Spotify’s expansion beyond music has seen the streaming service slip back into the red after acquiring the rights to 200,000 audiobooks for premium members, including Prince Harry’s autobiography and comedian David Mitchell. ‘s “Unruly” proved to be the most popular among listeners.
The world’s largest music streaming service has been offering 15 hours of free audiobook listening per month to premium subscribers in the UK, Australia and the US since October, but the company has reported that related start-up costs have increased by 75 million euros in the fourth quarter. This contributed to the operating loss.
Some of the most popular audiobooks on Spotify include Prince Harry’s Spare, Yuval Noah Harari’s Sapiens: A History of Humanity, Rory Stewart’s Politics on the Edge, and Rebecca Quan’s Yellow. Faith” and Mitchell’s “Unruly.”
Spotify said costs related to a major layoff program also contributed to the loss. Ahead of Christmas, the company announced that it would cut its global workforce by 17%, or approximately 1,500 people, by cutting 600 jobs in June and 200 in January.
Spotify grew its premium subscribers by 4% quarter-over-quarter to 236 million in the last three months of the year, an increase of 10 million, and a record year of 31 million new subscribers. I did.
The Stockholm-based company posted an operating loss of $446 million last year, despite a 23% increase in monthly active users to 602 million by the end of the year. We are working towards achieving possible profitability. Losses in the fourth quarter were lower compared to a loss of 270 million euros reported in the same period in 2022.
Higher prices did not dampen new subscriber growth, and revenues increased by 9% quarter-on-quarter to €3.7 billion.
Spotify is diversifying away from its highly competitive core music streaming service, where it competes with Amazon and Apple, with the global record giant taking a sizable chunk of its revenue in licensing fees and an ax to grind in the podcasting business. He has tempered his once lofty ambitions.
In June, the company ended a multimillion-dollar contract with the media group run by Prince Harry and his wife, Meghan Markle, by mutual agreement.
The couple reportedly produced just one series under the Archewell Audio podcast name after signing a $20 million (£15.6 million, or A$29.1 million) deal in 2020.
Spotify, which spent hundreds of millions of dollars to acquire the podcasting company, moved to combine its studios Parcast and Gimlet into a single division after canceling 10 shows from both companies.
Nevertheless, the company remains focused on must-listen content, and last week signed comedian and podcaster Joe Rogan to a multi-year deal reportedly worth up to $250 million. Joe Rogan’s podcast has been the most popular in the world on Spotify for the past four years.
After newsletter promotion
However, this new deal ends Spotify’s exclusivity for The Joe Rogan Experience and makes it available on YouTube as well as several other podcast platforms.
Spotify handles all advertising sales for podcasts.
The company said total advertising revenue in the final quarter rose 12% year-on-year to 501 million euros, a record high.
“Music advertising revenue grew by double digits due to increased impressions sold and stable pricing,” the company said.
“Podcast ad revenue grew at a healthy double-digit rate, driven by strong growth in original and licensed podcasts and sales impressions across the Spotify Audience Network, partially offset by weaker pricing.” it was done.”
