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Spotify is in a heated battle for new subscribers with Apple Music, which has been growing fast over the last few quarters. While Spotify still has more than double Apple Music’s global paid subscriber count (Apple Music was last counted to have about 40 million), recent reports have suggested Apple’s streaming service could be beating Spotify in terms of paid subscribers in the United States.
Spotify didn’t specify U.S. paid subscriber numbers, but it says that 31 percent of its total 180 million monthly active users are located in North America. This places around 56 million paid and free tier Spotify users across regions including the U.S., Canada, and Mexico. Spotify attributes its subscriber growth to strong performance and lower churn rate of its Family Plan, as well as partnerships like the Spotify + Hulu bundle.
While the company grew its revenue 26 percent year-over-year to €1.27 billion, it still isn’t making a profit and saw an operating loss of €91 million and net loss of €394 million this quarter. It’s believed that the company’s spending on marketing campaigns to stay ahead of Apple Music and the high royalty payments to record labels and artists continue to be a barrier to profitability for Spotify.
The company also pointed towards the new GDPR rules set in Europe this past May as a “disruptor” across its European markets during Q2. The rules were said to have slowed down subscriber growth where 37 percent of its total user base resides (its biggest region), but Spotify says it “seems to be largely past that now.”
Looking into Q3 2018, Spotify expects paid subscribers to rise to 85-88 million and total users to rise to 188-193 million.
