Spotify Eyes Younger-Skewing Podcasts As CEO Gives Shout-Out To ‘Call Her Daddy’, Mum On Archewell; Q2 Subscribers Jump, Losses Widen

Jill Goldsmith
·3 min read
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Spotify had its best quarter ever for new additions but revenue fell short of expectations and the music streamer booked a wider loss on severance and other business charges for the three months ended in June.

Shares of the global platform, headquartered in Sweden, are down more than 12%. The latest financials follow news yesterday of price increases.

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CEO Daniel Ek and CFO Paul Vogel on a post-earnings call today the full impact of the hikes won’t be evident in numbers until the fourth quarter. The company is raising the price of its premium subscriptions, bringing the audio streaming service in line with top competitors. Individual subscriptions will be $10.99 a month, up from the $9.99 level where they started in 2011. Premium Duo will be $14.99 (up $2), while Premium Family will be $16.99 and Premium Student will be $5.99, both up a dollar. “We felt the timing was right,” said Ek today. “We have expanded content offering and enhanced user experience and [are seeing[ lower churn” than ever.

Spotify’s monthly active users (MAUs) surged 27% to 551 million. Net additions of 36 million were 21 million ahead of guidance and an all-time high for the company. Paid subscribers grew 17% to 220 million, with net adds of 10 million — 3 million ahead of guidance.

Revenue rose 11% year on year to €3.2 billion ($3.5 billion ). Spotify posted an operating loss of 247 million ($272 million) swelled by €135 million in one-time charges including severance and other write-downs. The company’s had several rounds of job cuts, most recently laying off about 200 in early June in an ongoing revamp of its podcast operations.

“We are in a different climate,” in that busness, said Ek. “Four years ago we had very little data to back up our decisions.”

“We had a chance to break in [and] overall it was the right bet to make.”

“Now, we have a lot more data and, not surprisingly, what we are finding is that some of these shows work really well and some don’t work well.” And some are good, “but we probably overpaid.” So “we’re retaining some deals, doubling down on others, and stepping out of other relationships that didn’t work out.”

Podcasting is ageing down, he said, citing the growth of video podcasts and “Internet-native” creators active elsewhere on social media like Instagram and YouTube, who are “uploading more longform content on Spotify with great success.”

“Much younger consumers are getting in,” said Ek, touting the engagement of younger women with Alex Cooper’s hugely popular podcast Call Her Daddy.

Ek wasn’t asked and didn’t comment on Spotify’s split with Prince Harry and Meghan Markle. The streamer and the Sussex’s company Archewell ended their three-year, $20 million deal inked in 2020 that produced the podcast Archetypes.

In June, Spotify inked a podcast deal with Daily Show former host Trevor Noah to launch later this year.

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