Spotify user growth slows

UPDATED: Spotify’s monthly average users (MAUs) grew 18% in 2021 to 406 million by the end of the year the streamer reposted Wednesday. That’s respectable and near the top end of their guidance but far from the meteoric growth of years past.

Premium Subscribers grew even a bit slower at 16% Y/Y to 180 million in Q. that’s strong growth for some, but down from earlier years, and investors were spooked by Spotify’s forecast Wednesday that more slow growth was ahead.

Premium ARPU (average revenue per unit or user) grew just 1% on a constant currency basis. On Wednesday’s earning call, Spotify execs predicted similar slow growth in 2022.

2021 was a banner year for the 7th annual Spotify Wrapped which logged 120 million MAUs who engaged with Wrapped content (up 29% Y/Y) with strong Y/Y Q4 growth in engagement across all regions and demographics.

There were nearly 60 million social shares of Wrapped stories and cards in Q4 2021, triggering plays on two personalized playlists- Your Top Songs and Your Artists Revealed which were responsible for almost 8% of total on-platform consumption hours within 48 hours of launch.

MORE Spotify (NYSE: SPOT) falls 18% on Wednesday

More Q4 2022 Highlights

• Ad-Supported Revenue reached a record 15% of Total Revenue in Q4 and analysts see room for more ad growth
• Gross Margin finished at 26.5% in Q4, above the top end of Spotify’s guidance range.
• The streamer Announced the agreement to acquire Findaway and the acquisition of Whooshkaa in Q4.

Bruce Houghton is Founder and Editor of Hypebot and MusicThinkTank and serves as a Senior Advisor to Bandsintown which acquired both publications in 2019. He is the Founder and President of the Skyline Artists Agency and a professor for the Berklee College Of Music.