Spotify by the Numbers Trials, Churn and Margin

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The 20,000 Foot View: This report presents analysis of Spotify’s key performance metrics as presented in the filing in advance of its direct listing. The report focuses on business performance metrics, such as user acquisition and retention, user engagement and user spend. In addition to the headline numbers, this report includes detailed supplementary data analysis to create further implied datasets that were not reported in the filing.
Key Findings
- Global subscribers grew by million in quarters without ‘super trials’ and million in the quarters with them
- Engagement is growing; subscribers played an average of streams a month in 2017, compared to in 2015
- Inactive subscribers grew from one million in 2016 to four million in 2017
- On an annual basis churn was in 2017, down from in 2016
- Lost subscribers totalled million in 2017, up from million one year earlier
- Spotify is growing subscribers faster than free users in all regions except rest of world
- Spotify had to gain one extra subscriber for every additional two subscribers it held onto in 2016. In 2017 this rose slightly to
- European and North American subscribers each grew by three million and two million respectively with trials
- Super trials enable Spotify to grow nine months faster than it would without them
- Quarterly churn increased by an average of in super trial quarters
- Gross profit per subscriber was higher in the quarters with rights payments for super trials
- It took an average of months to recoup acquisition costs per subscriber in 2016, rising to months in 2017
- Spotify should reach million subscribers by 2018, by comparison, Apple Music is likely to have hit around million over the same period
Companies and brands mentioned in this report: Amazon, Apple, Apple Music, Deezer, Spotify