Spotify starts the year with a small profit

The music streaming market leader gained around three million subscribers in the first quarter of the year and dared to raise prices further. In parts, however, Spotify falls short of its own expectations.

Obama and Springsteen also have an exclusive Spotify podcast.

AIn the past few days there was definitely no lack of news about Spotify: Co-founder and boss Daniel Ek signaled interest in buying Arsenal London. In some large markets, the family student and / or duo subscription are expensive – the price point 9.99 for the single subscription remains unchanged, as does the German market itself initially.

And last but not least, the Swedish service is starting to roll out the function announced in February, with which American podcasters can initially offer additional paid content via the in-house platform Anchor.

The numbers for the first quarter were less spectacular. At the end of March 2021, Spotify now had 158 million subscribers, an increase of 21 percent compared to the previous year, as the music streaming market leader announced on Wednesday. This corresponds to the upper end of the nevertheless cautious forecast. At the end of 2020, Spotify had around 155 million subscribers. For comparison: In the first quarter of 2020, Spotify was able to gain six million subscribers.

Profit of 23 million euros

The total number of monthly active users, which also includes the ad-based free version, grew to 356 million. This is 11 million more than in the last quarter of last year (plus 24 percent year-on-year), but only two million more than the lower end of the forecast. Internal expectations were also slightly higher.

Sales in turn grew by 16 percent year-on-year to 2.15 billion euros, which, however, means a decrease compared to the fourth quarter of 2020. Here the income added up to a total of 2.17 billion euros.

Spotify Technology SA

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To the detailed view

The decline is due to the fact that sales from the subscriber business (1.93 billion euros) increased by 14 percent compared to the previous year, but only recorded an increase of two percent compared to the previous quarter in 2020. At the same time, the advertising business, which is by far less significant in terms of size, amounted to 216 million euros, a significant decrease of 23 percent compared to the fourth quarter of last year. The year-on-year comparison is of course much better with an increase of 46 percent.

Sales forecast up, user forecast down

For the first quarter of the current year Spotify shows a profit of 23 million euros. In the same quarter of the previous year there were still a million. The service ended 2020 with a total loss of 581 million euros. This was due not least to acquisitions in the podcast area and expensive exclusive agreements with prominent podcast hosts. In March of this year, Betty Labs, the developer of the audio app Locker Room, was taken over.

With a view to the monthly active users, the service lowered the forecast and expects only 422 million instead of up to 427 million by the end of the year. At the same time, the sales forecast was raised slightly from up to 9.41 billion to now 9.51 billion. The targeted value for the subscriber base (up to 184 million) remained unchanged. After the figures were presented, the share lost almost 8 percent in the pre-market period.

So far, price increases in more than 30 markets

The price increases in 12 other countries, including the important markets of the United States and Great Britain, should meanwhile also be well received in the music industry, although the price of the individual subscription will not be increased in either country.