Spotify Technology posted greater-than-expected user growth in the latest quarter as the music-streaming giant improved long-term retention of its listeners and broadened its podcasting business.according to The Wall Street Journal.
The company ended the quarter with 232 million monthly active users, above estimates for growth of up to 228 million. Spotify said it now has 108 million premium subscribers, its most lucrative type of customer, in line with the company’s guidance.
The period included Spotify’s biannual campaign offering three months of its premium service—regularly priced at $9.99 a month—for 99 cents. The company said monthly churn, or the number of users who end a subscription, declined from the previous quarter and year-over-year to a record low 4.6%.
Average revenue per user fell less than 1% to $5.42 in the quarter. That decline—pressured by new subscribers coming in via discounted plans through family and student accounts, and from international markets with lower pricing power—is expected to continue to subside this year.
Spotify’s revenue from subscriptions rose 31%. Ad-supported revenue, a smaller contributor to the top line, jumped 34%, amid increased demand for podcast advertising as the company builds out that business through acquisitions and developing original content.
The company said tens of millions of users are now streaming podcasts on the platform on a monthly basis, with its overall podcast audience growing more than 50% from the previous quarter and nearly doubling since the beginning of the year. During the quarter, Spotify struck a deal for the entertainment-production company started by Barack and Michelle Obama to develop and produce podcasts that will be available only on the streaming service.
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