Popular music streaming service Spotify announced subscriber growth in the first quarter of 2021. The company also shared its expectations for the potential loss of revenue this year.
Spotify, one of the most used music streaming services in the world, was the center of attention last year, especially when the coronavirus outbreak began. The company achieved significant user growth in the first three quarters of 2021.
Spotify announced that 11 million users have joined the platform in the last three months, bringing the total number of users to 366 million. Spotify experienced a significant increase compared to the beginning of 2020 and fell short of the projected growth figures.
According to the company’s report, there has been a significant increase in the number of people paying for Premium plans. Nearly four million users also unsubscribed between January and March. There are 158 million paying customers on the platform and 208 million using the ad-containing version.
Spotify expects €150-250m loss
The company has set operating income at €14m and expects to lose between €150m and €250m in 2021. It is estimated that the company will compensate for this loss of revenue by exceeding the figure of 400 million users.
The report shows that the company has stabilized its loss ratios compared to the previous quarter. Among the reasons for this change in people’s behavior due to the outbreak and offers such as a family plan to prevent subscriptions from being canceled.
Spotify is also facing the prospect of being affected by the European Union’s antitrust charge against Apple over the cut in App Store fees. Because some developers, such as Spotify and Epic, claim that the firm mandates its payment system. However, the Swedish-based firm has not commented on criticism that it is not paying artists fairly. Last year, a group of musicians launched the Broken Recording campaign, saying Spotify was underpaid. Earlier this month, It was found that Apple Music paid artists one cent per listen and Spotify paid half a cent.
In addition to these allegations of revenue injustice, let’s also remember that CEO Daniel Ek has begun to look for a pulse to buy Arsenal from English Premier League football clubs, Stan Kroenke.