The ranks of Spotify’s premium subscribers soared by 20 percent year over year to 165 million in the second quarter, as the streaming company reported “significant advertising strength and subscriber outperformance.”
“Although we continue to face near-term uncertainty with respect to COVID-19, we remain confident in the underlying health of our user funnel, and our existing user retention activity remains consistent with historical trends,” management said in its quarterly earnings update.
Europe boasts 40 percent of Spotify’s premium subscribers, followed by 29 percent in North America, 20 percent in Latin America and 11 percent around the rest of the world.
Spotify’s average monthly Premium churn rate was down 23 basis points year over year for the second quarter and down modestly from the first quarter of 2021.
The company’s monthly active users grew 22 percent to 365 million in the three-month period that ended June 30, 2021, but that was still short of what company leaders had planned on, “mainly due to ongoing COVID-19 headwinds” and a temporary sign-up issue with a third-party platform that affected user intake.
About 34 percent of Spotify’s monthly active users come from Europe, with 24 percent in North America, 22 percent in Latin America and 20 percent across the rest of the world.
Spotify is pushing an expansion of its monetizable content. During the quarter, the company launched a paid podcast subscription platform in the U.S. and announced exclusive licensing deals with Call Her Daddy and Armchair Expert. The company also unveiled 100 international Originals and Exclusives podcasts.
The company introduced the Spotify Audience Network in the U.S. in April and expanded the service to Australia, Canada and the U.K. on July 1.
Spotify also soft-launched a redesigned version of Betty Lab’s Locker Room app, dubbed Spotify Greenroom, in mid-June, as part of the company’s move into live audio. Additionally, it announced a Creator Fund to reward users for content they create for the Spotify platform.
Spotify hosted a series of virtual events that included five prerecorded 40- to 75-minute livestreams in May and June, starting on May 27 with The Black Keys and ending June 24 with girl in red. Other performing artists included Rag’n’Bone Man, Bleachers and Leon Bridges.
Spotify is expecting to grow its monthly active users to 377-382 million by the end of Q3 and 400-407 million by the end of the year. Premium subscribers are expected to grow to 170-174 million in Q3 and 177-181 million by the end of 2021.