Spotify experiences subscription gains during the pandemic


Emir Dalgıç | Wikimedia Commons

Parvesh Rudher

Spotify has recently seen a boom in its subscriptions after releasing its first quarterly report of the year.

Spotify reported on March 31 that its total monthly active users grew to 356 million, bringing 11 million new listeners to the service. The 24% increase from the first quarter shows a strong comeback compared to the tough beginnings of last year.

Spotify’s number of premium subscriptions also grew, increasing to 158 million accounts. This 21% gain in paid subscribers shows a confident spike in Spotify’s efforts to return back to normal.

Total revenue of €2,147 million reported in the first quarter reflects an increase of 16% from earlier quarters, due to the paid subscriber outperformance.

However, Spotify executives have warned that there’s still concern for falling back into a peak pandemic status as the markets that rely on revenue and subscriber growth still endure pandemic spikes and lockdowns.

The subscription growth seems to be the result of stay-at-home precautions since consumers confined in their homes have resorted to their smartphones and speakers as methods of entertainment.

With Spotify adding new streaming services, such as podcasts that are steadily rising in popularity, the platform is slowly growing its ability to convert free listeners to paid subscribers.

Streaming over 2.2 million podcasts as of now, this new streaming service is helping Spotify gain new listeners, including first-time podcast listeners, due to the superstar-filled roster of hosts including Michelle Obama, Joe Rogan and Kim Kardashian.

“We do believe Joe Rogan has contributed positively to user growth,” finance chief Paul Vogel said on an investor call.

Spotify has announced its partnership with other audio services, such as Anchor and WordPress, enabling content creators to reach new audiences and grow their work using their services, from creating websites to publishing written content as audio.

With ongoing efforts to add new streaming services to bring in new users, Spotify has been met with competition from numerous other streaming services and brings in different regulations for their services to stay relevant.

Currently, Spotify faces an increase in competition in podcasts from companies like Inc. and Apple Inc., who have begun to roll out podcast services on their platforms as well.

Amazon has already purchased the podcast producer Wondery, and Apple has unveiled a paid subscription podcast service in efforts to stay in the race with Spotify.

To stay ahead of its competitors, Spotify announced its own paid subscription podcast platform as well. Though, for its first two years, it will not charge users to use the platform or collect any money received by podcasters’ from subscription revenues.

“The world isn’t even. In some parts, we’re seeing recovery much faster than others,” said Spotify Chief Executive Daniel Ek. Ek added that the markets that the company targets for increased growth, such as India and Brazil, are still clearly hit.

Spotify remains unsure but hopeful for future gains, forecasting that it will see an increase of total monthly users rising to 366 to 373 million and an estimated increase of 126 million premium subscribers in the second quarter.