Three months ago, Spotify predicted that user growth would start declining, because COVID-19 had prompted so many people to sign up than expected. Today, the audio giant was proved right, as new signups fell to nine million new users in the most recent quarter. That said, slower growth isn’t always a bad thing. Of that nine million figure, seven million users signed up for Premium, versus just two million who went ad-supported. It means that Spotify was also able to announce a second successive quarter of profitability after a long period of losses.
The total number of Spotify users now stands at 365 million, of which 165 million are paying for Premium, while the remaining 210 are ad-supported. Converting more of Spotify’s vast ad-supported user base into Premium users is one way to ensure the company remains profitable. Another, of course, is to boost its growing advertising business, which has been bolstered by Spotify’s numerous podcast offerings. The company said that it saw “triple digit” year-on-year gain in ad-sales for the company’s owned podcast outlets, including The Ringer, Parcast and Gimlet.
The last three months has seen Spotify intensify work to push users toward cheaper forms of audio content than music. It says that Joe Rogan’s podcast has performed “above expectations,” while shows out of The Ringer saw big bumps in listenership as the NBA headed into the playoff season. No mention this month of how many people are tuning in to listen to former President Barack Obama and Bruce Springsteen hang out, which was the second biggest podcast on the platform from the start of the year.
As for the future, Spotify says that it’s hoping to add at least 12 million more users in total, and at least another five million more paying customers. It is still expecting to reach the coveted 400 million user figure by the end of the year, although given the uncertainties still present with COVID-19, you never can be sure.
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