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, the company noted that this was largely thanks to a fall in its stock price, which affected costs like taxes on stock options. Without this, Spotify would have made only a little over one-quarter of the profits.
Another metric came in disappointingly down: the average amount Spotify pulls in from each user. Average revenue per user fell 7 percent year-over-year to around $5.58.
Also, while the number of paid subscribers rose, so did the number of people who use Spotify’s free tier. Freeloaders increased 29 percent year-over-year to 207 million.
Spotify buys podcasting startups Gimlet and Anchor
Spotify also noted that it is buying podcasting startups Gimlet and Anchor. The company says it will spend between $400 million and $500 million on such acquisitions in 2019.
Podcasts seem like a smart move for Spotify because they offer one way to get around the massive royalty structures in place for streaming music owned by major labels.
Going forward, Spotify expects to grow to between 97 million and 100 million paying subscribers in the March quarter. Over the entirety of 2019, it expects to hit 117 million to 127 million paying subscribers.
And in the Apple corner…
By comparison, Apple Music reportedly reached 56 million subscribers in November. However, these are likely a mix of paying customers and people on Apple’s free trial. Nonetheless, Apple possesses a big advantage over Spotify. While services revenue is increasingly important to Cupertino, it’s not Apple’s only way of making money. This means Apple can afford to play the long game, knowing that no rivals possess the same deep pockets it does.
Which streaming music platform, if any, do you use? Let us know your thoughts in the comments below.