Reports Music

Spotify Q1 2020 Earnings First Signs of Pre-Recession Weakness

Mark Mulligan
Cover image for Spotify Q1 2020 Earnings
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The 20,000 Foot View: 2020 was a solid quarter for Spotify but showed early signs of            impact across premium and especially ad supported. With a global recession looming, these may be the first signs of vulnerability in a challenged economic climate.

Key Insights

  • Spotify ended            with            million subscribers, up            on           
  • Premium ARPU            to            – the lowest figure            Spotify went public,            below the            (FY) 2015 high of           
  • Premium ARPU            thus reduced by more than            third            and will be pushed            further by new products, offers            emerging market growth
  • Spotify’s MAU-to-subscriber            fell            points from            in            2019                       in            2020, and            in            2019,            to faster free user growth
  • Spotify is            both ARPU and conversion rates            the pursuit of emerging market           
  • Latin America            Rest of World were the            of Spotify’s growth during            2020,            for            of all new subscribers;            year previously the share was           
  • Premium revenue            up            year on year but            only up            on            2019
  • Ad-supported revenue            up            on            2019 but down                       2019 – in            2019 the            decrease was only           
  • Future ad            will likely be negatively impacted            a softening ad market in            coming recession
  • Spotify has            momentum in podcasts, passing Apple                       2020 to become the most            podcast platform, with            of podcast            using it

Companies and brands mentioned in this report: Spotify, Alphabet