San Francisco: The world-renowned music streaming platform, Spotify, has experienced a remarkable surge in its paid subscriber base during the third quarter of the year (Q3). Paid subscriptions reached an impressive 226 million, a 16% year-on-year increase. What’s more, Spotify surpassed expectations by adding 6 million paid users during this period, 2 million more than originally projected.
An Impressive Uptick in Monthly Active Users
In addition to the surge in paid subscribers, Spotify’s monthly active users (MAUs) also experienced a significant uptick. MAUs increased by a substantial 26%, reaching an impressive total of 574 million. This surge marks one of Spotify’s best Q3 net addition performances to date.
Spotify CEO Daniel Ek’s Take on the Success
Daniel Ek, the CEO of Spotify, expressed his satisfaction with the platform’s stellar performance during the quarter. He emphasized the continuous improvement seen across various aspects of the business and extended his gratitude to the dedicated Spotify teams worldwide for their role in achieving this success.
The Return to Profitability
One of the most significant achievements for Spotify in this quarter was its return to profitability. The company reported a profit of 65 million euros, which equates to approximately $69 million. This financial milestone indicates a strong financial performance for the platform.
Positive Operating Income and Revenue Growth
Operating income for the quarter stood at 32 million euros, approximately $34 million. Spotify’s total revenue saw a robust 11% increase, reaching a total of 3.4 billion euros. The company’s performance exceeded guidance in key indicators, showcasing the strength of its business during the quarter.
Spotify’s Pricing Strategy Shift
In a strategic move, Spotify announced in July that it would increase premium subscription prices across several markets worldwide. In the US, for example, the Premium Individual plan experienced a price hike, rising from $9.99 to $10.99. The Premium Duo plan was adjusted to $14.99 from its previous $12.99. The Premium Family plan, catering to multiple users, now costs $16.99, up from $15.99. Students subscribing to Spotify’s services saw their monthly fee increase to $5.99, previously priced at $4.99.
Lyrics Feature as a Premium-Only Incentive
To further incentivize users to sign up for their premium services, Spotify has been testing a new feature. The platform is considering making in-app lyrics an exclusive premium-only feature. This move aims to appeal to users who value additional content and features in their subscription packages.
The surge in paid subscribers, the return to profitability, and the successful revenue growth make Q3 a monumental quarter for Spotify. As the music streaming industry continues to evolve, Spotify’s strong performance showcases the platform’s ability to adapt and thrive in a competitive market.
