How Profitable Is Spotify?

Even after an increase in subscription prices in core markets such as the U.S., the United Kingdom and France by one U.S. dollar, one pound and one euro, respectively, Spotify's subscriber growth has continued its upward trajectory. At the end of December, 236 million people worldwide had a premium subscription, ten million more than in the third quarter, which is on par with previous years. The company's profitability, however, took a dive compared to a promising Q3 2023, with a net loss attributable to shareholders of 75 million euros. Since the beginning of 2017, the streaming service has generated a positive net balance in eight quarters, two of them in 2021.

In Q4 of 2018 and Q3 of 2019, Spotify generated incomes of 442 million euros and 241 million euros, respectively, making these two periods the most successful in recent company history. Even the comparably big jump in paid subscribers from 144 million to 155 million between October 2020 and January 2021, with one likely cause being the ongoing pandemic and more restrictions over the winter months, didn't help the company turn a profit.

The streaming service's end goal, for the time being, is to reach one billion subscribers by 2030. Until now, Spotify has been growing by an average of 24 million subscribers per year since 2018. With huge markets like China unlikely to adopt the platform, TikTok most likely rolling out its streaming service to more markets in 2024 and the world economy likely not improving much any time soon due to ongoing crises, achieving this landmark number seems improbable at this point.