Spotify gains ten million premium subscribers following cost-cutting redundancies
Streaming platform Spotify have increased their premium subscriber base by ten million during the final quarter of 2023.
During this financial period, Spotify made a revenue of €3.67billion, marking an increase of 16%. After implementing cost-cutting measures such as redundancies and a decrease to their marketing budget, they made a net loss of €70million, which is significantly healthier than the €270million loss they suffered at the beginning of 2023.
In addition to gaining another ten million premium subscribers, which brings that tally to 239million, they exceeded their own expectations by adding another 18million monthly active users.
While their operating costs grew by 2% compared to this quarter of 2022, this was largely due to Spotify paying out €139million to employees whose services they no longer required.
Due to the increase in premium subscribers, their revenue from this avenue increased by 17%. Furthermore, through advertising, they earned a quarterly high of €501million.
In a statement, Spotify revealed their podcast advertising revenue “grew in the healthy double-digit range, driven by significant growth in sold impressions across original and licensed podcasts and the Spotify Audience Network, partially offset by softer pricing.”
In the first quarter of 2024, Spotify expect to accrue another three million premium subscribers and a further 16million monthly active users, which would bring that total to 618 million. If they meet their targets, revenue will be €3.6billion.
The new figures come after Spotify reduced its workforce by 17% as part of cost-saving measures. CEO Daniel Ek described the decision as “difficult”, citing a significant slowdown in economic growth. With approximately 9,000 employees, Spotify planned to cut around 1,500 jobs in the layoffs.
Ek further explained: “We debated making smaller reductions throughout 2024 and 2025. Yet, considering the gap between our financial goal state and our current operational costs, I decided that a substantial action to rightsize our costs was the best option to accomplish our objectives.”
Never Miss A Beat
The Far Out Music Newsletter
All the latest music news from the independent voice of culture.
Straight to your inbox.