On Monday, the streaming music service announced the milestone in its first-quarter earnings report. Spotify said it’s premium service grew 32% year-over-year, bolstered by partnerships with Hulu, Google (GOOGL) and Samsung. Spotify (SPOT) said it has 217 million monthly global users, a leap of 26% year-over-year. Part of the increase can be attributed to its newly launched Indian service, which quickly racked up 2 million users. Spotify admitted India’s growth has continued to outpace the company’s expectations.
The global leader in the sector, with double the number of subscribers of nearest rival Apple Music, Spotify has launched in places like India, the Middle East, and North Africa in recent months, seeking to fuel the next stage of its development as it continues to price aggressively in the developed world.
“Competition is just not a big factor for us, it’s really all about growth,” Spotify Chief Executive Officer Daniel Ek said on a conference call after the release of the quarterly results. Ek reiterated the company planned to “keep on growing at more than 30 percent per year,” referring to revenue and users.
“There had been a concern that Spotify’s forecast for strong subscriber net adds in (2019) would come at a cost to ARPU (Average Revenue Per User) as it relied more heavily on promotions and pushed into lower-ARPU regions such as India, but these results should go some way to easing those concerns,” Atlantic Equities analyst James Cordwell said.
Spotify has attracted users to its premium tier by offering a number of deals, including adding Hulu at no additional charge, offering free Google Home Mini speakers and giving new users in the United States a six-month trial with the purchase of a new Samsung Galaxy S10 phone.
The promotions are partly aimed at competing against Apple (AAPL), which unlike Spotify doesn’t offer a free tier. Apple CEO Tim Cook said the service had more than 50 million subscribers at the end of January — roughly half of what Spotify just announced. Apple could provide an update to its number of subscribers during its earnings report Tuesday.
Spotify predicts between 107 million to 110 million people will sign up for its paid tier by the end of 2019. In total, it expects to amass between 222 million to 228 million paid and free users by year-end.
