Spotify users grow by 30% to 248 million year on year with subscribers up 31% to 113 million according to the streamer’s recently published Q3 2019 financial results. Total Monthly Active Users (MAU) grew 30% year on year to 248 million well ahead of expectations with South East Asia and India leading the charge. The streamer also noted that long term retention of users driven by innovation in its product has contributed to the strong growth.
Spotify finished Q3 with 113 million Premium Subscribers globally up 31% year on year led by strong performance in both Family Plan and Student Plan take up. The Family Plan received a number of product updates such as enhanced parental controls, a Family Mix playlist and a family hub to manage all the settings. September saw the expansion of Spotify’s Duo pilot from the original 5 pilot markets into an additional 14 markets including most of Latin America. Additionally, the streamer kicked off its annual ‘back-to-school’ promotion of the Student Plan, a campaign that ran across 17 markets including the US and parts of Europe. There is also a US partnership with AT&T, which offers Spotify Premium as an add-on to select wireless plans offering a 6-month free trial to eligible users.
In August Spotify launched a test of a new 90-day free trial offering to Standard and Student Plans with Family Plan added in October. The company believes the 90-day trial will have a positive benefit on growth and retention in the future. Churn rates also improved and are thought to be half that of its competitors due to greater engagement by its users.
Total revenue of €1,731 million grew 28% year on year in Q3. Premium revenue was €1,561 million, up 29% year on year while Ad-Supported revenue was €170 million up 20% for the year.
Podcasts continued their exponential growth in podcast hours streamed (39% quarter on quarter for 3Q 2019), albeit off of a small base. Podcast adoption has reached almost 14% of total MAUs. The US accounts for the largest share of podcast streams but share of listening is higher and growing faster in several European countries. For music listeners who do engage in podcasts, the streamer is seeing increased engagement and increased conversion from Ad-Supported to Premium plans.
Spotify now has more than 500,000 podcast titles available on the platform and Q3 saw the launch of 22 original and several other exclusive titles from Spotify Studios, the release of a number of Gimlet and Parcast originals, the introduction of El Primer Café in Colombia, and London, Actually in the UK.
Spotify for creators
Spotify’s platform for creators, Spotify for Artists, now has more than 465,000 monthly active artists on the platform and these now account for ~80% of the streams on Spotify. In September, Spotify acquired SoundBetter, a music production marketplace for artists, producers, and musicians with 180,000 registered users.
The published financials predict further improvements in both users and revenue, but the streamer is still predicted to make a loss on the year.
