In Spotify’s first ever earnings report, the streaming music came up short, pulling in $1.36 billion revenue That’s compared to $1.4 billion in revenue and an adjusted EPS loss of $0.34. Spotify hit 170 million monthly active users, up 6.9 percent from 159 million in Q4 2017, and 75 million paid subscribers, up 5.6 percent from 71 million.
Spotify is hoping to boost paid subscriber numbers by first luring more users to its free ad-supported service. Last month it unveiled a revamped free tier that lets users listen to songs on-demand on particular Spotify-controlled playlists instead of only being able to play in shuffle mode. The idea is that once users get a taste of on-demand listening, they’ll pay to upgrade so they can listen to whatever they want across the whole catalog.
That strategy could not only boost subscriber numbers, but also give Spotify more leverage over the record labels. More than 30 percent of all Spotify listening now happens on its owned playlists. That gives it the power to choose what will become a hit, and in turn means record labels need to play nice. This could help Spotify secure more exclusive content and a better bargaining position in royalty negotiations.
Tech Stories Are Here.