Spotify‘s total number of users climbed 27% to 345 million in the last three months of the year quarter, the music streaming service said Wednesday. Excluding people who listen free with advertising, Spotify’s paid members rose 24% to 155 million, the company said in its third-quarter results.
But the uncertainty of the COVID-19 pandemic made Spotify extremely cautious about growth this year, predicting barely any increase in paid subscribers in the current quarter and estimating its number of paying members at the end of 2021 would be far short of what analysts had been expecting.
By the close of the first quarter, for example, Spotify predicts it will reach only 155 million to 158 million premium paid members, essentially saying that growth in subscribers would either halt entirely or slow to a crawl in the first months of this year compared with how Spotify ended 2020. It predicted 354 million to 364 million monthly active users in the first quarter.
Spotify shares recently traded 8.5% lower at $315.61.
Still, the latest figures reiterate Spotify’s domination of subscription music around the world. Spotify appeared to remain above its No. 2 competitor, Apple Music. Apple doesn’t routinely disclose its paid membership and hasn’t offered an update in more than a year, obscuring just how much of a lead Spotify may have. Though Apple Music has surely grown significantly in the last 18 months, Apple last revealed its subscriber base at 60 million members way back in June 2019.
As the culture at large has shifted to streaming as the most common way people listen to tunes, Spotify and emerged as the leaders in a race to dominate subscription music. Though Spotify remains the biggest streaming service by both listeners and subscribers, Apple Music has benefited from the popularity of the iPhone to recruit new members.
Apple didn’t immediately respond to a request for comment on Apple Music’s growth.
Spotify added Wednesday that a full quarter of its monthly listeners are tuning into podcasts, up from 22% three months earlier. The company has been engrossed in a campaign to expand podcasts on its service, aiming to make Spotify the go-to place not only to stream tunes to also to hear talk-style programming too.
For the fourth quarter, Sweden-based Spotify reported a loss of 125 million euros ($150.6 million at current conversion rates), or 66 cents a share, narrowing from a loss of of 209 million euros, or 1.14 euros a share, a year earlier. Revenue rose 17% to 2.17 billion euros in the quarter.
Analysts on average had expected a loss of 55 cents in the latest period, on revenue of 2.15 billion euros, according to Thomson Reuters.