Podcasts and New Markets Help Spotify Scoop Up Subscribers
Spotify’s Subscriber Spike
Spotify (SPOT) shared better-than-expected subscription growth data for the fourth quarter of 2020. As the pandemic wears on, an increasing amount of people are turning to audio content for entertainment while they are stuck at home. Spotify had 345 million monthly active users at the end of Q4—a 27% jump compared to the same period a year ago. Paying subscribers hit 155 million for a 24% increase from last year.
Some of this user growth was a result of Spotify offering discounted subscription plans, especially in newer markets like Russia and India. Average revenue per listener fell by 8% during last year’s fourth quarter because of this strategy.
The Podcast Push
Spotify’s user growth can also be attributed to its expanding podcast library. Spotify currently offers 2.2 million podcasts with everything from small, niche podcasts to big titles like “The Joe Rogan Experience” and “The Michelle Obama Podcast.” Though podcast listenership dipped at the beginning of the pandemic as fewer people were commuting, it has come roaring back. The amount of hours people spent listening to podcasts on Spotify nearly doubled between the last quarter of 2019 and the last quarter of 2020.
Spotify has been a leader in the podcast space recently, but it could face more intense competition in the coming months as larger companies ramp up their podcast offerings. Amazon (AMZN) recently purchased the podcast company Wondery, and Apple (AAPL) said it is looking into starting a podcast subscription service.
Uncertainty in 2021
Spotify said it will continue to prioritize growth over profits in the coming quarters. The streaming giant has periodically seen quarterly profits, but it reported a loss of $335 million in 2020 overall.
After a year full of unexpected twists and turns, Spotify’s leadership is now wondering what lies ahead in 2021. As Spotify CEO Daniel Ek put it, “Assuming COVID is beyond us in the latter part of 2021, what’s going to happen to consumption then? Are people going to travel? What habits are changing? That’s a massive amount of uncertainty.”
P.S. Speaking of podcasts, be sure to check out the SoFi Daily podcast on our app, on Spotify, or wherever you get your podcasts.
Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Advisor
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.