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Spotify Now Has 365 Million Users But A Covid And Email Error Cost The Company Millions Of Dollars

Spotify’s overall number of listeners increased 22% to 365 million in the second quarter, according to the worldwide music streaming service, a slower rate of growth than projected. Angela Lang/CNET
Spotify attributed the slowdown in total listener growth to COVID-19 impacts in some places, which have stifled people’s desire to listen to music on the go because they can’t go very far during lockdowns.
Spotify also failed to discover a problem with its system authenticating new signups using email addresses linked to an unnamed “global third-party platform,” which it blamed on a change it made on its end.
Spotify has addressed the problem, but not before it lost 1 million to 2 million new users as a result of the error.
COVID impacted Spotify’s ability to add as many new users, particularly in regions like India, where the disease was at its peak during the most recent time.
Spotify had already been cautious about growth this year due to the COVID-19 outbreak, and the recent figures have forced it to lower its total listener forecasts for the entire year.
It now intends to have between 400 million and 407 million monthly listeners by the end of the year.
It announced three months ago that by the end of the year, it hoped to have 402 million to 422 million active listeners.
On a call to discuss the results on Wednesday morning, Spotify cofounder and CEO Daniel Ek stated, “I look at it as a hiccup in the road.”
Yet, in the most recent quarter, Spotify’s paid members increased by 20% to 165 million, exceeding expectations.
Spotify makes more money from paying subscribers than from free listeners who are exposed to advertisements.
In mild premarket trade, Spotify shares fell 2.5% to $231.
Despite the decline in total listeners, the latest data confirm Spotify’s global supremacy in subscription music.
The corporation appeared to maintain its No. 1 position.
Apple Music is the number two competitor.
Apple doesn’t reveal its premium membership on a regular basis, and hasn’t provided an update in (checks watch) more than two years, so it’s unclear how big of a lead Spotify has.
Despite Apple Music’s membership base has undoubtedly risen since then, it hasn’t announced the number of its subscriber base since June 2019, when it was just 60 million, compared to Spotify’s 165 million.
Unlike Spotify, Apple does not offer a free tier that allows users to listen to music while being exposed to advertisements.
Apple has never revealed the number of monthly active users; practically everyone who uses Apple Music is a subscriber.
Apple did not react to a request for comment on Apple Music’s increase right away.
Spotify and Apple Music have emerged as the leaders in a contest to dominate subscription music as culture has turned to streaming as the most common method people listen to sounds.
Despite the fact that Spotify continues to be the most popular streaming service in terms of both listeners and subscribers, Apple Music has benefited from the popularity of the iPhone to attract new subscribers.
Read more: Spotify, the best-selling streaming music service, said Wednesday that while it didn’t get as many new subscribers as it had planned, those who did are listening to the service for longer periods of time, returning to levels seen before the flu pandemic.
The firm is still working on expanding podcasts on its platform, with the goal of making Spotify the go-to spot for not only listening to music but also hearing talk-style programming.
The percentage of podcasts in Spotify’s overall listening hours reached an all-time high in the second quarter.
Spotify, based in Sweden, posted a second-quarter loss of 20 million euros ($23.6 million at current exchange rates), or 19 cents per share, down from a loss of 356 million euros, or 1.91 euros per share, a year ago.
In the third quarter, revenue increased by 23% to 2.33 billion euros.
According to Refinitiv Eikon, analysts predicted a loss of 36 cents on revenue of 2.29 billion euros in the most recent quarter.

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