Reports Music

Spotify Q1 2020 Earnings First Signs of Pre-Recession Weakness

Report by Mark Mulligan
Cover image for Spotify Q1 2020 Earnings
Synopsis PDF Excel PowerPoint

The 20,000 Foot View: 2020 was a solid quarter for Spotify but showed early signs of XXX impact across premium and especially ad supported. With a global recession looming, these may be the first signs of vulnerability in a challenged economic climate.

Key Insights

  • Spotify ended XXX 2020 with XXX million subscribers, up XXX on XXX 2019
  • Premium ARPU fell to XXX – the lowest figure since Spotify went public, XXX below the full-year (FY) 2015 high of XXX ARPU has thus reduced by more than a third XXX and will be pushed down further by new products, offers and emerging market growth
  • Spotify’s MAU-to-subscriber rate fell XXX points from XXX in XXX 2019 to XXX in XXX 2020, and XXX in XXX 2019, due to faster free user growth
  • Spotify is sacrificing both ARPU and conversion rates in the pursuit of emerging market growth
  • Latin America and Rest of World were the workhorses of Spotify’s growth during XXX 2020, accounting for XXX of all new subscribers; one year previously the share was XXX revenue was up XXX year on year but was only up XXX on XXX 2019
  • Ad-supported revenue was up XXX on XXX 2019 but down XXX on XXX 2019 – in XXX 2019 the quarterly decrease was only XXX ad revenue will likely be negatively impacted by a softening ad market in the coming recession
  • Spotify has clear momentum in podcasts, passing Apple in XXX 2020 to become the most widely-used podcast platform, with XXX of podcast users using it

Companies and brands mentioned in this report: Spotify, Alphabet

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