Despite a crowded market, Spotify continues to see a steady trend in subscriber growth.
Earlier today, Spotify announced its latest quarterly earnings, this one for the fourth quarter of 2019, and revealed that not only is the company still seeing a lot of people subscribe to its streaming music service, but its investment in podcasts was a solid move because growth in that department has skyrocketed.
But first, the music. Spotify today revealed that it has reached 124 million paid subscribers. That’s the folks who are forking over money every month for the company’s premium subscription offering — not the free tier that Spotify also has. But when you do include the free tier, then Spotify’s numbers jump up to a staggering 271 million monthly active users.
We ended the year with 124 million Premium Subscribers globally, up 29% Y/Y and ahead of forecast. This was the highest net add quarter we’ve ever experienced, and the fastest we’ve ever added 10 million subscribers. During Q4 we expanded our ‘3 months on us’ offer to new Family Plan subscribers, in addition to previous offers for Individual and Student.
Apple isn’t in the habit of announcing subscriber numbers on a regular basis, so all we really have to go on here is news from back in June of last year, when it was revealed that Apple Music had surpassed 60 million paid subscribers. Apple Music doesn’t offer a free tier, either. So while it’s likely that Apple Music has also seen continued growth, it’s a pretty safe bet that Spotify still holds a healthy lead in this regard.
Now, to podcasts. According to Spotify, podcast listening on its platform has increased 200 percent year-over-year, and it now offers over 700,000 podcasts for listeners. What’s more, the company says that over 16% of its users are listening to podcasts regularly, too. And the company believes that podcasts are going to draw in even more paying subscribers in the future.
We have a growing body of evidence showing that there are significant benefits to engagement, retention, and conversion of users from Ad-Supported to Premium stemming from consumption of Podcast content. We have seen benefits to retention on the order of several hundred basis points, which is a material change on a retention curve, for users that engage with spoken word content relative to those that haven’t, and early data indicates that these users are more likely to convert to Premium over time.
How many? Well, Spotify’s announcement says that it expects to have around 150 million paid subscribers by the end of 2020, and over 300 million mostly active users by the same time.
Solid numbers for Spotify, that’s for sure. Are you subscribing to this service, or do you prefer another music streaming option out there?