Discover more from The Ankler.
SPOTIFY's Q1 2022 results show users do not have a Joe Rogan problem. But looks like SPOT may have a Q2 problem.
Forget video streaming - an audio streaming service will be the first company to reach half a billion streaming accounts, much less the “mythical Billion” that… keeps getting touted as being a reality within reach by (former) video execs for some reason #NotHelping.
Granted - only 43% of SPOTIFY’s 422 Million users actually pay for it, and free “ad-supported” account growth is still greater.
PREMIUM (paying subs): 182 Million
+15% Year over Year
Note: this is +2 Million from Jan thru March, slightly below guidance but reflects a loss of 1.5 Million in RUSSIA
FREELOADERS: 252 Million
+21% Year over Year, +16 Million from Jan thru March.
Any Joe Rogan controversy among media pundits and TWITTER does not seem to be having a detrimental effect whatsoever. Shocking.
SPOT had impressive growth at 23% vs last year, at $2.66 Billion. But… pretty much all of that money still goes to record labels:
SUBSCRIPTION (ie most $$ goes to labels): $2.3 Billion
ADVERTISING (ie money that SPOT can keep): $282 Million
SPOTIFY Operating Income (profitability) was… -$6 Million in Q1 on that $2.66 Billion of revenue, and I still have no idea how this company will ever become significantly profitable. To be fair they are cash flow positive, but again, to a small degree ($37 Million).
Granted the Ad $$ is +31% from a year ago… but clearly it’s still not enough to make the company a profitable machine in a meaningful or even consistent basis. Something that hasn’t changed since it had half of the subscriber base it has now.
And Podcasting is clearly nowhere near the answer here, more than 2 years into their push into the format.
But at least their user base is relatively evenly distributed, unlike almost every other streaming service outside of NETFLIX:
NORTH AMERICA: 23%
EVERYWHERE ELSE: 22%
However: 68% of Paying subscribers are in Europe or North America.
Get the Hollywood, Streaming and Media industry news to know each morning by 830am EST.
Subscribe to THE WAKEUP, free of charge
How will this be received?
Well the market is often just as concerned (or more so) with “what’s ahead” than with “what happened”… and they’re projecting an Operating loss of over $200 Million for Q2. Plus - the subscriber losses from the exit from RUSSIA will still extend into Q2, but uh yeah, otherwise they’re optimistic.