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Music

Spotify announces 75 million paid subscribers but is still losing money

by Matthew Mills / May 02, 2018, 10:10 PM

Spotify announces 75 million paid subscribers but is still losing money

It has been roughly a month since Spotify joined the market, and the company released its first quarter numbers today. We recently learned Spotify has 170 million subscribers. What we learned today was that only 75 million of those are paying for the service. The company had 71 million in Q4 of 2017 (7 percent increase), but it was a 45 percent increase on the year to year scale. The company's operating loss is down compared to last year by roughly half, but it still has a long road ahead to get where it needs to be. The company is forecasting a better second quarter and are hoping to hit somewhere near 83 million premium users. Spotify has increased the length of its trial services and is still confident in its student and family plans ability to retain customers. These appealing deals come along with its partnership with Hulu as methods to recruit and retain key demographics.

Spotify still faces a challenge

Spotify is working hard to keep a healthy growth rate and not lose existing customers. Recently announced changes to the company's free service show how important it is that Spotify keeps a hold on that section of the market, which is where it will need to find its growth. Spotify has a head start but stiff competition from the likes of Apple and Google. Google will (relatively) soon roll Play Music into YouTube and Apple is coming up behind Spotify with 40 million paid subscribers. Apple's current growth is near or even slightly ahead of Spotify but at the current rate is not enough to catch up. Spotify will have to do at least mildly better over the next year to keep its lead and keep investors happy.

source: Spotify

image credit: Business Wire

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25 Comments

1. toukale

Posts: 669; Member since: Jun 10, 2015

Spotify is doing everything they can and they are still losing money 10 years later. Since they can't make a profit, they are hoping to distract investors by practically given away their premium access service in order to show user growth. The problem for spotify is they are no longer a startup that forgo profits to sigh up users. They are having such issues with all the big/dip pocket players not even trying to compete. Both Amazon, Google and Apple have shown little love to their music apps. If those companies ever decides to throw resources and compete in that arena, then spotify would be finish. Those contracts are not going to get any cheaper overtime.

posted on May 02, 2018, 9:32 PM 0

3. piyath

Posts: 2445; Member since: Mar 23, 2012

Their business model is not sustainable. People can use their entirely free service with ads for ever and that's what exactly happening.

posted on May 02, 2018, 9:41 PM 0

16. RebelwithoutaClue unregistered

Remember that a lot of their losses are from the interest and startup capital they have to pay back. This will shrink in time up to the point they can make a profit.

posted on May 03, 2018, 3:18 AM 1

2. piyath

Posts: 2445; Member since: Mar 23, 2012

Apple will win in the end. That's inevitable. They have all the resources in the world to finish Spotify. Sooner or later it'll happen.

posted on May 02, 2018, 9:39 PM 0

9. ijuanp03

Posts: 660; Member since: Dec 30, 2014

"Sooner or later it'll happen" - it's been a couple of years and it didn't happen.

posted on May 03, 2018, 1:05 AM 6

12. kartik.07

Posts: 73; Member since: May 04, 2015

Apple added video to there app and google is mixing youtube with there music are moving much faster in adding content and have almost unlimited resources compared to Spotify. If these companies get more serious eventually new user will no pickup Spotify and it will slowly die.

posted on May 03, 2018, 2:14 AM 1

13. midan

Posts: 3121; Member since: Oct 09, 2017

Couple of years is very short time, Apple is just starting with their music service. It's growing faster and faster.

posted on May 03, 2018, 2:15 AM 0

19. tedkord

Posts: 17464; Member since: Jun 17, 2009

That's funny, because I seem to recall predictions that Apple would already have destroyed them by now when the service first launched, yet Spotify did nothing but grow, and remains in front. Sounds just like the Android arguments that Leo moving the goalposts every time.

posted on May 03, 2018, 5:01 AM 1

21. RebelwithoutaClue unregistered

Spotify's growth is accelerating as well. So it won't be anytime soon that Apple surpasses Spotify.

posted on May 03, 2018, 6:41 AM 1

17. RebelwithoutaClue unregistered

And in the end, the consumer and artist will lose. It almost sounds like you want Apple to win and Spotify to end.

posted on May 03, 2018, 4:02 AM 1

27. Sammy_DEVIL737

Posts: 1529; Member since: Nov 28, 2016

Typical piyath-etic s#eep. He wishes Spotify to be dead as Apple music haven’t surpassed the Spotify in terms of user base.

posted on May 03, 2018, 11:36 AM 1

4. CreeDiddy

Posts: 2275; Member since: Nov 04, 2011

Apple is just waiting to take over this market in two years...

posted on May 02, 2018, 10:05 PM 0

11. ijuanp03

Posts: 660; Member since: Dec 30, 2014

It's been two years and there were no take overs. Apple will always remain in #2. Just as where they are in the mobile phone market share.

posted on May 03, 2018, 1:08 AM 4

18. tedkord

Posts: 17464; Member since: Jun 17, 2009

That's what you said two years ago when Apple Music launched, yet Spotify has grown faster than them.

posted on May 03, 2018, 4:57 AM 0

5. rkoforever90

Posts: 477; Member since: Dec 03, 2011

spotify is not available in a lot of markets especially Asia and middle east unlike apple music. why they never bother to expand to these market where apple music is doing pretty well.

posted on May 02, 2018, 11:53 PM 0

10. ijuanp03

Posts: 660; Member since: Dec 30, 2014

Nahh... I live in Asia and Spotify is being used by almost everyone. Apple music is nowhere to be found. Apple music is just popular in the US.

posted on May 03, 2018, 1:06 AM 3

22. RebelwithoutaClue unregistered

Spotify is available in those markets, not sure where you got the idea that they aren't. And Spotify is even more popular in poor areas since they have a free ad-supported version of their service.

posted on May 03, 2018, 6:44 AM 0

25. libra89

Posts: 2316; Member since: Apr 15, 2016

+1 Also, I don't know about Apple Music but Spotify is also able to run on slower connections too. The option is there, which is awesome.

posted on May 03, 2018, 8:43 AM 0

28. Sammy_DEVIL737

Posts: 1529; Member since: Nov 28, 2016

It might be available in other parts of Asia but it still not available in India. Thats sad though. But sideloaded it once by downloading it using VPN & I can say it has one of the best music recommendation list according to my interest, the type of songs I listen.. The recommendation thing is miles ahead than Apple or Play music.

posted on May 03, 2018, 11:46 AM 1

30. RebelwithoutaClue unregistered

I don't know about Apple Music, but I switched from Google Music to Spotify. If I pick a playlist called lowrider RnB (or similar wording), I don't want to listen to the crap of Justin Bieber or Ariane Grande. Had to dislike song by them a few times before GM finally understood I don't like to hear them.

posted on May 03, 2018, 6:02 PM 1

6. youssef44

Posts: 547; Member since: Apr 29, 2014

Make the subscription cheaper then will get more new paid subscribers

posted on May 03, 2018, 12:09 AM 0

7. Busyboy

Posts: 738; Member since: Jan 07, 2015

$10 a month is already a great value.

posted on May 03, 2018, 12:15 AM 2

14. naveenstuns

Posts: 184; Member since: Feb 19, 2012

lulwut? with that price they can't even get 1% market in emerging market Here in india amazon prime yearly subscription is $15 and it comes with prime video and ecommerce benefits