Spotify now has 96 million paying subscribers

Spotify is closing in on 100 million paying users, hammering home its position as the no. 1 company in streaming music.

In its latest quarterly earnings, the streaming company revealed that it now has 96 million paying subscribers around the world. That’s up 8 million in three months, and 36 percent year-over-year. The company also made its first ever quarterly operating profit. But not all the news is good.

Spotify posted quarterly operating profits of 94 million euros ($107 million). However, it noted that this was largely thanks to a fall in its stock price, which costs like taxes on stock options. Without this, Spotify would have only made a little over one quarter of this figure.

Another metric that’s disappointingly down is the average amount Spotify pulls in from each user. While the number of paid subscribers rose, so too did the number of free ones: increasing 29 percent year-over-year to 207 million. Average revenue per user fell 7 percent year-over-year to around $5.58.

Spotify also noted that it is buying podcasting startups Gimlet and Anchor, and will spend between $400 million and $500 million on such acquisitions in 2019. Podcasts are a smart move for Spotify because they offer one way to get around the massive royalty structures in place for it to stream music owned by major labels.

Going forward, the company expects to hit 97 to 100 million paying subscribers in the March quarter. Over the entirety of 2019, it expects to hit 117 to 127 million paying subscribers.

And in the Apple corner…

By comparison, Apple Music was reported in November as having 56 million subscribers. However, these are likely a mix of paying customers and people on Apple’s free trial. Nonetheless, Apple has a big advantage in the fact that — while Services are important — it’s not Apple’s only way of making money. This means that it can afford to play the long game, knowing that no rivals have the same deep pockets that Apple does.

Which streaming music platform, if any, do you use? Let us know your thoughts in the comments below.

Source: FT and Investors