Spotify gladly announced in its strong performance in their Q1 stockholders’ report. The music streaming company is enjoying stable growth amid the COVID-19 pandemic.
Several reports have already claimed that hardware sales are now on the downtrend, while online services are going up. More people are staying put with the present devices that they have, and are putting off upgrades for another time.
Meanwhile, people that have been told to stay home are finding different ways to entertain themselves besides working from home. This trend has made people go online more for contents.
As such video streaming and music streaming companies are all reportedly fairing the weather of the Coronavirus quite convincingly.
Spotify increases total revenues through paid subscription
The music streaming company reported its AU$3 billion earnings during the first quarter of 2020. They presently have 130 million paid subscribers with additional ad-supported accounts at 163 million.
The company was confident to share that, ‘Despite the global uncertainty around COVID-19 in Q1, our business met or exceeded our forecast for all major metrics.’
Spotify attributes this growth towards the new consumer behavior patterns brought about the by the Coronavirus pandemic. They have found out through their user data that less people are using the app in transit and in wearable devices. Instead, more users are streaming the app through home speaker systems or through gaming consoles.
— Spotify USA (@SpotifyUSA) April 27, 2020
They particularly saw a huge uptick towards the latter one with an increase of 50% from the previous year. Majority of the usage is focused around background music in homes while doing chores, attending to children, cooking or just relaxing.
Growth in the whole streaming industry
The numbers are reflective of the entire streaming industry. Netflix has reached a new milestone by hitting twice of their target new subscription. Quibi, a new entrant in the industry, reports that more people are becoming interested in their platform.
— Spotify (@Spotify) April 23, 2020
Sonos, a direct competitor of Spotify, announced last week that they will be launching their own Sonos Radio. Here, Sonos home speaker users may be able to listen to exclusive ‘artist-generated contents’ with special commentaries.
Spotify moving forward
The company claims that their forecast for the rest of the year remains the same. They expect ad sales to drop, but will see an increase it new premium subscriptions. They will also be focusing more on exclusive contents through podcasts and wider licensing deals with music label companies.
The company so far hasn’t laid off anyone from their company. In fact, they have been fully working remotely from homes. Nevertheless, the Coronavirus hasn’t spared the company as Spotify said that they will be reducing the number of hires for the rest of the year.
Image courtesy of Marcus Spiske/ Unsplash and