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In brief: Spotify just turned in its strongest first quarter ever since going public back in 2018. The streaming giant’s overall user base grew 22 percent year-over-year to 515 million listeners. Of them, 210 million – or about 41 percent – are premium (paying) subscribers, an increase of 15 percent compared to the same period last year.
Total revenue for the quarter hit €3.04 billion ($3.3 billion), an increase of 14 percent YoY but down four percent quarter over quarter. Spotify reported a net loss of €225 million, or €1.16 per share, for the quarter compared to a profit of €131 million / €0.68 per share a year earlier.
The first four months of 2023 have been busy for the Swedish audio streamer. In January, the company announced it would be saying goodbye to approximately six percent of its workforce, or around 600 employees. The layoffs, which didn’t target any specific department, were necessitated by overspending during the pandemic. The company also used that opportunity to shuffle leadership at the top of the ladder, and one longtime executive stepped down.
A month later, Spotify jumped on the artificial intelligence bandwagon with a new AI-powered DJ feature designed to improve recommendations. And last month, Spotify finalized a deal to distribute NRP podcasts on its platform.
The company’s long-awaited HiFi service has reportedly been ready and waiting to launch for over a year, but Spotify was forced to pause the planned rollout when the competition started offering lossless to its subscribers at no extra cost. It seems clear that Spotify wants to make HiFi a paid perk but they haven’t quite figured out the best approach given the current state of the industry and the competition.
Looking ahead to the second quarter, Spotify said it expects to finish the three-month period ending June 30 with 530 million total monthly active users, of which 217 million are premium subscribers. Revenue, meanwhile, should be closer to €3.2 billion.
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