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Spotify has 500M users but 40% premium subscribers.

Image Credits: Sergi Alexander Stringer
Image Credits: Sergi Alexander Stringer

Spotify has 515 million monthly active users (MAUs), up 5% from last quarter and 22% from last year. With 210 million paid members and 317 million ad-supported users, Spotify has reached half a billion users for the first time.

This implies a 40% paid-to-free listener ratio that appears to be decreasing. Spotify had 46% of its users as premium customers in 2019, 45% in 2020, 44% in 2021, and 43% last year.

Due to the economic crisis, Spotify’s ad-supported user base outperforms its premium users. Unfortunately, this is not generating ad-supported money. Spotify’s advertising revenue gained 17% year-over-year but declined 27% from the previous quarter, resulting in a 4% drop in overall revenue.

“Macro-related variability in our advertising business” slowed revenue growth, the firm said. Nevertheless, Spotify emphasizes that its MAUs climbed by 26 million users vs. a projection of 15 million, making it the company’s single-biggest Q1 net growth and second-largest quarterly growth in history. If only it could get more premium subscribers.

The Q1 2023 shareholder report also highlights its operational deficits. However, the business expects its operational losses to continue to improve, with a prediction of €129 million for Q2 2023.

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