Spotify subscriber growth continues as 2023 price hike looms
Spotify finished Q3 with 456 million monthly active usersBy Shawn Knight
In a nutshell: Spotify in its third quarter report finished the three-month period ending September 30, 2022, with 456 million total monthly active users, a 20 percent increase year over year and five percent more than the previous quarter. Broken down further, that works out to 195 million premium (paying) subscribers and 273 million ad-supported users, representing increases of four percent and seven percent quarter over quarter, respectively.
Spotify reported an operating loss of €228 million for the quarter on revenue of €3.04 billion, the latter of which represented an increase of 21 percent year over year.
CFO Paul Vogel said 2022 has been a year of investment. It's too early to provide guidance with respect to 2023, but the executive said they do expect profitability rates to improve next year relative to 2022.
Speaking of paying subscribers, CEO Daniel Ek said a Spotify price hike would be coming sometime in 2023. Premium subscribers in the US currently pay $9.99 per month for an individual plan, $12.99 for two accounts or $15.99 for a family plan that affords six accounts. Individual plans for students are priced at $4.99 per month.
A price increase for Spotify seems par for the course, especially at this stage of the game.
Apple earlier this week announced price hikes for multiple subscription services including Apple Music and Apple TV+. Last week, YouTube increased the price of its Premium family play by $5 per month and invited customers to share their feedback on the rate change. Disney over the summer announced it will be increasing prices starting in December, and Netflix hiked prices across the board for US subscribers at the beginning of the year.
Spotify last month launched an audiobook division with 300,000 titles, no doubt going after rivals like Amazon and its Audible service. Notably, the audiobook push is a standalone division with à la carte pricing meaning there is no discount for paying Spotify Premium subscribers.
Spotify's stock is down more than 12.5 percent and is trading at $84.98 as of this writing.
Image credit: dlxmedia, Alexander Shatov