Reports Music

Spotify Q4 2020 earnings ARPU pays the price for growth

Report by Mark Mulligan
Cover image for Spotify Q4 2020 earnings
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The 20,000 Foot View: In 2020 Spotify accelerated the growth of its total user base, with emerging markets playing a key role. However, revenue increases became decoupled from user growth across all categories, resulting in ARPU deflation. 

Key Insights

  • Spotify finished 2020 with        million subscribers, up        on 2019. For the fifth successive year Spotify added more subscribers than during the previous year
  • Subscriber growth is becoming uncoupled from premium revenue, which grew by a lower               million)
  • End of year average monthly premium ARPU was down significantly in 2020 to         from        in 2019
  • Although consumption hours were up, they did not grow as strongly as users, resulting in a        decline in average hours per user
  • Spotify finished 2020 with        million ad-supported monthly active users (MAUs), adding        million compared to        million in 2019
  • Ad revenue grew by just        in 2020, reaching        million. For the first time, ad revenue fell to below        of total revenue, hitting        in 2020
  • Monthly ad-supported ARPU fell again in 2020, from        in 2019 to        ‘rest of world’ subscriber-to-MAU ratio fell from        in 2019 to        in 2020, down from a high of        in 2018. 
  • Revenue is slowing: 2020 was the first year since 2017 that the premium revenue growth was less than the prior year (up        billion compared to        billion in 2019)
  • Spotify finished 2020 with        million podcast listeners, representing        of all MAUs, but growth is faster than revenue, meaning podcast’s annual ARPU fell        in 2020

Companies and brands mentioned in this report: Spotify

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