Spotify Revenue and Usage Statistics (2021)

Spotify is the world’s biggest music streaming platform by number of subscribers. Users of the service simply need to register to have access to one of the biggest-ever collections of music in history, plus podcasts, and other audio content.

It operates on a freemium model. Free Spotify access comes with lower sound quality, and advertisements, and requires an internet connection. Those who pay for Spotify Premium can listen uninterrupted to high-quality recordings, and are able to download songs to any device on which they have the Spotify app.

Spotify was founded in 2006 in Stockholm, Sweden, by Daniel Ek and Martin Lorentzon. The two wanted to create a legal digital music platform to respond to growing challenge of online music piracy in the early 2000s.

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Eventually convincing record labels to agree to share content in return for an aggregate 20% stake, Spotify was launched in 2008. It was an instant success, with a Facebook partnership helping it rise rapidly to prominence. Surviving the transition to mobile technology, Spotify went public in April 2018, with a market cap of $26.5 billion after the first day of trading.

It has drawn criticism from recording artists, who complain that it pays too little. Claims to democratize the music industry have also been questioned, with the world’s biggest four music labels responsible for 87% of content available on Spotify.

Unfair or not, with the days of physical music long behind us (with the exception of vinyl junkies), Spotify dominates the way we consume music in the 21^st century. It does not have the run of the market, however. Its rivals include Deezer, Pandora, and most ominously Apple Music, which is aggressively seeking to gain market share.

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Table of Contents

Spotify Overview and Key Statistics

Spotify User Statistics

Spotify Usage Statistics

Spotify Content Statistics

Spotify Revenue Statistics

Spotify Overview and Key Statistics

• 345 million Spotify users in Q4 2020, 155 million subscribers (Spotify)
• Spotify users by region Q4 2020: Europe, 121 million; North America, 83 million; Latin America, 76 million; rest of world, 66 million (Spotify)
• Spotify subscribers by region Q4 2020: Europe, 62 million; North America, 45 million; Latin America, 33 million; rest of world, 17 million (Spotify)
• Spotify market share estimated at 32-34% (Midia/Counterpoint)
• 55% of US Spotify users under age of 35 (Verto Analytics)
• Daily Spotify listening times varies from 99 minutes in Europe to 140 minutes in North America (GlobalWebIndex)
• 70 million songs on Spotify, with new songs added at a rate of 60,000/day (Spotify)
• Ed Sheeran’s “Shape of You” most played song on Spotify, with 2.7 billion plays as of February 2021 (ChartMasters)
• Drake the most streamed artist, with 36.2 billion lifetime plays (ChartMasters)
• Spotify 2020 revenue at €7.8 billion ($10.8 billion), with operating loss of $581 million ($696 million) (Spotify)

Key Spotify User Statistics

Source: Spotify

Source: Spotify

Source: Spotify

*June 2020 estimate, last official figure 60 million, June 2019

**January 2020

***October 2020, includes YouTube Premium

Source: Spotify/Statista/Reuters/Washington Post/SiriusXM

Source: Counterpoint

Source: Midia

Source: Verto Analytics

Source: ERA

Key Spotify Usage Statistics

Source: GlobalWebIndex

Source: Verto Analytics

Source: GlobalWebIndex

Key Spotify Content Statistics

Source: Spotify, Apple, Amazon, Tidal, Google, BBC, Deezer

*as of February 2021

Source: ChartMasters

*as of February 2021

Source: ChartMasters

Source: Spotify

*As of February 2021

Source: ChartMasters

Source: Midia

Key Spotify Revenue Statistics

Source: Spotify

Source: Spotify

Source: Spotify

*We’re faced with the challenge of how to account for shifting dollar-euro exchange rate. Spotify ARPU up to Q1 2020 is calculated at the April 2020 rate of $1.08 to the euro. Q2-Q4 2020 is calculated at the February 2020 rate of $1.21.

This effect means that from a global perspective Spotify ARPU seems to have climbed, though in real terms it has fallen.

Source: Spotify/Netflix

Source: Spotify

Source: Spotify

Source: Spotify

Source: Spotify

Source: Macrotrends

Other Key Spotify Statistics

• Spotify available in 171 markets (Spotify)
• Average hours spent listening to Spotify per month stands at 25 hours (Goodwater Capital) 
• 44% of users listen to Spotify on a daily basis (Goodwater Capital) 
• Spotify US penetration 23% among males and 20% among females (Statista)
• 55% of Spotify users aged 16-40 listened to more music due to the circumstances in 2020 (Spotify)
• 60,000 new songs added to Spotify each day as of 2021, equivalent to 22 million per year, up from 40,000 in 2019 (Spotify)
• Drake, WizKid and Kyla”s “One Dance” the first song to surpass 1 billion streams (MTV)
• The Weeknd most streamed artist as of February 2021, with 72.2 million monthly listeners (Spotify)
• Around a third of Spotify listening time is spent on Spotify-generated playlists, with another third going on user-generated playlists (Goodwater Capital) 
• 68% of users Spotify users aged 16-40 discover new music through algorithms or online playlists (Spotify)
• 2.2 million podcasts available on Spotify (Spotify)
• 108% year-on-year increase in podcast listeners on Spotify reported September 2020 (Spotify)
• 140% year-on-year increase in listeners to news & politics podcasts, 81% in educational podcasts, and 201% in health (Spotify)
• “Today’s Top Hits” Spotify playlist is followed by 27 million people (March 2020) (Spotify)
• Other influential playlists include “Top 50 Global” (16 million followers), “RapCaviar” (14 million) and “¡Viva Latino!” (11 million) (March 2020) (Spotify)
• Average users listen to 41 unique artists per week (Spotify)
• Increases in Spotify listeners using indoor devices over 2020, 28% desktop, 61% through speakers, and 55% on games consoles (Spotify)
• Estimates vary on how much a Spotify stream is worth to artist: from $0.006-0.0084 to as low as $0.00318/stream (The Verge/Soundcharts)
• Spotify claims that €21 billion paid out to rights holders since launch, as February 2021 (Spotify)
• Spotify raised $2.6 billion in funding before going public (CrunchBase)

Spotify User Statistics

There were 345 million monthly active users of Spotify according to the company’s Q4 2020 report. Of these, 155 million were Spotify Premium subscribers.

This is up from 320 monthly active Spotify users and 134 million Spotify Premium subscribers in Q3 2020. Year-on-year, it’s a 74 million increase in users (27%), and 31 million increase in subscribers (25%). This is a slight slowdown in percentage terms compared to previous years, though an increase in absolute terms.

The current percentage of subscribers out of total MAUs stands at 44%, a little down on the 46% seen in 2018, or 45% in early 2020.

For a bit of historical context Spotify subscribers as a percentage of MAU in Q4 2015 stood at 31%, in Q4 2016 at 39%, by Q4 2018 at 46%.

Spotify users, subscribers, millions

Data source: Spotify

Q4 2020 results were broadly in line with expectations. A slower rate of growth is expected in 2021, following pandemic-related growth in 2020. With no gigs or festivals, streaming is what remained, leading to petitions from musicians to increase pay outs during this period. Much is left to be desired from Spotify in this regard, on which more below.

Spotify anticipates user numbers to reach 407-427 million over the course of the year, with Premium subscriber numbers reaching 172-184 million.

Spotify growth in 2020 was tied to a podcast strategy, which is arguably still coming to fruition.

The below chart shows Spotify user growth from launch until 2018, marking the introduction of new features such as the family payment plan, and Uber integration (users can choose to play their own music when taking an Uber). We might note a sharp uptick in both users and subscribers around 2015.

The introduction of new playlist features is notable here – Spotify-curated playlists are responsible for a huge proportion of listens on the platform.  More on this in the Spotify Usage Statistics below.

Other more recent features we might consider after this point is the annual ‘Your Top Songs’, customised to each user based on their year’s listening. This comes along with ‘Spotify Wrapped’, which shows users their favourite genres, bands, total minutes listened etc. In 2019, this was combined with a decade roundup for the 2010s.

In 2019 more than 60 million users engaged with this feature, sharing content 40 million times and streaming 6.5 billion songs from the playlists.

We might also include the $500 million investment in original podcasts, which certainly may have served to bring in a different demographic of less-musical users. Spotify has following the lead set by Netflix and moved into original podcasts. These include Fausto, which has risen to become top podcast in Mexico.

In Q4 2019 this saw daily podcast recommendations being sent to users in key markets. In April 2020, Spotify launched editorially-curated playlists, to mirror its hugely influential music playlists.

In 2019, 16% of Spotify MAUs engaged with podcast content. In 2021, over 2.2 million titles available, with 108% increase in podcast listeners reported over 2020. News & politics (140%), education (81%), and health (201%) were genres that saw a surge in popularity over 2020, for reasons that are not difficult to guess at.

In 2020, Spotify introduced Spotify Kids in select markets – another potentially significant addition. An anticipated new feature called Spotify Tastebuds will facilitate social music discovery through users’ friends.

Spotify long-term user growth + features

Source: Goodwater Capital 

Spotify users and subscribers by region

Globally, Spotify is available in 171 markets.

Breaking it down by region, it seems there’s not a huge difference in the geographies of Spotify users and Spotify subscribers. Europe is the biggest market in both cases, followed by North America. We see a greater bias towards these two more affluent regions in terms of subscribers (40% European vs 35% of MAU and 29% North American vs 24% of MAU).

Spotify reports that the fastest growth is occurring in less-established ‘rest of world’ segment (which encompasses Asia). Indeed, Spotify picked up two million users in India within two months of its February 2019 launch there.

Compare growth in Spotify MAU in various regions we can see how growth in the rest of the world and Latin America has come to accelerate in recent years, while North American growth has been more steady, bar a surge in Q4 2019. This is unsurprising, given this is the most crowded market, with Apple Music and Pandora (North America only) encroaching on Spotify’s territory. Latin American growth has been sufficient for Spotify to have broken it out in recent years.

Europe, on the other hand, seems to grow in fits and starts, with strong growth in Spotify user numbers in Q4 2019 and 2020, after slower mid-year growth. Nonetheless, it’s position as Spotify’s key market looks assured for now, with users crossing the 100 million mark in early 2020.

We’ve calculated these figures using Spotify’s regional percentages versus total MAU, and rounded to the closest million.

Spotify user growth by region, 2016 – 2020, millions

Data source: Goodwater Capital and Spotify

In proportional terms. Europe’s proportion of total MAUs has fallen slightly, from close to 40% to 35%, in the period analysed.

This is more due to an increased share of Spotify MAUs in Latin America (increasing from 19% to 22%) and particularly the rest of the world (more than doubling from 7% to 19%).

North America’s share of Spotify MAUs has fallen to 24% from 35% from 2016 to 2020.

Spotify MAU growth by region, 2016 – 2019, proportional

Data source: Goodwater Capital and Spotify

While North American MAU growth may be slightly slower, it’s worth considering that when it comes to subscribers and related revenue generation, with 45 million subscribers (approximate) in Q4 2020. This compares to 62 million in Europe, 33 million in Latin America, and 17 million in the rest of the world (nb. These are rounded up/down figures, to the nearest million).

In proportional terms, these Spotify stats have remained consistent over the two years covered, bar a 1% gain from the rest of the world from North America in Q4 2018, and a 1% gain for the rest of the world in Q1 2020. Otherwise Spotify subscriber growth has been proportionally even.

Spotify subscriber growth by region, 2018 – 2020, millions

Data source: Spotify

Spotify vs. other music streaming services

Spotify is a global enterprise. In 2018, it launched across 13 countries in the Middle East and North Africa, and in 2019, launched in India. Spotify reported that Mexico City played host to the biggest concentration of Spotify users (after launching in 2013), though without specifying just how many. It expanded into 80 new markets in 2021.

It’s 155 million paying users in considerably in excess of any Spotify competitor, with Apple Music’s 72 million the closest.

These figures are the best/most recent estimates we have. We’ve excluded platforms for which recent data is unavailable. The Apple figure is estimate, building on the official 60 million figure from June 2019. The Amazon figure comes from January 2020. The YouTube figure is from October 2020, and includes YouTube Premium subscribers.

Spotify users vs key rivals, millions

Data source: Spotify/Statista/Reuters/Washington Post/SiriusXM

Casting our eye back a little, we can compare Spotify user growth with Apple Music, its biggest rival.

Spotify logged 108 million subscribers to Apple Music’s 60 million, as of June 2019 (the latest figures are above).

As of April 2019, it was thought that Apple is growing at a slightly faster rate than Spotify (2.4-2.8% compared to 2-2.3% respectively).

Spotify vs. Apple Music global subscribers, 2015 – 2019

Source: Statista

Stats from Counterpoint dating to Q2 2020 show Spotify claiming a 34% market share, leading Apple Music (21%) and Amazon Music (15%). Tencent music streaming apps log an impressive 12%, despite its heavy domestic focus, while YouTube clocks 5%. The last figure is also impressive given the service is primarily associated with free, ad-supported content. Getting people to pay for such services is a noted hurdle.

These stats show a gradual erosion on Spotify’s dominance. The stats would give us a global market of 406 million music streaming subscriptions, allowing for overlap between platforms (though they are judged to be increasingly homogenous).

Spotify market share vs key rivals, Q2 2020

Data source: Counterpoint

Another analysis from Midia Research gives Spotify a 32% market share of a global market of 400 million.

Apple on 18%, comes in second, followed by Amazon on 14%, and China-specific Tencent Music on 11%. Various other smaller services feature, including Deezer on 2% and US-specific Pandora on 1%. YouTube claims a 6% share, having been folded into ‘others’ in previous editions.

Deezer and Pandora have lost market share by this estimation, while Amazon has gained slightly. Tencent Music seems to be the biggest winner, increasing its share from 8 to 11% since 2018.

According to these Spotify stats, while the Swedish company leads the way in revenue terms, Apple is brining in more revenue proportionally. We might put this down to Apple’s relative strength in the lucrative US market, compared to Spotify’s more diverse userbase.

Spotify market share vs key rivals, Q1 2020

Data source: Midia

Of course, preferring one platform over another does not mean you are solely dedicated to it – especially when certain services are offered free for users, or others might have exclusive access to certain popular artists.

In H2, GlobalWebIndex carried out an analysis of cross-platform listening, which among other things finds the as-yet unmentioned Google Play Music the most popular service. Alphabet’s service, alongside Spotify, counted on the most loyal bases.

Clearly users could find everything they wanted on these services. These two services are also the most popular with users of other apps. Interestingly, 44% of Apple Music listeners also used Spotify, alongside 32% of Amazon Music listeners and a huge 55% of Deezer users.

In the case of Spotify, by far the biggest crossover was with Google Play Music, which 40% of Spotify users also used. Flipping it around, 32% of Google Play Music users used Spotify.

We might note both services offer ad-supported free options, which no doubt went some way to facilitating this crossover.

(columns represent users of single app, so 28% of Apple Music users use Amazon Music)

Cross-platform streaming

Source: GlobalWebIndex

In the US, Spotify was overtaken by Apple Music as the biggest subscriber music service in July 2018. Both services reported around 20 million subscribers at the time. In April 2019, Apple was reported to have pulled further ahead, with 28 million US subscribers to Spotify’s 26 million. eMarketer estimated  Apple Music reached 33.7 million users in 2019 (year end).

Returning to the US, eMarketer reports that Spotify overtook domestic service Pandora in 2017, with 65.4 million Spotify users (rather than subscribers) to Pandora’s 63.1 million. The two services’ userbases are then predicted to travel in divergent directions, with Spotify continuing to add users while Pandora loses them.

Interestingly, a surge in US Spotify users is forecast towards the end of the forecast period in 2023. The stronger growth for Spotify has been ascribed to factors including smart speaker integration as well as the podcast strategy, mentioned above.

Amazon is the next biggest service in the US, counting 38.7 million users in 2019. Amazon’s growth of 27% in 2019 actually outstrips Spotify’s 25.8%, though as with all Amazon services, Amazon Music comes bundled with various Prime offers. Beyond this, various subscription levels are offered, as well as an ad-supported free service, and it is of course completely integrated with Amazon Echo speakers. eMarketer predicts US Amazon Music listeners will increase to 43.3 million over 2020

Apple Music grew 18.5% over 2018 to reach 33.7 million. It is predicted it will grow to 37.1 million over 2020. This may be a slower rate of growth, though Apple’s service is subscriber only.

US Spotify users vs Pandora, 2017 – 2023

Source: eMarketer

According to Verto Analytics/Statista stats, Spotify was the fifth most popular mobile music and video app by reach in the US, as of September 2019, on 23.7%. This puts it just a shade behind Apple Music, which enjoys reach of 23.8%. Pandora is slightly behind on 16.9%, while Google Play Music on 11.7% and Amazon Music on 8.8% are further back still. This list also features iHeartRadio, which on 13.9% actually enjoys deeper penetration than the offerings from Amazon and Google.

No music streaming app can compete with YouTube’s reach of 87.7%. While the video streaming app is not dedicated to music, music accounts for a significant share of YouTube viewing, particularly in the upper echelons of the most-viewed videos. Netflix, on 24.9%, is also marginally ahead in penetration terms.

US music apps reach, September 2019, percentage mobile users

Data source: Verto Analytics/Statista

Spotify users by age

The most recent data related to Spotify user age demographics we could find as of March 2021 dates back to March 2018. We find the largest concentration of users in the 25-34 age bracket (29%), followed by those aged 18-24 (26%).

We see, as with so many apps, that younger demographics dominate. The 25-34 age bracket edges out the 18-24 in this case, perhaps reflecting the more universal nature of music across age groups. This sees a less pronounced skew towards youth than we see with some apps. Interesting, the third-biggest age bracket is the over 55s. Perhaps retirement or increased leisure time is giving them more time to reacquaint themselves with the vast catalogue of music available on Spotify – if not discover something new.

Spotify has a more youthful user base than Apple Music or Pandora, with over half of users aged 34 or under, compared with 40% of Apple and 39% of Pandora users. Apple Music and Pandora seem to possess broadly similar user demographics in this analysis, while Spotify stands out for its younger listenership.

These stats show that Spotify is the most male-dominated platform, with 56% male users to 44% female. Apple music flips the percentages exactly, with as many female listeners as Spotify has male. Both come closer to parity than Pandora, for which close to six in 10 listeners were female.

US Spotify users by age and gender vs Apple Music and Pandora

Data source: Verto Analytics

Looking at a survey of US streaming service users dating to late 2017 , we can see that Spotify is the most-popular channel with under-30s, with only US-specific Pandora coming close. Notably, nearly twice as many under-30s used Spotify as used Apple Music in the three months prior to the survey – perhaps something to do with the free service.

Spotify also edges out every channel but Pandora and Amazon Music (only by 1% in the latter) in the over-30s category.

Spotify users: under-30s vs. over-30s

Source: Goodwater Capital 

In the UK, while we don’t have a specific age breakdown for Spotify, we have one for streaming users in general. Spotify is certainly the preeminent UK music streaming platform, so we can read this as broadly representative.

While the youngest two brackets, taking us up to age 34, account for a third (6 million) and a quarter apiece (4.5 million) of users respectively, the biggest growth has been seen among older users. In February 2020, when this snapshot was taken, 45-54-year-olds music streamers had grown 30% year-on-year, and those over 55 by 90%. Collectively, they added 1.7 million users to total UK streaming app users.

UK streaming app users by age, millions

Data source: ERA

Spotify users by gender

A different US analysis corroborates the Verto statistics above, showing that around 23% of male respondents, and 20% of female reported that they were members of Spotify as of March 2018.

US Spotify subscribers by gender

Source: Statista

Spotify vs radio

While physical media might be being outpaced by streaming, another industry that is increasingly finding its consumer base eroded by Spotify is commercial radio. Indeed, if we look to the UK, we can see that Spotify has a far greater reach than any commercial radio station.

Spotify vs radio reach UK

Source: the Drum

Spotify also overtook BBC Radio 1 in early 2017, making it the most-listened to radio station overall in the UK. Notably, a handful of prescient key staff members had jumped ship from the public station to Spotify in the years preceding the coming into being of this new paradigm.

Spotify Usage Statistics

Spotify data showed that between 2014 and 2017, the average listener increased the number of unique artists to whom they listened by 37% from 30 to 41 per week.

We don’t have an update on this figure, though Spotify did reveal in December 2019 that 60% of listeners discovered an artists from outside their home country in the past month. Leaving aside the fact that 40% of listeners are trained solely on domestic artists, this shows that listeners are diversifying their Spotify listening.

Number of artists to which average Spotify user listens

Source: Spotify

The 2017 increases in artists listened to seems to chime with an increase in the number of hours spent listening to Spotify, which increased 25% over the same period.

Average listening hours on Spotify

Source: Spotify

Spotify itself reports that ad-supported listeners listen to 2.5 hours per day on average (as of 2018). This is a high figure, though not inconceivable given music can be streamed in the background of other activities. We might presume Spotify Premium subscribers listen to more than this, having paid for the pleasure of ad-free, high-quality streaming.

Updates to these stats are hard to come by, though we do know that during the peak months of the coronavirus pandemic in 2020, 55% of Spotify users 16-40 increased their usage of the app.

In early 2016, it was widely reported that the average Spotify listened to 148 minutes of music per day. So more or less unchanged.

Regional figures from GlobalWebIndex dating from H2 2018 give us slightly lower totals, with no region quite reaching the 148 minute mark

Average daily Spotify listening time by region, minutes

Source: GlobalWebIndex

This is a high figure, though if we assume users put on music every day in the background, it’s not inconceivable.

Goodwater Capital give us a lower figure of 25 hours of content listened per month for the average Spotify user, in the last quarter of 2017.

This figure did seem to be on the up, with users listening to more and more music and other audio content on Spotify. This represents an increase of nearly a third since 2015.

Average content hours per Spotify MAU

Source: Goodwater Capital 

The same source indicates that 44% of these monthly-active users use Spotify on a daily basis.

US figures from Verto Analytics, dating to 2018, give us much lower average monthly listening time, of 2 hours 55 minutes. We can presume this refers to users of the free app as well as paying subs. At this point, Pandora was logging nearly twice as much listening time, while Apple lagged behind at under an hour.

Average monthly US Spotify listening time vs rivals

Data source: Verto Analytics

Spotify led the way in terms of monthly sessions, with an average of 61, compared to 43 Pandora sessions and 12 for Apple Music.

Average monthly US Spotify sessions vs rivals

Data source: Verto Analytics

Those Spotify sessions were far shorter, at 2 minutes 55 seconds on average (barely the length of a song, unless these listeners are Napalm Death fans), than its rivals. Pandora sessions were nearly 8 minutes, while Apple’s 3 minutes 27 seconds resembles a typical pop song.

Average US Spotify session length vs rivals

Data source: Verto Analytics

Spotify user satisfaction

Spotify is well out in front when it comes to user satisfaction.

A PC Mag survey (end of year 2019) gave Spotify a Net Promoter Score (NPS) of 66. Google Play Music, which it describes as nearly defunct, came in second with 60, and Pandora third on 55.

NPS measures how likely a customer is to recommend a product or service. Going back a few years to the last three quarters of 2017, Goodwater Capital published a wide ranging NPS scores of rival music streaming services. Spotify lead the way in each quarter, with scores in the region of 22-28 (being at a different time and with a different respondent base this is not comparable to PC Mag’s)

Apple Music, on the other hand, did not get a score higher than 5, while Google Play Music was in negative figures. Pandora’s 14-17 range puts it in second place, while Amazon trailed off shockingly after a decent Q2 score of 14.

Spotify user satisfaction

Source: Goodwater Capital 

Spotify’s lead was even stronger among users under the age of 30. The younger demographic consistently more generally gave higher scores across platforms, apart from Pandora, which seems to score very well with over-30s.

These scores are reflective of the far higher level of comfort with streaming among younger users. We might presume, however, that in the intervening years that older users may have grown more comfortable with streaming platforms such as Spotify, as they become a more familiar part of the music landscape.

Spotify user satisfaction by age

Source: Goodwater Capital 

Spotify devices

GlobalWebIndex Spotify stats from H2 2018 break down Spotify listening into mobile vs desktop per region, allowing overlap where users use both.

In each region, Spotify listening is dominated by mobile. The most pronounced example of this comes in the APAC region, in which 67% of Spotify listening happens on mobile devices, compared to 39% on desktops. In MEA and North America we see the highest preponderance of desktop Spotify listening, on 46%, with MEA also reporting the lowest mobile listening figure of 56% (compared to North America’s 61%).

Spotify devices by region, percentage of internet users

Data source: GlobalWebIndex

Spotify data from 2020 shows an increase in listening on indoor devices, for obvious reasons. This saw a 28% increase in desktop listening, 61% through speakers, and 55% in games consoles.

Breaking down streaming services by operating system gives some unsurprising results. iOS users are more likely to have used Apple Music, while Android users are more likely to have used Google Play Music.

Spotify, which seems to be (or have been in the last three quarters of 2017 by US users), is popular with users of both platforms, scoring behind only the native streaming services and Pandora in either instance.

We know in the intervening years that Spotify has come to supersede Pandora in terms of users, and that Google Music has faded to relative insignificance. Accordingly, Spotify may well have increased its scores in these metrics

iOS users steaming services used in three months preceding survey

Source: Goodwater Capital 

Android users steaming services used in three months preceding survey

Source: Goodwater Capital 

Spotify Content Statistics

Spotify currently lists over 70 million songs, as well as over 2.2 million podcast titles. Reportedly, 60,000 new songs are added to the platform every day – so that ‘over’ is doing a lot a legwork. That figure would equal to 22 million new songs per year.

This puts it level pegging Apple Music, Amazon Music, and Tidal. While this used to be a more competitive metric, it seems the biggest services offer the same range. Deezer claims to offer up a more precise 56 million (though this has been the case for some years), while YouTube Music is just ahead, on 60 million.

We don’t have up-to-date figures on Pandora, but it counted 40 million in 2017 – which was around the same level as Spotify and Apple Music at the time.

Reported number of songs on Spotify vs. rival platforms, millions

Data source: Spotify, Apple, Amazon, Tidal, Google, BBC, Deezer

Most streamed on Spotify

In May 2018, the Seeb remix of Mike Posner’s “I Took A Pill In Ibiza” became the 10^th song to surpass one billion streams of Spotify. The first was Drake, WizKid and Kyla”s “One Dance” in December 2016.

These were the first 10 songs to cross the 1 billion steams threshold:

• Drake – “One Dance (ft. WizKid and Kyla)”
• Ed Sheeran – “Shape of You”
• The Chainsmokers – “Closer (ft. Halsey)”
• Major Lazer – “Lean On (ft. DJ Snake and MØ)”
• Ed Sheeran – “Thinking Out Loud”
• Justin Bieber – “Sorry”
• Luis Fonsi and Daddy Yankee – “Despacito (ft. Justin Bieber)”
• Justin Bieber – “Love Yourself”
• The Chainsmokers – “Don’t Let Me Down (ft. Daya)”

Mike Posner – “I Took A Pill In Ibiza” (Seeb Remix)

It took eight years of Spotify for one track to reach 1 billion streams, and 10 years for 10 songs to reach this threshold.

Since then, however, songs seem to be flooding into this elite club. As of April 2020, 75 songs have been streamed more than a billion times on Spotify, showing a huge acceleration in songs reaching this point.

This could be ascribed to a number of factors, though we might speculate algorithmic and playlisting trends driving listeners to top tracks have something to do with it. Perhaps new users are more inclined to the popular music side of the spectrum, or we’re seeing an increase in businesses using Spotify for background music. Or maybe the last two years have just seen a profusion of some of the best and most-loved songs of all time. No doubt your preferred theory will be contingent at least somewhat on your age…

Most-listened artists on Spotify by year

Spotify most-played lists tend to be dominated by the same handful of artists. For many years the most-played artist of the year was an arms race between Drake and Ed Sheeran. The Canadian artist took the title three times to the Brit’s two.

The hegemony was finally broken in 2019, with Post Malone taking the honours, with 6.5 billion global streams. In second place, with over 6 billion streams, was Billie Eilish, with Ariana Grande in third. This was the first time any female artists have broken into even the top five.

Bad Bunny continued the trend in 2020, topping the list with 8.3 billion streams. Drake, J Balvin, Juice Wrld, and The Weeknd (the most-streamed artist of February 2021, with 72.2 million listeners, possibly due to a Super Bowl appearance) filled out the top-five, with Sheeran not making the cut this time around.

This finally edged out Drake’s record 8.2 billion streams in 2018 (and his 7.4 billion in 2016). His “God’s Plan” was the most-streamed song, and Scorpion the most-streamed album.

Post Malone was, however, second in 2018, followed by XXXTentacion (who died midway through the year), J Balvin, and Ed Sheeran, coming in a relatively (for him) poor fifth.

He finished the year in fourth place, with Post Malone and XXXTENTACION overtaking him. 2018 was a relatively poor year for Sheeran, who only managed to be the fifth most streamed artist.

Ariana Grande was the top female artist, followed by Dua Lipa, Cardi B, Taylor Swift, and Camila Cabello. No female artist made it into the overall top five.

Most-listened artists on Spotify by year

Source: ChartMasters

Most-listened albums and songs on Spotify by year

Bad Bunny’s YHLQMDLG was the most listened album of 2020 on Spotify, with 3.3 billion streams, folled by The Weeknd’s After Hours and Post Malone’s Hollywood’s Bleeding.

The Weeknd’s “Blinding Lights” was the most listened to song on Spotify, with 1.6 billion streams in 2020. Tones and I’s “Dance Monkey” and Roddy Rich’s “The Box” were second and third.

Billie Eilish’s WHEN WE ALL FALL ASLEEP, WHERE DO WE GO? was the most-listened album of 2019 – also a first for a female artist, with her “bad guy” the second-most streamed song. The number one in this case was “Señorita” by Camila Cabello and Shawn Mendes, with Post Malone and Swae Lee’s “Sunflower” in third. Post Malone’s Hollywood’s Bleeding was the second-most streamed album, with Ariana Grande’s thank u, next in third.

The hip-hop-focussed Joe Budden Podcast with Rory & Mal was the most-listened podcast in 2019, followed by the (self-explanatory) My Favourite Murder with Karen Kilgariff and Georgia Hardstark, and German comedy podcast Gemischtes Hack. Notably Budden signed a contract with Spotify in 2018, which sees the former rapper adhere to a twice-weekly schedule. Comedy was the overall most-listened podcast genre.

The Joe Rogan Experience was number one in 2020, followed by TED Talks Daily and The Daily from The New York Times. Society & Culture was the most-listened podcast genre.

The 2019 breakdown also revealed that the top song not released in the current decade was Queen’s “Bohemian Rhapsody”. Moving to new and emerging trends, we saw Modern Bollywood the breakout genre (reflecting the move into India), and Lil Nas X, Lizzo, and Lunay the breakout artists. BTS surpassed 5 billion streams over 2019, making them the first K-Pop band to do so.

Back in 2018, Imagine Dragons were the top group, followed by Korean boyband juggernaut BTS. German-language chatshow podcast Fest und Flauschig topped the podcast charts, while crime & mystery was podcast listeners’ favourite genre.

Spotify also reported that Toto’s “Africa” was the top ‘throwback’ song of 2018 – as anyone who has been anywhere near the internet in the past five year will be able to tell you.

All-time Spotify stats

2019 marked the last year of the second decade of the 21^st century, thus Spotify revealed some stats about markers for the decade.

The most-listened artist, unsurprisingly, was Drake, followed by Ed Sheeran.

Most listened artists 2010s

1. Drake
2. Ed Sheeran
3. Post Malone
4. Ariana Grande
5. Eminem

Ariana Grande is the only woman to make the top-five. The top five female artists of the 2010s also include such luminaries as Rihanna and Taylor Swift.

Most-listened to female artists 2010s

1. Ariana Grande
2. Rihanna
3. Taylor Swift
4. Sia
5. Beyoncé

(The Weeknd is the fifth-most listened male artist, in case you’re curious about that)

The most-streamed song of the decade was Ed Sheeran’s “Shape of You”. Sheeran’s “Thinking out Loud” also makes the list, in fifth.

Most-listened songs 2010s

1. “Shape of You”, Ed Sheeran
2. “One Dance”, Drake, Kyla, WizKid
3. “rockstar”, 21Savage, Post Malone
4. “Closer”, Halsey, The Chainsmokers
5. “Thinking out Loud”, Ed Sheeran

The 2010s roundup came only two years after Spotify marked its 10^th anniversary in 2018, which also saw some stats being realised on the most-played songs over the course of its first decade. Ed Sheeran’s “Shape of You” had already risen to the top, while Drake topped the overall most-streamed artist list.

Sheeran and Justin Bieber are the only artists to feature in the top-10 tracks twice, reflecting the very real dominance enjoyed on Spotify by a relatively limited number of artists. Looking back over the decade, other tracks to be the biggest of the respective years were The Killers’ “Human” in 2008,

Aside from these two big hitters, this top 10 featured other notable titans of the music industry, including Rihanna (who along with Ariana Grande represent the only female artists on this list), Coldplay, and Kanye West.

In total, nearly 17 million years-worth of music was streamed over the first 10 years of Spotify

Top tracks first-10 years of Spotify

Source: Spotify

When it comes to the most-followed artists on Spotify, Sheeran again takes it, with 76 million followers (as of  February 2021) – which would qualify as one of the world’s most-populous countries, ahead of the UK or France. Ariana Grande has overtaken Drake to take second, with 58 million Spotify followers to his 53 million.

Most-followed artists on Spotify, millions of followers

Data source: ChartMasters

The top-10 most-streamed songs of all time, as of February 2021, unsurprisingly closely resembles the top songs of the 2010s.

The top-10 for all-time streams, we might note, contains three songs released in 2019, and three from 2018, with second place going to a track released in September 2017, which didn’t even feature in the top-10 in 2018.

Taking a step further back, the only song not released in the second-half of the 2010s is Ed Sheeran’s “Thinking Out Loud”, which only dates as far back as 2014. There is, undeniably then, a newness bias in the songs that get streamed the most, though at the time of writing (Feb 2021) 2020 has not yet produced a megahit.

The most-played song by some distance, Sheeran’s “Shape of You” (72 billion streams, 600 million streams ahead of any other track, as of February 2021), was only released in January 2017. It was already the most-streamed song by the end of 2018…

Queen’s 1975 hit “Bohemian Rhapsody” is the 26^th most streamed song on Spotify. It is the sole representative of the 20^th century in the top 100. Indeed, it is only track to feature released prior to 2008. Going by these trends, we might expect the list in 10 years’ time to look very different to now…

In the top-10, we again see the aforementioned hegemony of a select few artists, with Ed Sheeran and Post Malone represented twice. Drake also features.

Justin Bieber and Post Malone are the most regularly-occurring artists in the top-100, represented no fewer than eight times each. Bieber, and Ed Sheeran (five) account for one in five tracks in the top 100 (one of these, “I Don’t Care” is a collaboration between Sheeran and Bieber).

Most-listened songs Spotify all-time, billions of streams

Data source: ChartMasters

Drake leads the way for all-time Spotify streams, on 36 billion, followed by Ed Sheeran on 28 billion, and Ariana Grande on 23 billion. Post Malone and Bad Bunny are not far behind on 23 and 22 billion each, while those of an older generation will be reassured (or quite possibly disappointed) to see Eminem has 22 billion. All stats as of February 2021.

70s-born Eminem is very much an exception. Six of these artists were born in the 90s, showing that popular music remains (perhaps as it should) a young people’s game.

Most-played artists of all time on Spotify, billions of streams

Data source: ChartMasters

Spotify as a soundtrack

Spotify listeners frequently turn to the streaming service to soundtrack special occasions.

The most-streamed song in a single day is “All I Want for Christmas is You” by Mariah Carey, which racked up 12 million streams on Christmas Eve 2019.

It’s not just the festive season that gets listeners looking for class soundtrack. The following graphic shows where and when Americans were listening to Bonnie Tyler’s karaoke favourite “Total Eclipse of the Heart” during the solar eclipse of August 2017. With peak listenership roughly following the “path of totality” – where the moon was blocking out the sun – we can certainly see that Spotify users have a sense of occasion.

Total Eclipse of the Heart plays during Eclipse

Source: Spotify

Viewers of the football/soccer World Cup 2018 also were found to soundtrack pivotal moments from the tournament with their sporting anthems.

According to Spotify data, streams of “Cielito Lindo”, an unofficial Mexican football anthem, increased by 1,854% after the national team’s historic victory over then defending champions Germany. While that figure may be staggering, streams of “Gangnam Style” went up by no less than 2190% after they also deposed the winners of 2014.

It’s not just bombastic songs tied in with national identity that spiked during the World Cup 2018. Streams of Queen’s “We are the Champions” increased by nearly 300% in Belgium after they knocked out joint favourites Brazil, leaving no room for doubt over the prevailing national sentiment at the time. On the other hand, when by then highly-feared Belgians were narrowly knocked out by France, the latter turned to disco hit “I Will Survive” – which spiked by 800%.

Anyone who spent any time at all in England during 2018 World Cup will be able to relate to the following graphic, that measures listens to national football anthem “Three Lions” over the day in which England defeated Colombia in a penalty shootout.

England vs. Colombia – Spotify streams of “Three Lions”

Source: Spotify

Spotify playlists

Playlists are the backbone of how content is consumed on Spotify. Over 4 billion playlists exist on the platform, according to Spotify itself.

Around a third of Spotify listening time is spent listening to Spotify-curated playlists. Slightly more than half of that amount goes on playlists personalised to each listener based on their listening history.

Just over another third goes on listening to user-generated playlists.

Percentage of time spent listening to Spotify playlists

Source: Goodwater Capital 

Inclusion on a Spotify playlist can make or break an artist’s career. A study conducted by the University of Minnesota and European Commission Joint Research Centre found that inclusion on Spotify’s “Today’s Top Hits” playlists, with around 27 million followers, increases streams by close to 20 million. In financial terms this is worth $116,000-$163,000 to an artist. Artists have even found themselves catapulted up the Billboard Hot 100 by virtue of inclusion on a playlist.

Inclusion on the “New Music Friday” playlist was also found to substantially increase the likelihood that a song would be successful – even for unknown artists. Artists, of course, are more than aware of this; accordingly, Spotify’s vice president of content reports receiving thousands of emails a day from artists looking to be included on one of Spotify’s influential playlists – indeed, artists have even began to email his children asking them to petition their father to include them on one of these playlists. The Top 50 Global, which tracks the effects of all this influence, is followed by 16 million listeners keen to stay on the pulse.

The aforementioned playlists are not the only ones for which artists are vying for inclusion. The “RapCaviar” playlist, for example, has been noted as being particularly influential. Formerly curated by ex-MTV Tuma Basa, the playlist has over 14 million followers, and has even spawned a series of arena tours headlines by members of the hip-hop aristocracy such as Migos and Chance the Rapper.

A little behind RapCaviar is “¡Viva Latino!” with 11 million followers, brings Latin American music to the world. It was, however, on “Baila Reggaeton”, with a little under 10 million followers, that you would have found a certain “Despacito” featuring on the very first day of its release, as well as J. Balvin’s huge hit “Mi Gente”.

The structure goes a lot deeper. Spotify has a “pyramid” of around 500 Latin playlists, through which songs usually must work their way before reaching the pinnacle of ¡Viva Latino!  

While it commands nowhere near the legion of followers of RapCaviar or ¡Viva Latino!, the “Hipster International” playlist, curated by Napster creator Sean Parker is credited with launching the career of Kiwi artist Lorde, who has gone on to become one of the world’s biggest musicians. The power of the Spotify playlist cannot be understated.

In 2017, Spotify was accused of peppering mood-based playlists with fake artists, that had hundreds of thousands of plays, yet seemingly no other presence. A strong denial was issued, with an investigation by The Verge reporting that the music was largely composed by small artists working under aliases, many working for small labels that collaborate with Spotify.

Spotify playlists: content vs. context

Marrying the two above discussions, Spotify is known to create playlists based on both content and context. So, while many playlists are based around a certain genre or period of music, others are curated to fit in with events, activities, or other contexts that might call for a curated playlist of music.

An analysis by Chartmetric of Spotify’s “Genres and Moods” category of playlists (thus including both types of playlist) shows that in terms of sheer volume, we find a greater number of followers for content rather than context-based playlists. Perhaps this is logical, as music listeners perhaps find these playlists easier to navigate based on their tastes. It is in this category that we find the big-name Spotify playlists mentioned above, as well as a whole host of smaller niche lists.

Content vs. context playlists on Spotify

Source: Chartmetric

If we look at them in terms of followers, however, we can see that context-based playlists seem to boast a far higher median follower count. Interestingly, though, both are outstripped by hybrid playlists, which are considered to take a little from each category (think “Latin Dance Cardio” or “Dance Party”).

Followers of content and context playlists on Spotify

Source: Charmetric

This is also borne out if we look at these playlists in terms of growth. Hybrid Spotify playlists outstrip content and context-based playlists in terms of both median and mean average growth. Taking them out of the equation, we see that content-based Spotify playlists boast a higher median follower gain, but a lower mean follower gain than context-based Spotify playlists. This reveals, then, that a concentration of highly-followed context playlists account for a significant share of followers. Followers of content-based playlists are more evenly spread out across the sample.

Content and context playlists on Spotify: Follower gain

Source: Charmetric

The Spotify algorithm

One of Spotify’s most-loved features is the user-specific playlists generated at first weekly and now daily for each listener, based on their listening history. The Spotify algorithm serves users tracks based on their crossover with other listeners’ histories, natural language processing (scouring the internet to look at terms associated with any given track or artist), and raw audio models, which are analysed using “convolutional neural networks”. Reportedly 68% of Spotify users aged 16-40 discover music through the algorithm or playlists.

It’s complex and mysterious in its specific workings, but users are known to comment on the sometimes-disarming accuracy with which the Spotify algorithm, can identify new tracks and artists that any given user will love.

Below is an example of a “taste profile” of Quartz writer Adam Pasick, and an illustrative map showing how these focus areas are generated.

Spotify taste profile

Source: Quartz

Spotify taste profile map

Source: Quartz

An AI system called BaRT is in charge of regulating the Spotify homepage, serving users a mixtures of customised playlists and suggestions based on their listening histories. This is very much the nexus of user engagement for Spotify.

Curated playlists and suggestions are based on users’ listening histories. 30 seconds is deemed to be the cut off point to determine whether or not a user is enjoying a suggested track.

Mainstream and alternative listening on Spotify

Ajay Kalia, Spotify’s product owner for taste profiles conducted research in 2015 on how listeners’ tastes change as they age. He found that between the ages of 14 and 35, our taste slowly moves away from the mainstream (that is artists who are more popular). After this point, it tends to stay fixed at a certain point, with a slight dip back towards more popular songs perceived at around 42.

Spotify taste by age

Source: Skynet and Ebert

If we separate the results into male and female listeners, we see that female listeners tend to remain closer to the mainstream overall, and hit peak divergence a little older – at 42, with a few more lurches in and out. Male listeners, on the other hand, seem to stick at around the same level from their early 30s, perhaps indicative of more entrenched listening habits.

Spotify taste by age and gender

Source: Skynet and Ebert

Kalia also found that those who are parents tend to diverge further from the mainstream, and continue to move further and further away from popular artists as they get older. Perhaps to ensure that their children will never find them cool…

Spotify Revenue Statistics

In Q4 2020, Spotify revenue stood at €2.2 billion ($2.6 billion, March 2021 exchange rates used except where specified), €1.9 billion ($2.3 billion) of this coming from Premium subscriptions. This represents a small increase on the €2.0 billion reported in Q4 2018, and a 17% increase year-on-year.

Slowing growth in Spotify revenue has been identified as a cause for concern among investors, despite  consistent increases.

Spotify revenue by quarter, Q1 2016 – Q4 2020, EUR millions

Data source: Spotify

In 2020, Spotify revenue came to a total of €7.9 billion ($9.5 billion), an 18% increase.

Spotify 2019 revenue came to a total of €6.7 billion ($7.3 billion – exchange rates in this paragraph at April 2020 levels), with gross profit of €1.7 billion. This follows on from €5.3 billion ($5.9 billion) Spotify revenue in 2018, with gross profit standing at €1.4 billion ($1.6 billion), €4.1 billion ($4.6 billion) in 2017, with gross profit at €849 million ($953 million).

Spotify annual revenue, 2015 – 2020 EUR billions

Data source: Spotify

Spotify gross profit for this Q4 2020 stood at €575 million ($689 million), up 21% year-on-year, and 18% on Q3 2020.

Gross margin, at 26.5%, was slightly up year-on-year (from 25.6%), and quarter-on-quarter (24.8%).

Spotify gross profit by quarter, Q1 2017 – Q4 2020, EUR millions

Data source: Spotify

2020 saw Spotify gross profit cross the €2 billion mark ($2.4 billion) for the first time, though that the increase of €0.3 billion is the same as that registered in 2019 will be a concern for investors.

Spotify annual gross profit, 2015 – 2020 EUR billions

Data source: Spotify

Spotify’s model is not profitable, and barring an unexpected turn of events in 2021, this will remain the case.

In terms of operating margin, Spotify reported a deficit of €69 million ($83 million) in Q4 2020, and €293 million ($351 million) over the course of the year. This compares to €73 million ($88 million) over the whole of 2019

Spotify registered losses of €3.10 per share over the course of 2020, following from a €1.03 decline in 2019.

In November 2018, Spotify announce a plan to repurchase $1 billion of publicly-traded shares. Over the course of 2019, 3.7 million shares were repurchased for €422 million ($457 million), at an average cost of €131.81 ($142.77). This followed on from 0.7 million shares purchased in 2018 for €77 million ($83 million).

The repurchase initiative is set to continue until April 2021, though 2020 seems to have seen the initiative put on hold.

Spotify predicts that revenue will come in at €1.99-€2.19 billion over 2021, with total losses in the range of €28 to 78 million.

Spotify warns that these predictions are subject to a large degree of uncertainty.

Spotify’s net operating loss came to €581 million ($696 million) over 2020, compared to €186 million ($223 million) in 2019 and €78 million ($93 million) in 2018.

Spotify net operating loss by year, 2009 – 2020, EUR millions

Data source: Spotify

In terms of costs, in 2020 Spotify spent €837 million ($1 billion), on R&D, €1029 million ($1.2 billion) on sales & marketing, and €442 million ($530 million) on general & administrative.

Cost of revenue was €6 billion ($7.2 billion)

Spotify annual costs by area, EUR millions

Data source: Spotify

Spotify Premium vs. ads revenue

Of Spotify’s revenue in Q1 2020, €1.7 billion ($1.85 billion) came from Premium subscribers, while ad-supported users generated €148 million ($161 million) – showing just how reliant on the subscriptions Spotify’s business model is.

Notably the second figure represents a considerable decline on Q4 2018, in which ads brought in €217 million ($236 million) worth of revenue. We might be able to ascribe this to advertisers looking for airtime during the Christmas period, in which Spotify no doubt has come to serve as a solution to soundtracking festive parties.

Cutting the festive period out of the equation, we might note that Q3 2019 saw €170 million ($185 million) ad revenue for Spotify, down on €175 million ($190 million) the preceding quarter.

Spotify artists and labels payments

Spotify pays out around 52% of revenue to record labels, who would then pay their artists anywhere from 15% to 50% of that, depending on their status.

As of September 2018, however, Spotify offers a service to artists who want to directly upload music to Spotify. They would then receive 50% of the net revenue generated, cutting the label out of the equation.

In 2018, 85% of music streamed from Spotify belonged to four record labels: Sony, Universal, Warner, and Merlin (Merlin is actually a licensing agency for independent labels). In 2017 Spotify singed a deal to pay a minimum of $2 billion to two undisclosed labels (thought to be Universal and Merlin) in order to be able to negotiate better rates for itself.

Recent years have seen a marked increase in streaming of songs from indie labels and from artists self releasing. By 2020, the major label share of streaming had fallen to 69%, with Merlin indies accounting for a further 9%.

Indies not represented by Merlin had increased their share to 15%, and independent artists added a further 6%, taking the non major label share of streaming to 21%.

Spotify streams by label ownership by year, percentage overall streams

Data source: Midia

Spotify claims to have paid €21 billion ($25 billion) out to music rights holders over the course of its existence, as of February 2021.

Despite the size of this figure, Spotify has attracted a good deal of criticism over the years of its existence for the paltry sums paid out to artists.

Back in 2015, a Spotify stream was estimated to be worth about $0.006 to 0.0084 to an artist, meaning a million streams would translate as $7,000. Given most artists would struggle to make a living from such rates, it’s clear that Spotify’s model does not take artist income into account.

A more recent (2019) SoundCharts study looking at the average royalty payouts per stream reports that artists earn the considerably lower sum of $0.00318/stream on Spotify. This compares relatively poorly to royalties offered by its various competitors. Amazon are not always a company associated with generosity, but interestingly Amazon Music tops the list in terms of average payment per stream on $0.01196/stream. YouTube Premium delivers $0.00803, Apple offers $0.00563, and Google Play $0.00551. Pandora’s rate, on the other hand, is even lower than Spotify, at $0.00151.

Aside from Amazon, the highest figures are generated on a per stream basis by Napster ($0.00989) and Tidal ($0.00802).

After these stats were collated, Deezer changed its model to a user-centric payment system which sees artists get a fairer share of revenue.

We should also note that these figures are an approximation, with the reality of how payouts are calculated a little more complex, contingent on a number of variables.

Average payment per stream by platform

Source: SoundCharts

Radiohead’s Thom Yorke and Taylor Swift are among the artists who have criticised Spotify for this in the past. Swift went so far as to remove her music from the platform, though returned a few years later after her 1989 album surpassed 10 million sales. Yorke poetically called Spotify “the last desperate fart of a dying corpse”, and criticised its role as tastemaker, saying that it worked against smaller artists seeking a breakthrough.

Spotify claims to pay 70% of revenue back to the music industry, though it has been noted this applies chiefly to major label music, and not podcasts, for instance. It is estimated that three major labels make £19 million a day from streaming – a figure that will be of little reassurance to artists feeding on scraps of this. Back in 2017, Spotify had actually requested that labels reduce royalty rates in order to become financial stable. It also appealed against a decision from the US Copyright Royalty Board to award songwriters a 44% rate increase by 2022.

Artists petitioned Spotify to raise its royalty rates in March 2020, in the wake of the coronavirus pandemic, in order to help them survive. In the same month, however, Spotify had in fact asked for artists pay it money in exchange for on-platform promotion.

Those who view Spotify’s twin role as a distribution platform and tastemaker as something of a conflict of interest may find this news troubling.

Spotify label share value

In order to get Spotify off the ground initially, shares in the company were given to the aforementioned labels, plus EMI.

Labels’ initial shares in Spotify

Source: Music Business Worldwide

In April 2018, Sony sold half of its stock in Spotify, worth a 6% of the company, for $750 million, promising to pay out proceeds to artists. Warner was not far behind in selling $400 million of stock – around 75% of its total equity, making a similar promise to distribute the money to recording artists. It would later go on to sell the remaining 25%, bringing the total to $504 million.

Merlin sold its entire stock the same month for an undisclosed sum, thought to be between $130 and $150 million.

Spotify ARPU

Spotify ARPU has been declining – to the chagrin of some invested parties (namely: record labels). Rolling Stone reported in January 2019, that the average user was paying $5.50/month.

The article suggests that the prevailing trends would resulted in ARPU going below $5. This was borne out in early 2020, though fluctuating exchange rates mean that despite ARPU going as low as €4.26 in Q4 2020 (Q3’s €4.10 was even lower), we saw a ‘recovery’ to above $5 ($5.10 to be precise, at March 2021 rates).

Spotify ARPU, 2018 – 2020, EUR

Source: Spotify

Several factors are at play here. Student/family subscriptions, for example, see discounted rates being applied. Expansion into new territories is another – subscriptions are cheaper in places like Asia and Latin America, to reflect different levels of disposable income. And, of course, there are various offers and deals.

Following the lead of Goodwater Capital (see below) we’ve compared Spotify ARPU against that other mainstay of the streaming world, Netflix, from Q1 2018-Q4 2020. Netflix has a good deal more subscribers at this point (204 million to Spotify’s 155 million).

We can see from this graph that Netflix reports considerably higher ARPU than the music service – over twice as high, in fact. Netflix, of course, delivers a very different service, and is also in the business of content creation and distribution.

Both show small fluctuations in the period covered but there’s no real discernible major trend, beside slight divergence in 2019 as Netflix ARPU increased and Spotify ARPU decreased.

We’re faced with the problem of shifting exchange rates again, which make this is a difficult task. Take the below as guidance, not gospel.

We converted Spotify ARPU from euros into dollars at April 2020 exchange rates up to Q1 2020, around $1.09 to the euro.

From Q2 2020, we converted at February 2021 rates, which saw a stronger euro, at $1.20 to the euro. This serves to mask Spotify’s declining ARPU.

Notably this exchange rate is closer to that seen in early 2018, which naturally would have an effect on the figures.

Spotify vs. Netflix ARPU, 2018 – 2020, USD

Source: Spotify and Netflix

As we mentioned above, Goodwater Capital conducted the same exercise in 2018, looking back at the years 2013 and 2017

This tells a different story. Looking back to 2013, Spotify actually brought in more per user than Netflix. The intervening years, however, saw Spotify ARPU head steadily downward, while Netflix ARPU edged upward.

Of course, ARPU must be considered in context, and we might note that Netflix’s financials are not viewed as a bed of roses.

Spotify revenue per subscriber vs. Netflix

Source: Goodwater Capital 

Spotify revenue as share of global music industry revenue

It won’t be news to those who follow the music business that streaming has come to be the dominant medium through which music is consumed – overtaking physical records as a revenue source for the music industry in April 2018. Despite its pirate roots, streaming has become the engine room of revenue generated from recorded music.

The growth of the subscription model has seen consecutive years of revenue growth in the industry, which have seen revenue figures not too far off those we last saw when physical media was preeminent.

2019 marked the fifth consecutive year of revenue growth, according to the IFPI Global Music Report 2020. In total, industry revenue grew by 8.2%, reaching a total of $20.2 billion – higher than 2003 revenue. Coronavirus may put paid to this upward curve (unless it drives new users to streaming services in lieu of missed concerts), but it is to these strong figures the industry will hope to return.

In total, streaming accounted for 56.1% of music industry revenue – a total of $11.4 billion. Breaking this down, 42% was generated from 341 million subscriptions, with 14.1% coming from ad-supported streams. Total streaming revenue rose by 22.9%, with subscription revenue specifically rising by 24.1%.

IFPI figures do not break out figures by platform, but we can make our own calculations based on what we know. Spotify revenue came to $7.3 billion in 2019, which would give it a huge 64% share of total streaming revenue, from 36% of total subscriptions.

Spotify’s 2019 subscription revenue comes to €6.1 billion – or $6.61 billion. This would come to around 78% of total subscription revenue by this measure. Spotify 2019 ad revenue came to €678 million, or $735 million, accounting for 25%.

We should perhaps takes this figures as a guide rather than gospel, owing to the complications that tend to arise from comparing two different datasets from two different sources. It does seem to be far too high…

Perhaps the only safe assumption would be: Spotify is responsible for a good deal of global streaming revenue.

Streaming share of global music market revenue

Source: IFPI

Spotify market cap

Spotify went public in April 2018, listing on the New York Stock Exchange, opting for a direct listing instead of the standard IPO process. Prior to this, it has raised $2.6 billion in investments.

The opening price of Spotify shares was $165.90, up on the guide price of $132. The day closed with stock priced at a shade under $150, giving Spotify a valuation of $26.5 billion.

Spotify stock price has been fairly tumultuous since then, rising to a high of $192.38 in July 2018, but coming down fairly hard from late September onwards. This culminated in a low of $106.84 in December 2019. Prices have been broadly on the up since then, standing at $282.70 in March 2021. Like other streaming apps, a shut-in public works in Spotify’s favour (as much as a horrible pandemic can be said to be in anyone’s ‘favour’).

This gives us a Spotify market cap of nearly $53 billion, down on February’s peak of close to $70 billion.

Spotify market cap, 2018 – 2020

Source: Macrotrends

Final Thoughts

Spotify can be considered, along with Netflix, to be one of the key drivers of a sea change in the way we consume culture. Before, we would pay for each individual film or album (or even song), which would then be in our possession for as long as we took care of it.

That model would probably seem hopelessly antiquated to anyone coming of age in the third decade of the 21^st century. The access model – whereby we pay for unlimited access to as many different works as we can consume, so long as we keep paying our monthly rate – is now clearly the dominant form of consumption.

There is a question, though, which separates Netflix and Spotify. The film industry seems to be in rude health. And importantly, Netflix is investing in the creation of original content – giving something back to the art form through which it rose to prominence.

Music, on the other hand, is a form which has hugely suffered from the move away from physical media. Certainly, grandee artists can get by on the strength of arena performances, licensing, and lucrative deals with record labels – raking in a little bit extra from streaming. For emerging artists, however, Spotify represents a problematic shift in the way the business operates. These smaller artists cannot rely on ticket sales, and certainly cannot expect to make a living from streaming revenue.

That Spotify has tried to reduce the amount it pays out to labels in order to ensure its own survival and will reassure few artists. Labels are hardly a model of benevolence, but it is they who actually put money in artists’ pockets.

To this we can add the issue of Spotify operating as a tastemaker, given the huge listenership attracted by its playlists and the influence of its algorithms. The idea that something as highly-valued as pop music is in the hands of a global tech juggernaut concerned mostly with its own bottom line is problematic for aficionados as well as artists – particularly when it is also the main distribution channel.

How the music industry and Spotify learn to work together will be on the key things which observers will be watching in years to come. The other, of course, will be the rise of Apple Music as a key rival. Apple are not a company anyone would want as a competitor. It remains to be seen whether Spotify can maintain its healthy lead – particularly given its somewhat tempestuous experience as a publicly-listed company so far.

While we should never turn away from these issues, we should also note, however, that Spotify is also a dream-come-true for music fans. Listeners have access to nearly the entire mainstream Western canon of music (and much from beyond it) available at a few clicks, in high quality. For all but seekers of rare obscurities, there’s enough music on Spotify to comfortably last the rest of any given user’s life. This would have been totally unimaginable 20 years ago.

Let’s not also forget that Spotify saw off the challenge posed by illegal downloading to the music industry. While musicians have certainly been hurt, at least the current model at least acknowledges that we should pay to listen to music if we can. Even if it is nowhere near being enough, it is a start at the very least.

More Music & Audio App Data

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• Apple Music Revenue and Usage Statistics (2021)
• SoundCloud Revenue And Usage Statistics (2021)
• Pandora Music Revenue and Usage Statistics (2021)