Spotify has announced that over 100 million users now subscribe for the premium tier of the music streaming service. The news comes with the company's quarterly earnings report, which also confirms that the company is still struggling to turn a profit even as it expands its userbase.
Soptify has a total number of 217 million monthly active users worldwide, 100 million of which are on a premium plan. That's a decent chunk of paying customers, putting Spotify well ahead of Apple Music, which reportedly had 50 million paid users worldwide at the beginning of April. In the US, however, Apple is still ahead with 28 million subscribers compared to Spotify's 26 million. Spotify on the other hand, continues to grow around the world: the service recently brought two million Indian users on board after launching in the country in February.
By the end of this quarter, Spotify says it expects to rack up 222 to 228 million users, and get that paid subscriber count up to 110 million. Despite this growth in subscribers though, the company also reported a financial loss of €142 million ($158.3 million) for Q1 2019, compared with a loss of €169 million for the same period last year. These are big numbers, but it's also par for the course with these services. Remember, Amazon ran at a loss for years, and so did Twitter. But if your investors have deep enough pockets, you can still take over the market while losing money.
Spotify's future: voice speakers and podcasts
Spotify's report identifies voice speakers as a critical area for its growth, and if you have one, it's easy to see why. Spotify wants to be the music provider for smart speakers and even gave away free Google Home Mini units to family subscriber accounts in the US last year and did the same in the UK and France this March.
As we previously reported, Spotify's ambition is to be the go-to service for audio content and that means moving beyond just music (and into areas easier to dominate than the entrenched music industry). Podcasts are the name of the game. After acquiring podcast companies Gimlet Media, Anchor, and Parcast, Spotify intends to develop an better advertising model for podcasts, with improved "targeting, measurement, and reporting capabilities." So expect the ads in podcasts to become targeted to whatever data Spotify has on you.
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Spotify clearly doesn't expect to become profitable anytime soon, but is expanding into areas where it can entrench itself in tech ecosystems and undercut the competition. Podcasts are cheap to make, have dedicated audiences, and more importantly, don't have the record companies involved to demand their dues. With special offers tied to Google, Samsung and Hulu's products, the average user will see more and more prompts to sign up to Spotify to integrate it with a product or service they already use, kind of like Facebook's MO.
Do you use Spotify? What do you think of the company's strategy?