Spotify hits 205 million premium subscribers, but financial losses swell

[Shawn Knight]

In brief: Spotify's premium subscriber base continues to swell but so do the financial losses. In its just-released fourth quarter 2022 report, Spotify said it now has 205 million premium (paying) subscribers. That's up from 180 million premium subs in the year-ago quarter – a 14 percent increase – and 195 million in the third quarter.

Monthly active users (which combine both premium and ad supported users) reached 489 million, a quarter over quarter increase of seven percent compared to last quarter's 456 million monthly active users. Spotify noted continued strength in multi-user premium plans.

Despite the gains, the financial losses continue to pile up. Spotify generated 3.17 billion euros ($3.44 billion) in revenue in the fourth quarter but posted a net loss of 270 million euros ($293 million). For comparison, the company's net loss was just 34 million euros ($37 million) in the fourth quarter of 2021.

Spotify cited increased personnel costs due to headcount growth and higher advertising costs for the losses. The impact of recent acquisitions such as Heardle, Chartable and Podsights also factored into the equation.

Earlier this month, Spotify CEO Daniel Ek confirmed the company would be reducing its headcount by about six percent or roughly 600 employees. Like other tech leaders, Spotify expanded its workforce too quickly during the pandemic. Ek took full responsibility for the misstep, noting that he was too ambitious in investing ahead of revenue growth.

Spotify's impressive user gains seemingly outweighed the mounting losses, at least in the eyes of investors. Shares in Spotify are up over 10 percent on the news, currently trading at $110.15 as of this writing. That is far from Spotify's all-time high of nearly $365 per share in February 2021 but is a step back in the right direction.

Looking to Q1 2023, Spotify is expecting to reach 207 million premium subscribers, 500 million total monthly active users and revenue of 3.1 billion euros with an operating loss of 194 million euros.

Image credit: Suvan Chowdhury, Victoria Akvarel

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https://www.techspot.com/news/97444-spotify-hits-205-million-premium-subscribers-but-financial.html

 

[alexnode]

I just hope that at a certain point if the streaming services survive the forces at be, that there will be transparency on how the profits are shared, with record labels, big stars and the smaller musicians that keep the platform alive.

 

[Feng Lengshun]

An important note is that the subscriber numbers came with HEAVY promotional push. I haven't paid for Premium for 3 months at the time, and they offered me a price of around 60k IDR for three months (~4 USD, just a bit above the IDR 50k/mo). Also, a friend who is a more recent unsub got a 50k IDR for two months I think, so overall the less often you sub, the more desperate they get.

I have no intention of extending my Premium, since I have found SpotX (Windows), spotify-adblocker (Linux), and xManager (Android) to get adblock, non-shuffle play, and unlimited skip. I only bought it because it's cheap and more convenient, but using those things aren't that inconvenient especially since I no longer need Download due to WiFi availability.

In the time I have with Premium, I'm also planning to look into permanent migration options. Most likely, I'll just use Spytify to get all of my library, and then do a self-hosted a music storage/sync with SyncThing/Resilio.

 

[Xausejo]

Maybe because of the ads payment and storage services