Spotify Paid Subscribers Soar by 27 Percent to 144 Million in 3Q20

Spotify grew its paid subscriber base by 27% in 3Q20 to 144 million. Its monthly active users also increased by 29% year-over-year (YoY) to 320 million.

According to data by Comprar Acciones, the number of Spotify users was only 18 million in 1Q15. It doubled to 36 million by 2Q16 and again to 71 million in 4Q17 before reaching the current figure.

In 3Q20, Spotify's subscription revenue increased by 15% YoY to €1.79 billion. Overall revenue was €1.98 billion, marking a 14% YoY increase. Ad revenue, on the other hand, grew by 9% YoY and 41% quarter-over-quarter (QoQ) to €185 million.

Despite the growth though, Spotify made a loss of €101 million, down from a €241 million profit in Q3 2019. The loss resulted from the fact that Spotify is growing its user base by offering discounted plans. Revenue per user dropped by 10% YoY during the quarter to €4.19.

According to a Billboard report, streaming music sales accounted for 56% of all sales in the global music industry in 2019. Streaming revenue shot up by 23% YoY to $11.4 billion while subscription revenue grew by 24% and accounted for 40% of label income.

Spotify was at the helm of the market with a 35% share. Apple Music was second with 19% while Amazon Music was third with 15%. Together, the three controlled 67% of the market.

In 1Q20, the number of subscribers shot up by 30% to 400 million according to MIDiA. Spotify had a 32% share followed by Apple Music at 18% and Amazon Music at 14%. By the end of 2020, the music streaming market's revenue is expected to grow by 15% to $16.4 billion. Based on Statista data, the user base will also grow by 15.1% to 595.8 million.