Published on July 30th, 2024 | by Jameelah "Just Jay" Wilkerson

Spotify Reveals Record Subscriber Count After Expanding Service

Since 2020, Spotify has been going through a period of experimentation. They embraced AI-powered features when generative AI showed up on the scene, while vastly expanding the types of entertainment available. That included bagging the rights to popular podcasts and launching an audiobook service. That seems to have paid off, now that their Q2 earnings report shows record growth after a period of stagnation.

Source: Unsplash

Renewed Interest in Variety Streaming

Spotify’s latest earnings seem to show that variety, along with some other quality-of-life features, has breathed new life into the company. While streaming services were ascendant in every other industry, Spotify had started to stagnate as the leading music streamer in the world.

On the TV, video streamers are still battling for dominance over the world’s TV screens by using exclusives and tactical bundling. On the internet, websites also host streams through video-sharing sites like YouTube or those in iGaming. Many sites host casino games over the internet, including streams of online roulette where the game is played live, for an audience of players taking part in real-time. Between movies, TV shows, documentaries, and live-streamed games, there’s a lot of variety to be found in video streaming. That changes with music streaming, however, as you can only listen to music in a few certain ways.

Spotify’s AI Upgrades

To say Spotify has cornered the music streaming market is an understatement. It also came at a disadvantage, as growth slowed and subscriber numbers stopped growing. So, in response, they turned to innovative AI developments that could make your listening experience more varied than ever. They introduced AI that could create playlists based on your previous listens, and even ‘daylists’ that track your mood throughout the day to recommend mood-appropriate songs.

More recently, they unveiled the AI playlist where you can find a music playlist using text prompts, just like you would with ChatGPT. It means users can find music based on moods, references, and other context-specific cues that search bars miss. This beta feature should hit most people’s premium accounts by the end of 2024 and reflects Spotify’s focus on innovation going forward.

Spotify’s New Library

Starting in 2020 and ramping up in 2021, Spotify started to introduce podcasts to their platform. That included buying the rights to popular video podcasts, in a move that cost them more than $1 billion. It was widely reported as a risky investment, as earnings reports failed the register a meaningful increase in subscribers. However, over time, it seems to have made Spotify more appealing as a platform that doesn’t just offer music.

In the same vein, Spotify launched its audiobook services in 2022 with later expansions that brought its library to over 250,000 books. A premium plan grants users access to the library, and they also created a separate tier for readers who want those books but don’t want to pay for ad-free music streaming. Now with a literal library in their arsenal, Spotify is targeting music and book lovers through the same service.

Source: Unsplash

Spotify’s Q2 2024 Earnings Report

That brings us to the second quarter of 2024, a record earnings report for the company. Revealed on the 23rd of July, Spotify’s Q2 report showed that its revenue grew by 20%, to $4.14 billion. This also resulted in a $295 million profit, after suffering from net losses in previous years.

Despite hit-or-miss revenues over the last four quarters, subscribers have been reliably surging since the middle of 2023. This trend continued into Spotify’s second quarter report as they gained seven million premium subscribers, bringing the total to 246 million. That’s about a third of its active monthly user base, at 626 million, having gained 11 million since the last report.

After a tumultuous few years, Spotify’s latest report is a sign that their new direction might yield long-term success. However, it’d take multiple positive earnings reports to be sure, and streaming service customers are known to be fickle as competition between large streaming services gets fiercer.

SHARE ON FACEBOOK SHARE ON TWITTER