First the controversy surrounding the equally popular and controversial podcast star Joe Rogan, then the announcement of the around 300 million dollar sponsorship contract with FC Barcelona, ​​which also includes the naming rights to the legendary Camp Nou: the first quarter was made up of Spotify Anything but uneventful.

Benjamin Fisher

Editor in Business.

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Of course, the Ukraine war also hit the business of the music streaming market leader.

The service closed its Russia offices early on.

In addition, access to content from Russian state media was restricted and the offering of RT and Sputnik in the EU and “other markets” was removed.

The platform itself initially remained available.

In mid-March, however, the subscription offer was discontinued, and about two weeks later - with reference to possible consequences for employees and listeners due to the new Russian media legislation - as was the advertising-based free version.

Plus around 2 million subscribers

At the end of the first quarter of 2021, Spotify now had 182 million subscribers and 422 million monthly users - after 180 million and 406 million respectively at the end of last year.

According to Spotify, however, a one-off effect was important for monthly active users: After technical difficulties in March, some users had to create a new account, which on paper led to around three million additional monthly active users.

The withdrawal from Russia resulted in the loss of around 1.5 million subscribers.

CFO Paul Vogel had already anticipated this in mid-March and remarked at the time that without this effect one would move above expectations, which also implied that layoffs due to the Joe Rogan debate were apparently limited.

Leaving aside the Russia effect, the increase in subscribers has exceeded the forecast and the overall business development is very satisfactory, according to Spotify.

In Latin America and Europe in particular, growth exceeded expectations.

With an increase of three million (and 418 million active users), this forecast was also rather conservative and had caused disappointment among investors

– also because the service announced that it would no longer issue an annual forecast.

For the current quarter, Spotify expects an increase to 187 million subscribers.

Another 600,000 subscription losses due to the completion of the withdrawal from Russia are likely to have an impact here, as the Swedish company reports.

The share was up almost three percent before the market, after losing recently in the wake of the weak Netlix numbers.

When asked about the video service's first loss of subscribers in more than 10 years, Spotify boss Daniel Ek emphasized in an interview with investors after the figures were presented that he only saw limited parallels between Netflix and Spotify.

Of course, both are media companies and work with subscriptions, "but that's where the similarities end," says Ek.

In contrast to Netflix, Spotify licenses a large part of its content and does not produce it itself, and Spotify also has a strong free offer with advertising.

In general, the audio market will continue to grow strongly.

The Swede also emphasized the appeal of the expensive Barca sponsorship and referred, among other things, to the large number of fans and the radiance of the FC Barcelona brand.