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SPOTIFY'S PREMIUM
SUBS NEAR 160M

Spotify’s premium subscriber count grew to 158m in the first quarter of 2021, a 21% spike over the pre-pandemic portion of 2020.

Subscriber growth of 4m was led by North America, which did well with trial runs becoming permanent, and Latin America, where family plans are the drivers. Among new markets, South Korea is the leader.

Total monthly average users grew 24% to 356m in the quarter, with the strongest markets being the U.S., Mexico, Russia and India. Global consumption hours continued to grow meaningfully in Q1 on a Y/Y basis. Per-user consumption grew in developed regions like North America and Europe, while developing regions showed signs of improvement but remained below pre-COVID levels.

Total revenue of €2.15b in Q1 was 16% above 2020 on a constant currency basis, attributable largely to subscriber “outperformance.” Premium revenue was up 14% to €1.93b; ad-supported revenue was up 46% to €216m.

Gross margin, as anticipated, finished at 25.5% in Q1, even with the previous year.

The continued drive into podcasts yielded strong results; Spotify now has 2.6m podcasts, a 400k increase between 1/1 and 3/31, and podcast consumption hours were up significantly from the previous three months.

Looking down the road, Spotify CEO Daniel Ek told analysts about the addition of live audio elements to the service and its approach to in-vehicle entertainment.

Ek expects live audio to develop as a feature much like the “stories” concept that has emerged elsewhere. “Clearly it’s something you should expect every major platform [to adapt],” he said in a conference call Wednesday morning. The winners will be the companies that establish the “best creator-to-fan affinity.”

Without offering more details about Spotify’s “car thing,” Ek said the project is an “attempt to speed up” the transformation from car radios to on-demand audio. “Early results are very encouraging,” he said, noting that the platform will use feedback from users to determine how to build the product and roll it out. Ek said it will likely have a consumer price point and not be a free product.

The company now expects increases in total revenue and gross margin for the year along with decreased operating losses. By the end of 2021, Spotify expects to have 172m-184m premium subscribers, 402m-422m total MAUs and revenue of €9.11b-€9.51b.

TAGS: Spotify | Q1 | podcasts
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