Spotify Attributes 27% User Growth In Q4 To India Boom, Traction For Podcasts

Swedish music streaming giant Spotify reported a 27% YoY growth in its monthly active user (MAU) base to 345 Mn in Q4 2020 (the October-December period in the last calendar year). The growth exceeded the company’s projections of 340 Mn to 345 Mn MAUs for this quarter.

Spotify added 25 Mn MAUs in the quarter and benefited from faster growth in India, US, and Western Europe, with “India serving as a notable source of upside vs. our forecast driven by successful marketing campaigns,” the company stated. 

It added that podcast usage has been a significant factor in the net additions in the quarter. Further, the company’s new premium subscription tiers in India as well as other promotional offers contributed to the growth. 

“Of note this quarter was the launch of Spotify Premium Mini in India and Indonesia, which gives users daily and weekly access to a subset of their favorite Premium features for a lower price as part of Spotify’s commitment to continuously explore new ways to improve our Premium experience.”

In December, Spotify slashed the prices of its ‘Premium Mini’ plan, priced at INR 7 for one-day use and INR 25 for one-week use, from INR 13 and INR 39 respectively. The plan is only applicable for premium Spotify services on smartphones and tablets, and not on the desktop apps or the web, similar to the Netflix plan for mobiles in India. 

Spotify also slashed the price of its yearly subscription in India from INR 1,189 to INR 999 for a limited period in December 2020. Its other premium subscription plans for India are priced at INR 119 for one month for a single user, INR 149 for the duo plan, and INR 179 for a group of six accounts.

In Q4, premium (paid) subscriptions grew 24% YoY to 155 Mn, but average revenue per user for the subscription business fell 8% YoY to 4.26 euros. Earnings from premium subscribers grew 15% Y-o-Y to 1.8 Bn Euros, while earnings from ad supported users grew 29% YoY to 281 Mn Euros during the quarter. 

Podcast performance benefited from strong underlying demand from advertisers with a 50% increase in the number of companies spending on podcasts.

Spotify does not monetise podcasts in the India market, at present, but the category has witnessed significant growth in the market, thanks to more than 40 startups operating in this space and catering to 200 Mn monthly active users (MAU). The lockdowns induced by Covid-19 further bolstered its growth and the segment saw the listenership rising by 30%, according to a KPMG report.