Spotify now has 165 million Premium subscribers, a fifth more than a year earlier. More than 45 percent of all active Spotify users now have a paid subscription. In total, there are 365 million monthly active Spotify users, less than what the company expected.
The number of monthly active Spotify users increased by 9 million users in the second quarter compared to the first three months of 2021. This is below expectations, according to the streaming service, mainly because fewer new users were added in the first half of the second quarter. For the second quarter, Spotify targeted 366 to 373 million active users.
The failure to meet expectations is partly due to the corona pandemic. Spotify says it has stopped advertising campaigns in certain markets ‘due to the gravity of the pandemic’, which would reduce the number of new active users. In addition, there would have been an ‘issue’ with how new users can sign up to Spotify. It would be a problem with a global platform, without going into details. This problem should have been resolved by now.
Despite the problems mentioned, the number of active users rose to 365 million, 22 percent more than a year earlier. Of those 365 million users, 210 million have no subscription and the revenue comes from advertising. While there are more free accounts than Premium accounts, those Premium accounts do deliver much more to Spotify.
Premium accounts yielded Spotify 2 billion euros in the previous quarter, while free accounts yielded ‘only’ 275 million euros. Free accounts therefore ‘only’ account for 11.8 percent of Spotify’s revenue, while 55 percent of all active users have a free account. Gross profit was 663 million euros, 38 percent more than a year earlier.
Finally, Spotify writes that it has 2.9 million podcasts on the streaming service at the end of June, three hundred thousand more than a quarter earlier. The percentage of active users who listen to podcasts also noted a ‘modest’ increase, without reporting concrete figures.