Hitting 100M app downloads deserves Adele's Grammy... Getting 100M humans to pay monthly for something is elite tech status — Netflix and Amazon have it, and now Spotify has joined the band, too. Quarterly earnings showed 217M people logged into Spotify accounts at least once a month. Here's who they/you are:
- 100M premium users (twice as many as Apple Music): Family and student discounts have cut the average amount users pay to just $5.27/month. But that's okay because streaming customers are "very sticky" — "Premium" revenue makes up 90% of Spotify's total.
- 117M free users: They can jam out on "Taylor Swift Radio" until Love Story gets buzz-killed by a mortgage ad. Spotify's goal is converting them to Premium via those free trials and discounts.
A scrub is a guy that thinks he's fly... but doesn't make profits. If you're surprised Spotify lost $158M last quarter, remember it pays 70% of revenue back to artists like TLC and their record labels. And it splurged $500M lately to buy podcast companies...
Pods are Spotify's profit puppies... CEO Daniel Ek thinks 20% of listening on his platform won't be music — that's why he calls Spotify an "audio" company. And it's why he bought Gimlet's pod portfolio in February. Spotify doesn't have to share revenue with podcasts because they're financed by their own in-pod ads. Or Spotify already owns them.