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Spotify reaches 144 million paid subscribers amid COVID-19 pandemic

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Spotify logo displayed on a phone screen and headphones are seen in this illustration photo taken in Poland on October 18, 2020.   (Photo Illustration by Jakub Porzycki/NurPhoto via Getty Images)
The number of Spotify users has risen to 144 million. Photo: Jakub Porzycki/NurPhoto via Getty Images

Spotify (SPOT) paid subscribers rose by 27% to 144 million in the third quarter of 2020, according to data research by Comprar Acciones.

The music streaming service’s monthly active users also soared by 29% year-over-year (YoY) to 320 million.

The number of Spotify users has risen to 144 million from only 18 million in Q1 in 2015. It doubled to 36 million by Q2 in 2016 and again to 71 million in Q4 in 2017.

Spotify’s subscription revenue rose by 15% YoY to €1.79bn (£1.59bn, $2.13bn) in Q3 this year. Overall revenue increased by 14% YoY to €1.98bn. Ad revenue grew by 9% YoY and 41% quarter-over-quarter (QoQ) to €185m.

However, Spotify made a loss of €101m in the third quarter, down from a €241m profit in the same period a year ago. The loss was due to Spotify offering discounted plans to attract new customers and grow its user base. Revenue per user fell by 10% YoY during the quarter to €4.19.

Spotify premium subscribers
Chart: Comprar Acciones

The rise in paid subscribers is partly due to Spotify’s launch in Russia and 12 other markets across Europe in July 2020. Russia was the company’s most successful launch yet, according to Comprar Acciones’ report.

Coronavirus lockdowns across the world have also had an impact, with more people staying at home leading to an increase in subscriptions.

A 12% increase in new music releases in the second quarter of the year also helped subscriptions to grow, with Taylor Swift and Korean boy band BTS among the top performers on Spotify

Spotify is the market leader in music streaming, holding a 35% share. Apple Music (AAPL) came in second place with 19%, while Amazon Music (AMZN) was third with 15%. Together, the three dominated 67% of the market in 2019.

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Streaming music sales made up 56% of all sales in the global music industry in 2019, according to a report by Billboard. Streaming revenue rose by 23% YoY to $11.4bn (£8.5bn) while subscription revenue grew by 24% and accounted for 40% of label income.

The number of global subscribers to music streaming services grew by 30% to 400 million in the first quarter of 2020, according to research by MIDiA. Spotify had a 32% share followed by Apple Music with 18%, and Amazon Music with 14%.

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