Spotify released a new earnings report. Although it increased the number of paid subscribers, it regrets falling short of expectations in monthly active users (MAU).
According to data from the Swedish music platform, it already has 165 million paying subscribers, in addition to 365 million monthly active users for the second quarter of 2021. It represents a year-on-year increase of 20% and 22%, respectively, since last quarter.
At that time they had 158 million and 356 million premium subscribers and monthly active users.
“Most of our key metrics (subscriber growth, revenue, gross margin, and operating income) performed better than expected this quarter,” the company said in its report. “The exception was in MAUs, where we fell short of our guidance range.”
This is how Spotify explains the reasons for the failure to meet expectations with monthly active users.
“MAUs performance was slower than expected mainly due to lighter user intake during the first half of the quarter,” it believes. “COVID-19 continued to weigh on our performance in several markets and, in some cases, we paused marketing campaigns due to the severity of the pandemic.”
“Separately,” he adds, “a user registration issue associated with a global third-party platform created unexpected ingestion friction, which also affected MAU’s growth. This issue has since been resolved.”
The value of podcasts to Spotify
On podcasts, there is talk of a “modest” increase. The platform recently acquired exclusive rights to Call Her Daddy and Dax Shepard’s Armchair Expert, in addition to the company Podz. The latter has technology that automates the process of creating preview clips at key moments in podcasts.
Spotify says the percentage of monthly active users on podcasts “improved modestly” compared to the most recent quarters. There are 2.9 million shows available on the platform compared to 2.6 million last quarter.
A very positive half-year figure for the platform is advertising-supported revenue. “They exceeded our forecast,” executives note, “driven by strong underlying demand (benefiting sales and pricing) and helped by favorable ad-supported comps versus last year’s COVID-19 lows.”
Direct sales channels and podcasts were instrumental in driving advertising.