Spotify's User Base has Exceeded Half a Billion

The streaming platform Spotify announced that it has reached a milestone of 500 million monthly active users. Its current MAU is 515 million, which is 5% more compared to Q1 of this year and 22% more compared to Q1 of 2022. Among all registered users, 317 million prefer the free version with ads, and 210 million pay for the "Premium" tariff plan. Currently, the ratio of these groups is 60%/40% – not in favor of "premium" users, and this distance between them continues to grow. Since 2019, the percentage of "Premium" subscribers out of the total number of users has been steadily declining. The results of Q1 looked like this:

No one can predict today how many users will give up the privileges provided by the "Premium" tariff plan for the opportunity to consume audio content for free, albeit with ads. So far, it is only clear that there are more and more such "defectors". One possible reason for the transition is the desire to reduce personal expenses against the background of global economic problems.

Logically, the growth in the number of users choosing the free version of the platform should have increased its advertising revenue, which is voluntarily and forcibly received by each such account. However, this did not happen. According to Spotify, annual advertising revenue showed growth of 17%, but at the same time, comparing today's figure with the figure for Q1 of the current year, there is a decrease of 27%. Looking at the company's total revenue, it grew by 14% over the year, but compared to Q1 of the current year, it decreased by 4%. As a result, company representatives had to note that its profit grows slower than previously projected, and that the likely cause is the influence of "macroeconomic factors."

Nevertheless, Spotify proudly emphasized that the number of users registered on the platform increased by 26 million in a month instead of the expected 15 million. Spotify CEO Daniel Ek stated that this is the most significant net growth for Q1 of the current year and the 2nd largest quarterly growth in the company's history since 2006. Considering such successful indicators, it is now essential to make maximum efforts to popularize the "Premium" tariff plan and convince "free" users to become "premium".