Spotify has announced its Q3 results, boasting “high level“ performance including strong MAU and subscriber growth.
The media platform has been driven by the lockdowns, with consumption up and ad-spend recovering to higher than 2019 levels.
The Drum highlights some of the key points from the earnings call.
Premium subscribers grew 27% in the first half of 2020 and 29% during 2019. Year-on-year growth of premium subscribers grew 27% to 144 million.
A launch in new market Russia helped drive the growth, while a Google Nest Mini promotion in the UK and Canada also helped.
Premium churn rate for the quarter fell below 4% for the first time.
Analysts expected Spotify to hit 316m monthly active users. Total MAUs grew 29% year-on-year to 320 million, while Latin America and the Rest of World sectors continued to see the fastest growth.
Netflix just had a slowdown, blaming an early pandemic surge which saw it acquirineg customers en-masse for thinning the pipeline. Taking a leaf out of Spotify‘s book, Netflix introduced a limited free tier to help attract a new line of subs. Similarly, Spotify‘s earnings read: “We believe summer demand may have been pulled forward into the March and April lockdown periods.“
It saw a 13% increase in new music releases compared with Q2, led by Taylor Swift’s well-received folklore album.
It has been bundling resource into its podcasts business, exhibiting impressive growth on the platform.
Acquiring Gimlet, Anchor, and Parcast has helped to build out its first-party production.
In May, it banked exclusive rights to Joe Rogan’s podcast. Prior to the deal, The Joe Rogan Experience was downloaded 190m times a week. It was the most popular podcast on Apple platforms last year, and his vodcasts on YouTube have garnered over 2 billion views to date. But Spotify now finds itself having to account for some of his regrettable output.
The recently released Michelle Obama Podcast has been slightly less controversial. It also has a DC Comics partnership, and the first audio show will be Batman Unburied.
To drive discovery it revamped its podcast charts experience to show users in 26 markets what podcasts are trending. It also announced a video podcast feature.
Total revenue: €200-€220bn.
Premium revenue grew 15% year-on-year to €1,790m.
Ad-supported revenue rebounded after the pandemic ad slump and grew 9% year-on-year.
It said the rebound was led by the podcast and ad studio channels, both exhibiting double-digit growth.
Gross margin finished at 24.8%.
Stephen Smyk, senior vice president of podcast and influencer marketing at Veritone One, urges attention to be paid to the podcasting business.
He said it is building a long-term solution for podcasting, and will continue to acquire celebrity shows, and genre-specific shows, to build its library.
He said: “Don’t be surprised when Spotify builds content-specific channels akin to terrestrial radio stations or satellite radio services that they stream directly to millions of consumers daily. Their vision for on-demand radio is grand and signifies a notable change to the broadcast consumption model we are used to.“
The platform shared how people behave and feel through their consumption of digital audio.