If you’re diving headfirst into music to hide from COVID induced anxiety, you’re not alone. The music streaming giant Spotify can certainly attest to this.
Spotify closed the first quarter of 2020 with an astounding 286 million active monthly users and 130 million paid subscribers. As businesses around the world struggle to stay afloat, Spotify outperformed their original pre-COVID forecasts. This includes a 22% increase in revenue compared to the same period last year, drawing in €1.85 billion for the first 2020 quarter. The majority of this – €1.7 billion to be exact – was generated through subscription income. The trends echo that of similar streaming giants such as Netflix, who have reported a surge in usage around the globe.
While Spotify outperformed pre-COVID expectations, it wasn’t all good news. Ad revenue was 20% lower than forecast with the sharp decline commencing in March. Spotify reported all sales channels suffered from businesses postponing, reducing, or canceling ad expenditure altogether.
Unsurprisingly with countries across the globe forced to stay indoors, Spotify also observed changes in how users consumed their services. A 50% increase was seen through TV and gaming consoles, while web platforms, wearable technology, and automotive technology usage dropped. Geographical listening patterns also demonstrated a notable shift from late February as the virus hit European shores. Italy and Spain showed a notable decline in daily usage rates, however, this has gradually started to increase again as infection rates show signs of slowing.
Spotify themselves have curbed expenditure in response to the pandemic with a reduction in hiring, travel expenses, and promotional spending. The Stockholm headquartered business is one of the lucky few in the industry that hasn’t been too hard hit and continues to undertake numerous initiatives to support those who have.
