Spotify has Gained Over 500 Million Users, but Continues to Lose Premium Subscribers

Spotify platform has announced for the first time that it has crossed the half-billion user mark. Currently, it has 515 million MAU. This indicator is 5% higher than in the first quarter of the current year and 22% more compared to the same period in 2022. Among them, 317 million have chosen a free plan with advertising, and 210 million have become premium subscribers. Now their ratio – 60% to 40% – is not in favor of the "premium" category, and this gap continues to grow. Previously, the percentage of Spotify premium subscribers from the total user base was:

No one can say how many more "Premium" plan subscribers may give it up and switch to a free one with advertising. So far, it is clear only that there are more users of the free version of the platform than "premium" ones. One of the probable reasons for migration is the desire to save money amid a global economic downturn.

It would seem that such a situation should have led to an increase in advertising revenues, which the owners of free accounts voluntarily receive, but this did not happen. According to Spotify data, despite the growth of advertising revenue by 17% over the year, it decreased by 27% compared to the first quarter of the current year. As for the total revenue of the platform, it increased by 14% over the year, but decreased by 4% compared to the first quarter of the current year. As a result, the company stated that its profit growth was slower than projected due to the influence of "macroeconomic factors".

At the same time, Spotify emphasizes that the number of platform users has increased by 26 million in a month, which is much more than the expected 15 million. This is the most significant net growth of the company in the first quarter and the 2nd largest quarterly growth in its entire history. Now all that remains is to find a way to convert more "free" subscribers to "premium" ones.