Reports Music

Spotify by the Numbers Trials, Churn and Margin

Mark Mulligan
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The 20,000 Foot View: This report presents analysis of Spotify’s key performance metrics as presented in the            filing in advance of its direct listing. The report focuses on business performance metrics, such as user acquisition and retention, user engagement and user spend. In addition to the headline numbers, this report includes detailed supplementary data analysis to create further implied datasets that were not reported in the filing.

Key Findings

  • Global subscribers            by            million in quarters without            trials’ and            million in the            with them
  • Engagement is            subscribers played an average of            a month in 2017, compared                       in 2015
  • Inactive subscribers            from one million in            2016            four million in            2017
  • On an            basis churn was            in 2017,            from            in 2016
  • Lost subscribers                       million in 2017, up from            one year earlier
  • Spotify is            subscribers faster than free users            all regions except rest of           
  • Spotify had            gain one extra subscriber for            additional two subscribers it held            in 2016. In 2017 this            slightly to           
  • European and            American subscribers each grew by            million and two million respectively            trials
  • Super trials            Spotify to grow nine months            than it would without them
  • Quarterly churn            by an average of            in            trial quarters
  • Gross profit            subscriber was                       higher in the            with rights payments for super           
  • It took            average of            months to recoup            costs per subscriber in 2016,            to            months in 2017
  • Spotify should                       million subscribers by            2018, by            Apple Music is likely to            hit around            million over the            period

Companies and brands mentioned in this report: Amazon, Apple, Apple Music, Deezer, Spotify