On Tuesday, this giant Music tech announced surpassing half a billion users. According to Spotify stats, the exact figure is 515 million active global users in a quarter of this year.
Spotify CEO Daniel Ek tweeted, “Spotify‘s strongest Q1 since going public in 2018 and the second largest quarter of MAU growth in our history. Thank you to our teams worldwide for all you accomplished.”
This exceeded in users turns out to be 22% greater than the previous year. Moreover, an increment of 5% has been observed as compared to the last quarterly figures.
However, according to the company’s latest financial news, this Swedish music tech suffers a potential loss of $248 million. You may be wondering how this grave loss happened while the company has half a billion users. This sharp decline is due to the fact that Spotify has adopted a new strategy to increase its ratio of free and subscribed users. The discounted rates spike up active consumers but significantly reduce overall revenue.
Although its paid subscribers now sit at 210 million and active users at 515 million, this influx impacts its revenues. Since Spotify Premium has adopted a cost-cutting strategy to gain more active users, its profit per user has reached $4.77.
Q1 2023 observation deck also quoted an operating loss would also result in an unexpected layoff. According to the report, Spotify for artists will most likely target 6% of its employees. As a result, 600 jobs are at risk.
As soon as the milestone announces this big decline, Spotify decides to shut down all its new projects. Some notable projects are the Wordle-style music game Heardle and Clubhouse-style Spotify Live audio app.