Lee Gyu-lee is a business writer at The Korea Times, focusing primarily on IT & telecommunications, the Ministry of Trade, Industry and Energy and KOTRA. Prior to this, she has covered a wide range of cultural news, from film, television and K-pop to lifestyle and fashion.
Spotify tops 700 mil. users after price hike, accelerates expansion in Korea
Spotify Asia-Pacific General Manager Gautam Talwar, right, and Lee Jae-hoo, head of the Naver App Service Division, pose after signing a strategic partnership agreement at Naver's headquarters in Gyeonggi Province, Tuesday. Courtesy of Spotify
By Lee Gyu-lee
Spotify secured a significant milestone this quarter, reaching a total of 700 million monthly active users (MAUs) even after raising subscription prices in key global markets.
The streaming company announced its third-quarter earnings on Tuesday (local time), sharing an 11 percent year-on-year increase in MAUs to 713 million. The service’s premium subscribers grew 12 percent from the previous year to 281 million.
The company reported quarterly revenue of 4.27 billion euros ($4.9 billion), a 7 percent rise from the same period last year, with operating profit reaching 582 million euros, reflecting a 43 percent surge. Its net income turned positive from the previous quarter’s loss, hitting 899 million euros.
The jump in users was driven both by the subscription fee increase and a successful global marketing push, with signups outpacing the company’s expectations.
The increased subscription fees have contributed to boosting its revenue. In August, Spotify raised its monthly premium subscription price from 10.99 euros ($12.63) to 11.99 euros across major markets, including Europe, Asia-Pacific, Africa and the Middle East.
The streaming service has been expanding its business, recently pinpointing video content and video podcasts as future growth areas. In just the third quarter, it rolled out 30 major feature updates, including artificial intelligence (AI)-powered content recommendations, playlist mixing tools and an in-app direct messaging service.
Last month, the company signed a deal to provide its video podcast content and other video features to Netflix.
Spotify has also been putting effort into expanding its presence in Korea's music streaming market.
Since launching an ad-supported free plan in October last year in Korea, the company has continued to see rapid growth, reaching 4.24 million MAUs in August with a 168 percent year-over-year increase.
It surpassed local competitors, such as Genie Music, Flo and Naver Vibe, solidifying its position as the third largest platform after YouTube Music and Melon.
The company also announced a strategic partnership with Naver on Tuesday to bring its music and podcast experience to users across Naver’s platforms.
Through the partnership, the two companies will work together to make Spotify’s extensive library of more than 100 million tracks and 7 million podcasts more convenient to access through Naver’s services.
“Since launching in Korea, Spotify has been focused on connecting fans with the music and creators they love through our world-class personalization and discovery features,” Gautam Talwar, Spotify Asia-Pacific general manager, said in a press release.
“Partnering with Naver, whose services are woven into the fabric of everyday digital life in Korea, enables us to bring those experiences even closer to listeners, helping them find the right music for every mood and moment.”