(If you’d like to see charts for the rest of the geographic regions, I made a Google spreadsheet
with that and a little bit more information based on Spotify’s investor reports. There’s far more I could do with data visualization and such, but since I included a bit of this work later in the newsletter, I figured it might be a fun resource for those interested in trying to glean a little more out of company status reports.)
This information only goes back to the top of 2018 but I wanted to highlight a quick record of Spotify’s expansion over the last couple of years. In early March 2018, the company launched in Israel, Romania, South Africa and Vietnam
prior to going public. On November 13, 2018, Spotify entered into the North African and Middle Eastern markets
by launching in the United Arab Emirates, Kuwait, Oman, Qatar, Bahrain, Algeria, Morocco, Tunisia, Jordan, Lebanon, Palestinian Territories, Egypt, and Saudi Arabia. Then in late February 2019, after many months of speculation, it launched in India
. That’s 18 different market launches since the top of 2018 and the company has grown by roughly 24,490,000 monthly active users and 5,650,000 paying subscribers. While the “Rest of the World” saw an increase of 75% from Q4 2018 to Q4 2019 in monthly active users, its subscriber growth was in line with the rest of Spotify’s markets at about 29%.
The comparison between the “Rest of the World” and other markets is a bit hard to quantify because we can’t see the breakdown of how these territories fared when Spotify first launched, but I was more interested in a particular talking point repeated by the company. A phrase that always buzzes around Spotify during quarterly reports is ARPU (Average Revenue Per User), which the company’s press release stated as
For the Premium business, average revenue per user (“ARPU”) of €4.65 in Q4 was down 5% Y/Y (down 6% excluding the impact from FX rates). A significant portion of this decline was driven by the extension of the free trial period across our entire product suite in the quarter. Excluding the impact of Trials & Campaigns, ARPU would have declined 2% Y/Y as a result of continued mix shifts in product and geography.
I’d assume “Trials & Campaigns” encompasses family plans, but does it include the highly-discounted year-long India plan
? What I’ve long argued (and the numbers here don’t really contradict) is that Spotify’s success in Europe, Latin America, and North America shouldn’t be expected to be easily replicated across other markets of the world where the company faces stiffer competition. Mark Mulligan spoke to that issue
in regards to India in that while the “Rest of the World” is Spotify’s fastest-growing market, it is lacking on both the ad-supported and subscription side. He suggested a telco partnership, which Spotify’s so far has never, at least publicly, pursued in the country. An early tip-off, to my estimation, the company wasn’t taking the market seriously, as the growth of streaming across the globe is often built upon telcos.
Considering Spotify forecasts losses for the calendar year 2020, there appears to be very little that is fascinating about the company in the coming months. Perhaps more moves into the world of audio but even in that space, as I outline above, it’s hard to separate Spotify’s strengths divorced from press spin and a deregulated media environment. Daniel Ek can say he bought the next ESPN
and I can say Penny Fractions is the next Billboard
. It doesn’t make either statement true.