Spotify has confirmed that it now officially has 100 million subscribers for their premium option. This was confirmed in the music streaming company's latest financial update for the first quarter of 2019 ending 31 March 2019.
This is a 4% increase in paying subcribers from the last quarter of 2019.
“Over time, our ambition is to develop a more robust advertising solution for podcasts that will allow us to layer in the kind of targeting, measurement, and reporting capabilities we have for the core Ad-Supported business. Ad-Supported revenue growth underperformed our expectations in Q1, primarily in the US and primarily with our sponsored sessions video product. The performance shortfall was pricing related. We have course corrected and are seeing strong growth across the ads business in Q2. Two of our strongest areas of growth in Q1 were measurement and programmatic revenues. Measurement related revenues doubled from 20% to 40% of total ad revenues Y/Y, while Programmatic and Self-Serve grew 53% Y/Y and now account for 26% of Total Ad-Supported Revenue.”
Spotify user and financial metrics for Q1 2019.
Increase in music streaming revenues, not so much for music artists
It is not only Spotify’s premium subscribers that grew but also its revenue. The company reported that total revenue in Q1 2019 was €1,51 billion, which it said is a 33% year-on-year increase. Of that amount, 92% was premium subscriptions revenue. However, especially for African music artists, not much of that revenue makes it to their bank accounts given the amounts paid for each stream.
Spotify approximately pays $0.006 to $0.0084 per song streamed, this small amount is not necessarily paid to the music artist directly but to the party/parties that hold the music rights. As you can see, every time a subscriber streams a song on Spotify the less than $0.01c can be split potentially be split between, depending on agreements, the music artist, producers, the record label, and songwriters.
So, for a music artist in Africa to earn $10,000, they'd need about 1,2 million song streams, and still split that amount depending on agreements in place. The situation, however, was better when digital music was sold per song or album.
Spotify also reported that its free tier, which is Ad-supported, grew revenue to € 126 million, a 24% year on year increase, however, it was a drop from the €175 million it earned from Ads during the last quarter of 2018.
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