Spotify Now Has 170 Million Active Users

Posted on May 2, 2018 by Paul Thurrott in Music + Videos with 28 Comments

Spotify Now Has 170 Million Active Users

Spotify announced today that it has 170 million active users, 75 million of which are paying for its premium subscription service. The remaining 95 million users subscribe to the ad-supported version of the service.

“Every year we grow as a company, which allows us to make unprecedented changes to our platform, and in turn, engage more users in the magic of music streaming,” a Spotify announcement notes. “We’re excited to announce that this year is no different.”

The new milestone came as part of the firm’s quarterly earnings announcement, and the subscriber base was in line with expectations. Spotify reported revenues of $1.37 billion for the most recent quarter and narrowed its losses. The firm expects to lose about $397 million this year as it steps up its expansion and competitive efforts against Apple.

Speaking of which, Apple has 40 million paying Apple Music subscribers, up from 27 million a year earlier. Spotify had 50 million paid subscribers a year ago, so it is growing much faster than Apple.

According to Variety, Spotify plans to have 100 million paid subscribers by the end of 2018 and 200 million active users.


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Comments (29)

29 responses to “Spotify Now Has 170 Million Active Users”

  1. Daekar

    So they're the biggest fish in this expanding pond, but they're still losing money after all this time?

    You know, I remember the good old days, when businesses had to make money. That always seemed sensible to me.

    • mattbg

      In reply to Daekar:

      Agree - but everyone else in this game at a sImilar scale has a more diverse business to share infrastructure and overheads with. Apple’s growth and apparent profitability is impressive in this area.

    • Skolvikings

      In reply to Daekar:

      Remember Amazon lost money year after year for a long time too. Look how that turned out. I'm not saying Spotify is going to be as successful as Amazon, just pointing out that companies can lose money at first and still be on the path to success.

  2. rameshthanikodi

    Spotify is a great service and i'm happy to support them, I wish them continued success

  3. nbplopes

    It’s well deserved. They basically came up with the revolution in music streaming services after downloads. They deserve even more users.

  4. Lewk

    I have about 15 albums I listen to. They're all on my OneDrive that I listen to with Groove. This kind of service does not appeal to me at all.

  5. dallasnorth40

    I tried it. It just wasn't any better than Amazon Prime Music for me.

  6. mrdrwest

    More people are streaming because S P O T I F Y doesn't offer purchase options, which sucks IMO.

    I miss Groove's one-stop-shop service.

  7. dave0

    How are they losing money? That is crazy. Makes me wonder when profitability will arrive.

    • Daekar

      In reply to dave0:

      I don't know for sure, but I would guess that the licensing fees from the record labels are huge. If I controlled the labels, I would make sure that my content got delivered to consumers at the absolute highest, heartsblood-sucking price I could. They know darn well that if they ever allow a steaming service to become more than a subordinate appendage to the existing labels that they are completely screwed.

      Take note that there are really no scenarios in which the artists come out on top. It will be the labels or the streamers.

  8. RadarOReilly

    As a percentage, Spotify’s YoY growth rate of 50% isn't really “much greater” than Apple’s growth rate of 48%.

    • jrickel96

      In reply to RadarOReilly:

      Exactly. They are growing at roughly the same pace. Both are doing very well. Apple Music did launch later than the three big services: Apple Music, Spotify, and Google Play Music.

      Also telling that MS had such a chance here. Zune Music Pass launched around the same time as Spotify.

      • RM

        In reply to jrickel96:

        If both continue at the same 50% growth, Spotify will have a much larger customer base. If Apple has a chance long term it needs to get bigger growth percentages. For me, I buy a few CD's a year and save money. However, if I did decide to go with a streaming service, it would not be Apple. I don't trust them to keep the apps on Android and Windows up to date.

        • PincasX

          In reply to RM:

          I am genuinely curious, why doesn't Apple have a chance if it doesn't have larger growth percentages. It seems like both have a healthy user base that are growing at a solid pace. Apple may not be number one but I don't see how that equates to them not having a chance. Clearly there is space in the market for more than one company offering a streaming service.

          • jrickel96

            In reply to PincasX:

            I'm curious as well. Spotify continues to lose money while boasting big numbers, but they cannot make a profit at their current pricepoint.

            Apple doesn't NEED to make money on Apple Music, but they likely do because they can leverage other parts of the company for support - something Spotify cannot do.

            Spotify will fail over time or be bought by someone because they lack diversity in their business. They will never monetize it to the expectations of investors. It's really a matter of who will buy them. If they continue to post losses, the price will go down as investors jump ship.

            Apple has a massive cash pile and a large install base of iOS devices. They have a much more diverse business model. It also appears that they may jump over Spotify in the US subscription market.

            Spotify has had a rough day today after reporting earnings. It was at $170 yesterday and is now at around $160. I also pretty much guarantee we will be seeing pressure to raise prices and I doubt Apple or Google will.

            There's the rub. If they raised subscriptions by $5 a month on 75 million subscribers then they could have profited nearly a billion for the quarter. Even $2 will do that, but Apple and Google don't need to raise prices because they have diverse revenues and Spotify does not.

            So Spotify is pretty much toast. They need to raise prices to make money, but doing so will likely slow or eliminate growth and drive people to Google and Apple. Game. Set. Match.

            Only way for Spotify to survive is to be bought out by a big company like Microsoft of someone else, but MS would likely wait until the market cap plunges a bit. But at some point, some much larger company will have to pick them up in order for them to survive.

            • Andi

              In reply to jrickel96:

              Simple. Apple Music is a me too product that rides on the power of the defaults, just like Apple Maps. Its biggest draws were up to 6 family members in one subscription and worldwide roll-out where the monthly rate is either 8 dollars(Israel) or 5 euros(Eastern Europe) and Spotify is crucially absent. Apple makes more money from Spotifty's ios tax than Apple Music and Spotify itself.

              Spotify exists on all platforms, has a web interface, rules PS and Xbox and frankly is a better product.

              • jrickel96

                In reply to Andi:

                That doesnt address Spotify’s issue of losing money every quarter. Better products don't always win out.

                How can Spotify survive if it is not making any money?

                How can Spotify survive when it falls to #2 in the US, something that is expected to happen this summer? Apple Music has 5% growth in the US versus 2% for Spotify.

                You don’t answer my question about Spotify’s long term viability due to their lack of diverse revenue sources.

                • Andi

                  In reply to jrickel96:

                  Spotify is not making money now since it's continuously spending money. It's focusing on growth, improvement and paying as much as possible back to the rights holders. You don't get to no. 1 spot(quality and marketshare) by stagnating and incurring losses.

  9. Corbey

    So I wonder how they define "active user?" I have an active login, but I seldom use Spotify.

  10. innitrichie

    75 million paying customers and yet still unable to turn a profit. What a great business to be in.

  11. drjohnnyray

    I generally listen to SiriusXM in the car and use the android app everywhere else, pretty much all the music I need at this time.

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