April 29, 2019
SpotifyTechnology S.A. April 29 announced its branded music subscription streaming service reached 100 million paid subscribers in the first quarter, ended March 31.
That beat the previous-year period with 75.5 million paid subs. It also nearly doubled Apple Music with 50 million subs.
“Outperformance was driven by a better promotion plan in the U.S. and Canada,” founder/CEO Daniel Ek and CFO Barry McCarthy said in a statement, alluding to a 23% price reduction ($12.99 to $9.99 monthly) for the “Spotify Premium + Hulu” promotion in the U.S.
McCarthy was Netflix’s CFO from 1999 to 2010.
Spotify launched India in late February expanding its global market footprint to 79 countries. More than 1 million users signed up for Spotify in the first week in India. The company now has more than 2 million users in India.
Regardless, the streaming service reported an operating loss of €47 million ($52.4 million) on revenue of €1.5 billion ($1.67 billion), which was up 33% from revenue of €1.1 billion ($1.22 billion) last year.
The service, along with Pandora, Google and Amazon Prime Music, remains embroiled in a royalty dispute with songwriters.
Last month, the Register of the Copyright Office approved upping songwriters’ royalties from music streaming services from 10.5% to 15.1% through 2022.
It was biggest rate increase granted in CRB history, according to the National Music Publishers’ Association.
Spotify & Co. are appealing the hike, claiming it “harms music licensees and copyright owners,” among other issues. Apple Music is not appealing the ruling.