Yahoo Movies Spotify Hits 239M Paying Subs in First Quarter
Audio streaming giant Spotify has reached 239 million paying premium subscribers for the first quarter of 2024, up from 236 million at the fourth quarter of 2023, which met analyst expectations.
Stockholm-headquartered Spotify, led by CEO Daniel Ek, also reported that it hit 615 million monthly active users (MAUs) as of the end of the first quarter to March 31, 2024, up 19 percent from 602 million at the end of the fourth quarter of 2023. That missed on a Wall Street forecast for 617.9 million MAUs for Q1.
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In the earnings call, CEO Daniel EK attributed the MAU slowdown to the comparison to record numbers achieved during 2023, company layoffs in December, which disrupted operations “more than anticipated,” and lower marketing spend, which the company plans to increase going into the second quarter.
In the second quarter, the company is forecasting 631 million monthly active users, an increase of 16 million from the first quarter and 245 million premium subscribers, an increase of six million.
Asked about the possibility of further price increases in the U.S., Ek did not comment directly on it, but said the company would begin offering an audiobook-only prie tier as well as a music-only tier.
“All of this is in line to just offer as much flexibility to consumers as possible for them to pick whatever plan they feel offers the best value to price ratio for them,” Ek said.
First quarter quarter revenue rose 20 percent to €3.6 billion ($3.84 billion). During the latest quarter, Spotify swung to pre-tax income of €174 million ($185.4 million), against a pre-tax loss of €70 million (US$74.5 million) in the first quarter of 2023.
“The business performed well in Q1, led by healthy subscriber gains, improved monetization and record strength in profitability,” the company said in commentary that accompanied its first quarter earnings.
Advertising revenue rose 18 percent to €389 million (US$414.5 million), and Spotify reported podcasting ad revenue grew faster than music ad revenue. The company reiterated its plans to for the podcasting segment to reach profitability this year.
First quarter revenue from premium subscribers rose 20 percent to €3.24 billion (US$3.45 billion), driven by subscriber gains and price increases.
“We’ve talked about 2024 as the year of monetization and we’re delivering on that ambition. Now as we’ve shifted to focus on strong revenue growth and margin expansion, we see a clear opportunity to ensure we are also continuing to grow the top of our funnel. I feel good about the changes we are implementing and remain very confident in our ability to reach the ambitious plans we’ve outlined,” Ek said in a statement.
As TikTok faces regulatory challenges in the U.S., Ek said Spotify will add more music video clips to the platform in 2024. The company will also add more AI products to the music side.
“We are focused on winning discovery,” Ek said.
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