Spotify earnings present subscription progress after layoffs, worth hike

Spotify inventory jumped greater than 7% throughout pre-market buying and selling Tuesday, following the corporate’s announcement that it added a record 31 million premium subscribers last year.

The music streaming big now boasts 236 million paid subscribers, in line with its information launched fourth quarter earnings report. That progress got here at the same time as the corporate raised costs to $10.99 a month in 2023. It was Spotify’s first price increase in 12 years. A month-to-month subscription to Spotify had beforehand price $9.99.

The value enhance, together with new subscribers and three rounds of layoffs in 2023, has helped the corporate slender its losses.

Spotify’s working loss plunged 66% in within the three months ended Dec. 31, to an lack of $81 million (75 million euros) from $248 million (231 million euros) in the identical interval the prior 12 months.

The corporate’s income was up 16% year-over-year, to $3.9 billion (3.7 billion euros) in its fourth quarter, from $3.3 billon (3.1 billion euros).

Spotify’s shifting advert technique

Joe Rogan secured a new multiyear deal with Spotify, introduced final week. The brand new settlement would permit the favored podcast “The Joe Rogan Expertise” to be distributed throughout numerous platforms together with YouTube, Amazon, and Apple. That’s a change from the earlier deal’s phrases, which made the present unique to the music streaming service, and it may sign a brand new advert technique for Spotify.

“Whereas exclusivities have been web constructive on the facet, it’s not driving as a lot as the chance that we see on the advert facet,” Spotify CEO Daniel Ek mentioned Tuesday on a name with buyers. “By broadening distribution, we predict we will accomplish quite a few totally different targets. Most notable amongst them, we’re going to be extra aligned with the creator.”

Advert-supported income for the corporate was up 12% year-over-year within the fourth quarter to $538 million (501 million euros) from $482 million (449 million euros).