Spotify, the renowned music streaming platform, has experienced remarkable growth in its total active users during the second quarter of 2023.
According to the company's recent financial performance report, Spotify's monthly active users witnessed a significant surge of 27%, reaching a staggering 551 million.
This figure exceeded expectations, with a remarkable net addition of 36 million users, surpassing the projected number by 21 million. This surge marks an all-time high for the company and indicates its popularity across global markets.
NEW YORK, NEW YORK - FEBRUARY 01: The Spotify company logo is diaplayed as traders work on the floor of the New York Stock Exchange (NYSE) during morning trading on February 01, 2023 in New York City.
Substantial Growth in Spotify Subscribers
In addition to the impressive growth in active users, Spotify's subscriber base also witnessed substantial growth, with a 17% year-over-year increase to 220 million subscribers.
That included a net addition of 10 million subscribers, surpassing the guidance by an impressive 3 million subscribers. This growth represents the highest Q2 for the company in its history.
The company's total revenue also grew, reaching €3.2 billion ($3.5 billion), showing an 11% year-over-year increase and aligning with the provided guidance. Amidst the remarkable performance, there have been reports of Spotify planning to increase its monthly user fees.
While the specifics of the price hike are not yet fully disclosed, the increase is expected to be around $1, bringing the monthly subscription fee from $9.99 to approximately $10.99 for its individual tier.
This move by Spotify follows a trend in the streaming industry, where other platforms like Apple Music and YouTube Premium have also implemented similar price increases. Apple Music, for instance, recently raised its prices by a dollar for its individual plan, citing increasing licensing costs as the reason for the adjustment.
According to Apple's statement, the price increase is attributed to rising licensing costs. However, the company justifies it by emphasizing that the additional revenue would contribute to supporting artists, producers, and others involved in music streaming services.
However, Spotify's price increase may not be without its own rationale. While the company is yet to officially announce the reasons behind the change, the reports suggest that it might be aimed at supporting the artists, producers, and contributors involved in the music streaming process.
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Spotify Removes iOS Paid Subscribers
In related news, Spotify is taking action against Apple's App Store commission rates by removing iOS paid subscribers from the Premium tier at the end of their cycle.
That means their subscription won't automatically renew to Premium, and they'll have to resubscribe through third-party payment channels. Spotify has been charging Apple users more to cover the 30 percent commission rate, but now, they're advising users to seek alternatives.
After the cycle ends, subscriptions won't renew, and users will be pushed to a free account. This move is a bold response to Apple's commission policy and aims to offer users different payment options.
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