Spotify Posts Second-Quarter Loss, Hits 83 Million Paid Subscribers
The music streaming service now has 180 million active monthly users as it looks to grow its advertising and video revenue.
Despite posting a widened operating loss, Spotify on Thursday said it added 8 million paid subscribers during its second quarter to get to 83 million premium users.
With 180 million ad-supported active monthly users in its stable, Spotify is now larger than rival Apple Music. The Swedish music streaming service said its uptick in paid subscribers came via its Family Plan program, which does better at reducing churn, or customer defections, than with individual users.
Spotify said growth among European subscribers, who account for 37 percent of its active monthly user base, against 31 percent in North America, slowed during the second quarter due to the introduction of new GDPR privacy rules in Europe. Latin America remained a growth market for the company though.
Continued subscriber growth, key to eventual profitability at Spotify, sent total revenue at the streamer up 26 percent to €1.27 billion ($1.49 billion) during the second quarter. That came as the Swedish streaming giant posted an operating loss of €90 million ($105.4 million), compared with an operating loss of €79 million ($92.5 million) in the second quarter of 2017.
Spotify said it was working to identify and remove "fake" users from its reported metrics and aims to grow its advertising and video revenues. "From a product perspective, video is our fastest growing source of revenue, while audio remains our largest source of revenue and continues to experience solid growth," the company said in its financial results release.
Veteran entertainment executive Dawn Ostroff recently joined Spotify as its new chief content officer to drive new content partnerships for the streamer across music, audio and video. The Stockholm, Sweden-based streaming service, which is run by founder and CEO Daniel Ek, recently went public on the New York Stock Exchange.