Reports Music

Spotify Q1 2019 Earnings

Report by Mark Mulligan
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The 20,000 Foot View:             2019 was a quarter of milestones for Spotify, hitting            million subscribers, launching in India and becoming a podcast company. However, it was also a quarter in which a number of metrics started to soften. With the exception of ad revenue, none of these subtle shifts are enough on their own to provoke any serious concern. Collectively though, and contextualised against next quarter’s performance, these metrics may just prove to be early indicators of a potential change of pace.

Key Findings
  • Spotify hit            subscribers in            2019, a rise            four million on            2018 and                       million from one year earlier
  • Ad-supported monthly            users (MAUs) were up seven            from            but this was fewer            the            million added one year           
  • Spotify’s paid            rate dropped half a point                       however, this was up six            from            2018
  • Rest of            ad-supported MAUs grew by around            million in            2019 quarter-on-quarter, while            grew by just            million, diluting            paid user ratio
  • Spotify’s long-term            average revenue per user (ARPU)            slowed in            2019 with ARPU                       the lowest rate ever, down            one cent from            2018
  • Premium saw            margin up to            and revenue                       year-on-year (YoY) to            billion, but            revenue was up just            YoY            gross margin dropped to           
  • Spotify’s podcast            are yet to have any            impact on revenue but will            a growing priority for Spotify,            for its creator strategy
  • Rightsholders are            progressively less tolerant of family            because of their dilutive impact            ARPU
  • Spotify will            podcasts to start delivering revenue            offset the impact  lower ARPU            emerging markets will have on            revenue growth
  • MIDiA forecasts            to reach            million subscribers by            end of 2019 with            million            those in Europe,            million in            America,            million in Latin America                       million in Rest of World

Companies and brands mentioned in this report: Anchor, Gimlet, Spotify, Warner Music

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