Aside from the fact that Spotify is still losing money
, there were plenty of positives to take away from the company’s first quarterly earnings report
this week. When focusing on operational instead of financial metrics, the music streaming company that went public via direct listing a month ago, makes a compelling case for itself.
First and foremost, Spotify’s subscriber base continues to grow. By the end of Q1 2018, the company had 170 million monthly active users, of which 75 million were premium subscribers. That translates to more than 4 in 10 Spotify users actually paying for the service, up from less than 3 in 2015. Even the launch of Apple Music
in June 2015, that many expected to be the beginning of the end for Spotify, doesn't seem to have slowed the service's growth down. “We don’t see any kind of meaningful impact of competition,” the company's CEO Daniel Ek said during this week's earnings call. “In fact, when we look at this, we don’t really think that this is a winner-takes-all market.”
Spotify is also doing a great job at keeping its subscribers on board. The company’s premium churn, i.e. the cancellation rate of its paying customers, declined from 7.7% in 2015 and 5.5% in 2017 to below 5% in the first three months of 2018, indicating a high degree of customer satisfaction.