Spotify's growth story continues: In the third quarter, the music streaming market leader gained 7 million subscribers and now has 195 million paying users.

The number of monthly active listeners grew by 23 million to 456 million.

Both values ​​were slightly above the previously given forecast, as the Swedish company announced on Tuesday after the US stock market closed.

Compared to the previous year, sales increased by 21 percent to 3.04 billion euros, with subscription income contributing around 2.7 billion (plus 22 percent).

Advertising sales amounted to 385 million euros, which corresponds to an increase of 19 percent compared to the same period last year.

In the second quarter, Spotify's advertising business had grown by 31 percent

Benjamin Fisher

Editor in Business.

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The service referred to the difficult advertising environment due to the economic environment – ​​especially in Europe.

Other tech companies are also increasingly struggling in this area: Google's video platform YouTube even reported a slight drop in sales on Tuesday.

Spotify has been investing heavily in the podcast division for some time, not least to boost its advertising business.

In the US, Spotify has also started selling audiobooks independently of subscriptions after the Swedes took over the audiobook platform Findaway last year.

Ek: 2022 an “investment year”

The weaker growth in advertising revenue also meant that the gross margin of 24.7 percent was below the forecast of 25.2 percent, it said.

In addition, the effects of an unspecified extension of a "major contract with a music publisher" outside the United States were cited.

Talking to investors after the figures were presented, Spotify boss Daniel Ek also referred to further spending on new content and further developments of the platform.

It has always been transparently emphasized that 2022 will be an "investment year" and that this strategy will likely squeeze the margin in the short term.

Operationally, there was a minus of 228 million euros, after a plus of 75 million in the same quarter of the previous year.

The bottom line was minus 166 million euros, after a small net profit of 2 million euros in the third quarter of 2021. Spotify shares lost around 6.7 percent in after-hours trading.

Spotify aims to increase its subscriber base to more than 200 million by the end of the year.

The forecast is 202 million.

In terms of average revenue per subscriber (ARPU, "premium average revenue per user") - a value that is also being monitored very closely in the music industry - Spotify reported an increase of EUR 4.63 compared to the second quarter (EUR 4.54). Euro).

Compared to the previous year, this is an increase of 7 percent, but assuming constant exchange rates, a minus of 1 percent is recorded.

A logical step to increase ARPU would be further price increases.

Apple says goodbye to 9.99 euros

Apple announced on Monday that it would increase the price for a single subscription by one euro to 10.99 euros or dollars or pounds.

This made Apple Music the first major global service to give up the symbolic price point of 9.99.

Since the start of music streaming, the price has remained the same in many places over the years.

Family or student subscriptions had previously been increased on Spotify in various countries.

The 9.99 had previously only been touched by Deezer.

The smaller French service had raised the price to 10.99 euros in Germany at the beginning of the year.

In contrast to Spotify, however, HiFi sound quality is included here.