Home » 29 October 2019 » Spotify outperforms itself in Q3/2019: Podcasts & innovative subscription plans listed as catalysts

Spotify outperforms itself in Q3/2019: Podcasts & innovative subscription plans listed as catalysts

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Spotify has announced that it ended its Q3/2019 with 113 million subscribers and 248 million total Monthly Active Users (MAUs) worldwide.

The subscriber number was up by 5 million on the 108 million subs base the platform hit at the end of June.
The subscriber numbers were confirmed in a Q3 financial update, in which SPOT confirmed that its premium subs count was up 31% year on year (on the same three months, to end of September, in 2018). The 113 million is comfortably within the firm’s guidance range of 110-114 million for Q3.

Spotify said its monthly active user base has increased 30% y/y to 248 million. The company credited the developing regions for growth.

“Southeast Asia remains our fastest-growing region (excluding India). Of note, India outperformed our forecast by 30% this quarter. This momentum was driven by a number of factors including the launch of our first broad-based marketing campaign, “Sunte Ja” (“Listen On”), since launch in February,” said the company in its report.

The company said average revenue per user from its premium business in Q3 was down 1% Y/Y while the revenue growth in ad-supported business saw a 20% Y/Y growth, below its expectations.

Reasons why Spotify outperformed

Podcasts, which has been one of the key focus areas for Spotify this year, also witnessed growing adoption among its subscribers. About 14% of Spotify’s monthly active users currently listen to podcasts with a 39% increase in podcast hours streamed this quarter, albeit off a small base.

The United States accounts for the majority of the podcast listening right now, but the growth is faster in several European countries, the company said in the shareholder letter. During the quarter, Spotify launched 22 original or exclusive titles and now claims to offer more than 500,000 podcast titles on its platform.

Earlier this year, Spotify introduced a new bundle plan in a handful of Latin American and European countries called Duo, which is a discounted subscription for two people.

Spotify has also announced the availability of its highly popular Premium Family plan in India, giving users more ways to enjoy and share audio content as a family.

Spotify said that they continue to feel very good about their competitive position in the market. Relative to Apple, the publicly available data shows that they are adding roughly twice as many subscribers per month as Apple is. Additionally, Spotify believes that their monthly engagement is roughly 2x as high and their churn is at half the rate. Elsewhere, their estimates imply that they will continue to add more users on an absolute basis than Amazon. Their data also suggests that Amazon’s user base skews significantly more to ‘Ad-Supported’ than ‘Premium’, and that average engagement on their platform is approximately 3x.

Spotify is expecting 255-270 million total MAUs and 120-125 total premium subscribers by Q4/2019.

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Abhishek Singh

Author: Abhishek Singh

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