Spotify adds subscribers with podcasts push

Spotify nears 350 million users driven by India

Spotify revealed in a statement that it expects a revenue of $10.83 billion (9.01 billion euros) to $11.31 billion (9.41 billion euros) for the year 2021.

Spotify reported sales of almost €7.9 billion, up by 16.5% year-on-year and in line with estimates from analysts polled by Bloomberg.

In Q4, premium (paid) subscriptions grew 24% YoY to 155 Mn, but average revenue per user for the subscription business fell 8% YoY to 4.26 euros. Revenues were up 17% year-over-year and beat analyst estimates, while gross margins came in at 26.5% vs. the 25.6% consensus estimate.

Spotify added a record 74 million users in all in 2020 compared to 64 million users in 2019, taking its total to 345 million monthly active users.

For Q1 2021, the company is projecting total users of 354 million-364 million and paid subscribers of 155 million-158 million.

Still, more important to investors is what those customers are paying. Earnings from premium subscribers grew 15% Y-o-Y to 1.8 Bn Euros, while earnings from ad supported users grew 29% YoY to 281 Mn Euros during the quarter. Record labels have long complained that Spotify is practically giving away the service in many places. The company just raised prices in Canada, however, and introduced its service in South Korea without a free tier.

Thus, the company has effectively bounced back after its performance and revenue had taken a dip in the early months of the pandemic.


"We have seen per user consumption in large regions such as Europe and North America return to growth, while Latin America and the rest of the world show signs of improvement but remain slightly below pre-Covid levels", the company said. Sales had slipped by 21 per cent in the second quarter of 2020, and grew in just single digits in the third quarter. "We continue to see strong growth in podcast consumption, with consumption hours in Q4 almost doubling since Q4 2019".

Spotify's slate of more than 2.2 million podcast titles, up from 700,000 a year earlier, includes "The Michelle Obama Podcast", "Mama Knows Best" by influencer Addison Rae and one by Prince Harry and his wife Meghan.

In its full-year 2021 guidance, Spotify said it expected total users across ad-supported and premium accounts of 407 million to 427 million.

In 2021, the company expects an operating loss of between €200 and €300 million, close to its equivalent loss past year of €293 million.

The company's substantial investments in podcasts have seen a spike in paid users but it presented a reserved forecast for this year.

Spotify has been listed on the New York Stock Exchange (NYSE) since April 2018.

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