With the majority of the world hunkered down at home throughout the last few COVID-19–dictated months, many are turning to streaming platforms for entertainment. As Spotify continues to dominate the global music streaming market, many were surprised to see that although Spotify has continued to grow during 2020, its rate of growth has declined since quarter one.
Total paid premium users grew from 130 million to 138 million, and total active monthly users grew from 232 million to 299 million, according to data from Spotify’s recently released second quarter earnings report. Although this increase is certainly good news for Spotify, total revenue only rose two percent from quarter one, and this growth was largely attributed to paid subscribers. Ad revenue for the platform dropped a whopping 21 percent as advertisers became more conservative during the pandemic.
Spotify’s net loss increased $329 million from last year’s same quarter, and average revenue per user dropped seven percent. With 6,049 full-time employees around the world, the streaming behemoth’s operating expenses rose 48% year over year, and are well above forecast according to the company.
Spotify CEO, Daniel Ek, however, remains confident about Spotify’s performance, stating,
“We had a very strong quarter. I’ve never been more bullish about where we are today and our future opportunity. There are still billions of people who have yet to discover on-demand music streaming or listen to a podcast, and many more we have yet to reach in markets around the world.”
The new data comes after Spotify’s recent launch in 13 new European markets, including global top 20 streaming market, Russia. Spotify also continues to spearhead its path in the podcast market, increasing its catalog by 50 percent, and netting exclusive, multi-year licensing deals with The Joe Rogan Experience and The Michelle Obama Podcast.
Read Spotify’s second quarter earnings report here.
Featured image: Chris Ratcliffe/Bloomberg
