STOCKHOLM, July 27 — The world’s most popular streaming service Spotify today recorded wider losses on rising costs even though subscriber numbers beat expectations in the second quarter.
Between April and June, the Swedish giant suffered a net loss of €125 million (RM562 million), compared to €20 million in the second quarter of 2021.
In the same period, the number of paying subscribers rose by 14 per cent to 188 million out of a total of 433 million including non-paying users.
The 19 per cent increase in overall users is the largest ever in the second quarter, the company said.
Analysts had expected a loss of €127 million and a rise in paying subscribers to 187 million, Bloomberg reported.
The rise in paying subscribers confounded concerns that the rising cost of living would push consumers to cut back on non-essential spending such as entertainment.
Spotify’s operating losses hit 194 million in the second quarter, compared with operating profits of €12 million a year earlier.
Spotify blamed the losses on higher staff costs after expanding its team and new acquisitions as it widens its reach into the world of podcasts.
Spotify raised hackles earlier this year with a US$100 million multi-year deal with controversial star podcaster Joe Rogan.
At the end of the second quarter, Spotify listed 4.4 million podcasts on its platform, a rise of 400,000 from the end of March.
The number of users that engaged with podcasts grew in the “substantial double-digits” year-on-year and “per user podcast consumption rates continued to rise”, it said.
Spotify expects operating losses of €218 million in the third quarter due to unfavourable exchange rates.
The euro has slumped against the dollar in recent months, triggered by the war in Ukraine and the mounting risks to the European Union’s economy, as well as a relatively slow increase of interest rates by the ECB.
Spotify shares rose 16 per cent in morning trading on the New York Stock Exchange. — AFP
