As of March 31st, 515 million users have reportedly used Spotify’s streaming service on a monthly basis. In comparison to last year, there is a 22 per cent increase and a 5 per cent increase over the previous quarter. Spotify CEO Daniel Ek said that the figures constituted the service’s second-greatest quarter of user growth in its history and that the subscriber growth exceeded its guidance by 15 million. Meanwhile, there are already 210 million paid customers, up 15% from the previous year.
The milestone was reached by the audio streaming service during a quarter of streamlining and cost-cutting. The company revealed in late January that it will be eliminating 6% of its global workforce, which is expected to affect close to 600 employees. According to a recent announcement, a few of Spotify’s side projects, including the Wordle-inspired music game Heardle and the Spotify Live audio app, have been shut down. Spotify’s CEO Daniel Ek stated during the business’s most recent earnings call that “speed and efficiency” will be the company’s top priorities in 2023.
In its earnings report, which covers the first quarter of 2023, Spotify reported a net loss of €225 million, or roughly $248 million. This is down from a loss of €270 million (about $298 million) last quarter but contrasts with a net income of €131 million (around $145 million) during the same time last year. Losses like these are common for a company that often puts growth before quarterly profits. Because Spotify offers discounts and lower prices to draw clients to new areas, the average revenue per user decreased by 1% to €4.32 (about $4.77).
In addition, this earnings report makes no mention of the potential debut date for Spotify’s higher-quality HiFi tier. Back when the new service was first introduced more than two years ago, the business promised subscribers CD-quality lossless music. Technically speaking, HiFi is reportedly ready, but rumours suggest that Spotify’s initial plans to charge extra for HiFi were undermined by rivals Apple and Amazon, which give lossless streams to consumers at no additional cost. In response to a question on a recent episode of Decoder, Spotify’s co-president indicates that a lossless function is still “coming at some point,” though it’s unclear when that could happen.
In the music streaming space, Spotify is often regarded as having the most paying users compared to many music streaming services known. However, we cannot argue this claim because it has been years since rivals like Apple and Amazon have formally disclosed comparable data. With regard to monthly active users, Spotify’s 515 million subscribers fade in comparison to Tencent Music Entertainment’s apps’ 567 million monthly active users at the end of 2022 or the almost two billion users who, according to YouTube, were active on the platform in 2020. However, considering that Tencent Music’s statistics are dispersed throughout three separate streaming platforms (QQ Music, Kugou, and Kuwo), and YouTube is predominantly a user-generated video streaming service that also includes music, it is debatable whether these figures are directly comparable to Spotify.