The filing continued: “Downward pressure on ARPU has moderated, and we expect that ARPU declines through the remainder of the year will be in the low single digits. ARPU was €4.71 in Q1, which Spotify noted was roughly flat year-on-year, or down 2% “excluding the impact from foreign exchange rates”. Labels have voiced concern about this trend, and its impact on Spotify’s ARPU – average revenue per user. “Family and Student plans continue their fast growth and have continued to increase as a percentage of our total subscribers,” said Spotify. There are sensitivities around some of this.
It added that the growth in premium subscribers was driven by a promotion in the US and Canada, as well as “continued strong growth” in family plans, plus the impact of a price cut to the combined Spotify and Hulu subscription in the US. Spotify described the first quarter as “largely positive with most metrics outperforming our expectations and landing at the high end of, or exceeding, our Q1 guidance”. The company added that it now has more than two million users in India, having signed up one million in the first week after its launch in late February. As for the financials, Spotify’s revenues grew 33% year-on-year to €1.51bn ($1.69bn), while its net losses narrowed in that period from €169m in Q1 2018 to €142m in Q1 2019. Spotify now has 217 million monthly active users overall, so its ‘conversion rate’ is now just over 46%, up from 43.4% a year ago. That’s up from 96 million at the end of 2018. Spotify has published its financial results for the first quarter of 2019, including a significant milestone: 100 million premium subscribers.
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