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

Companies and brands mentioned in this report: Spotify