Spotify is considered as the number one and most popular music streaming platform in the world today. And today it reached another milestone after hitting 155 million paid subscribers during the last quarter of 2020. But some reports mention that despite its massive success, the music streaming platform continues to lose money at some point.
It was mentioned by 9To5Mac that Spotify grew up to 24 percent in terms of the paid subscribers aspect. It is followed by the renowned Apple music, which listed that the number of their paid subscribers as of the last quarter of 2020 was at 60 million.
As for the monthly users of Spotify including those who are not paid users, the total all in all would be at 345 million for 2020, which has raised a significant 27 percent addition to their name as well. This numbers could prove how dominant Spotify is on a worldwide scale today, and what makes it the platform dubbed as the most popular music streaming site to date.
How Spotify Loses Money Despite Its Massive Success
Yet as per the WallStreetJournal or WSJ, it is being specified that Spotify themselves continues to lose money, despite all the numbers and figures signifying how successful the company is in terms of its industry. It is being pointed out that this is rooted upon how the subscriber base of Spotify has grew throughout the years - through the extended free trials provided by the platform itself.
Most of the streaming platforms today not just in music but also on all different niches offer a free trial for users to try on and test the service it offers. IN most cases, it runs in a one-month free trial basis, which is the case for Spotify as well. Through this, users may get to experience how they can explore the app when they are supposedly paying for it to continue. But it seems that majority of their subscriber base mainly relies on that element.
As per the WSJ report, it stated that Spotify has noted at around more than $150 million loss during their stint last year. It is lower compared to their profit loss the year before, hailing at around more than $250 million loss in 2019.
Growing Spotify's Subscriber Base
Yet despite this loss that they are experiencing in the last two years, executives from the company claimed that they would still focus on growing the subscriber base for the platform itself, where eventually more subscribers could be attracted to try the app, especially with their investment in the enormous rise of podcasts throughout the platform.
With their loss being in the occasion for quite some time, the report of growing their paid subscriber base is a very big plus for the continuity of the company, and how they could sustain the platform for the coming years. Besides Apple music, there is no more close competitor which can serve as a threat to Spotify. But everything will still depend on how long they could sustain their triumphant run.