Spotify, the world’s most popular online music platform, released its financial reports for the second quarter of 2020. In the statements made by Spotify, it is stated that the number of Spotify Premium subscribers is 138 million. Net income of the company in the second quarter was 1.89 billion dollars.
With the widespread use of the Internet, one of the innovations in our lives has been online music platforms. Thanks to these platforms, users got rid of downloading music and transferring them to their smartphones. Because the platforms, which demand very small amounts, offer unlimited music enjoyment to the users. Spotify comes to mind first of all when it comes to online music platforms.
In a meeting today, Spotify officials announced some figures on how the second quarter of 2020 passed. In the statements made by Spotify, it was stated that the number of paid subscribers of the platform increased higher than expected. However, the company still failed to reach its goals regarding revenues and profit.
According to the statements made by Spotify, the monthly number of the platform has increased to 299 million. This shows that there is a 29 percent increase in consumers actively using Spotify. The platform gained 8 million new subscribers worldwide in the second quarter of 2020. 8 million new subscribers show that Spotify’s new subscriber base has increased by 27 percent annually. According to the latest figures announced, the number of Spotify Premium users is 138 million.
In the statements made by the authorities, it is stated that the increase in operating expenses and shares related to shares is 48 percent. Spotify, which lost 21 percent in advertising revenues, states that the main reason for this decline is the coronavirus pandemic. As of June 30, the platform has reached the usage and advertising levels before the COVID-19 outbreak, according to officials.
Spotify also touched on the expectations of users for the progressing processes. According to official statements, Spotify will have around 317 million active users at the end of the next quarter. It is predicted that 144 million of these users will have Spotify Premium subscribers. According to the company, there will be serious increases in the number of users and premium subscribers of the platform in the next quarter.
Even though Spotify increased the number of subscribers, it could not establish the income-expenditure balance at the desired level.
Spotify officials also announced the company’s income and expense table in their statements. In the statements made, it was stated that Spotify had 1.89 billion dollars revenue in the second quarter of 2020 and the annual increase in this income was 13 percent. However, the company states that its net loss rose to 356 million euros. One of the reasons for this loss is that revenue from Spotify Premium users decreased by 9 percent annually.
Spotify failed to hit the loss it had targeted for the second quarter of 2020. In fact, the difference between expectations and net results was 126 million euros. Spotify states that the biggest reason behind this loss is “social expenses”. What Spotify implies from social costs is the compensation that Spotify pays for its stock values in various countries, and also the salaries (and other expenses) of employees in some countries.
The results announced by Spotify seem to be positive for Spotify despite the increases in losses. Because the company makes big investments in the platform and these investments are adopted by the users in a short time. Especially, podcast broadcasts created by Spotify with famous names enchant users. According to Spotify, podcast rest rates continue to rise at three-digit rates on an annual basis.