of 2020 against a forecast of 152.5 million.

The company has consistently grown its user base since 2015.

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Spotify also reported an increase of 15% in subscription revenues in the third quarter of the year, bringing it to €1.79 billion, and a 9% increase in ad revenue.

The increases are attributed to the service’s entry in Russia and 12 other European markets in July. The company noted that the Russian launch was “the company’s most successful launch yet.”

Despite its growth on several fronts, Spotify still posted a loss of €101 million as discounted rates brought down revenue per user to €4.19 or -10%.

The loss is a massive reversal as in the same period last year, Spotify made €241 million in profit.

Spotify nevertheless is still the most subscribed music streaming service globally, with a 35% share of the market in 2019 according to statistics portal Statista. Spotify is followed by Apple Music at 19% and Amazon at 15%. — ZBC

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