Spotify Nears Profitability With 87M Paid Subscribers
Music streaming giant, Spotify, has edged closer to profitability, posting a Q3 operating loss of €6 million (US$6.8 million), significantly down from €73 million ($83.3 million) last year.
It comes as Spotify continues to achieve subscriber growth – notching 87 million paid premium customers, up 3% from 83 million in Q2.
It’s a notable 40% jump versus 62 million achieved in Q2Y17.
The streaming service now boasts around 191 million total active monthly customers (up 28% YoY), but faces mounting competition from Apple Music.
Ad-supported monthly active users has notched 109 million – up 8% from Q2, 20% higher than 91 million in Q2Y17.
Latest industry numbers claim Apple Music boasts around 50 million subscribers, and is tipped to grow [in the US] around 5% per month.
Currently, Europe represents 36% of Spotify’s user base, with North America constituting 31%.
For the quarter, Spotify announced revenues of €1.352 billion, a notable 30% year-on-year increase. The figures beats expectations for €1.33 billion.
By contrast, average revenue per user (ARPU) has dipped 6% year-on-year to €4.73.
Q4 gross margin is also set to be hit, following a partnership with Google to offer a free Google Home Mini [in the US] to Spotify Family Plan master subscribers.
Despite the revenue lift, some commentators assert the service isn’t growing fast enough, pressured by Apple Music’s traction.
The industry is also facing growing competition from the likes of Amazon Prime Music and YouTube Music.