Strange: Spotify Posted Loss, Despite Adding 11 Million Subscribers

February 3, 2021 Topic: Technology Region: Americas Blog Brand: Techland Tags: TechnologySpotifyEntertainmentMusicSubscribers

Strange: Spotify Posted Loss, Despite Adding 11 Million Subscribers

Of the company’s 345 million monthly active users in the fourth quarter, 35 percent were in Europe, 24 percent in North America and 22 percent in Latin America, with the remaining 19 percent in the rest of the world. 

Spotify announced its fourth-quarter earnings Wednesday morning, and while the streaming audio company said that its premium subscriber count grew 24 percent year over year to 155 million, the company lost the equivalent of .79 cents a share in the last quarter of 2020, which was more than expected by analysts, per Investor Business Daily. 

The company, based in Stockholm, reports its annual results in Euros. 

Of the company’s 345 million monthly active users in the fourth quarter, 35 percent were in Europe, 24 percent in North America and 22 percent in Latin America, with the remaining 19 percent in the rest of the world. 

Spotify also touted the growth of the company’s podcast business, as the popular show The Joe Rogan Experience became exclusive to the platform in December.

“As of year-end, The Joe Rogan Experience was the #1 podcast on our platform in 17 markets,” the company said in the investor letter. “While it remains early days, we are very encouraged by the performance of this content since its arrival on our platform, as it has stimulated new user additions, activated first time podcast listeners, and driven favorable engagement trends, including vodcast consumption.” 

Spotify went on to issue a full-year 2021 guidance, with its monthly active user count seen rising to 407–427 million, with total premium subscribers rising to 172–184 million. 

“In 2020, we believe the pandemic had little impact on our subscriber growth and may have actually contributed positively to pulling forward new signups,” the letter said. “From a revenue standpoint, advertising was negatively affected in the back half of Q1 and persisted throughout the rest of the year. Looking ahead, we are optimistic about the underlying trends in the business into 2021 and beyond, however, we face increased forecasting uncertainty versus prior years due to the unknown duration of the pandemic and its ongoing effect on user, subscriber, and revenue growth.” 

Spotify also addressed the forecast on its earnings call, per a Motley Fool transcript. 

“Going into 2021, COVID still has the potential to be a headwind as it's difficult to fully gauge its impact,” CEO Daniel Ek said. “For Spotify, more time at home resulted in more people discovering streaming and turning to our platform, but it also created disruption in listening habits, consumption hours and the release of new music and podcasts. We believe it caused us to pull forward subscribers across the back half of 2020, which makes it really hard to predict if we'll drive the same subscriber growth in the year ahead. However, the trend lines are healthy and long-term the shift from linear to on-demand that the coronavirus pandemic accelerated will continue and remains a massive multi-billion user opportunity.

Stephen Silver, a technology writer for the National Interest, is a journalist, essayist and film critic, who is also a contributor to Philly Voice, Philadelphia Weekly, the Jewish Telegraphic Agency, Living Life Fearless, Backstage magazine, Broad Street Review and Splice Today. The co-founder of the Philadelphia Film Critics Circle, Stephen lives in suburban Philadelphia with his wife and two sons. Follow him on Twitter at @StephenSilver.

Image: Reuters