While there has been much discussion of Spotify’s financial situation, another important metric to pay attention to is actual listeners. Here Russ Crupnick of MusicWatch breaks down some of the numbers on Spotify’s market share.
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Guest post by Russ Crupnick of MusicWatch
Spotify’s financial results are widely available and carefully scrutinized. This is a different story. It’s a tale of Spotify’s listeners, at least those who living in the US, the most important global market for music. Here’s a few reasons why 2018 was a good year for Spotify:
Spotify Premium extended its share lead
There are several popular metrics for measuring market share. Audience and subscriber metrics are widely reported, and Spotify itself noted roughly 30 percent gains in monthly users and Premium subscribers. Here’s another metric that we like; share of music listening. This share reflects two factors: how many listeners a streaming service has, and how much they listen. On an overall basis YouTube has been the leader among music streaming services, thanks to its massive audience. But Spotify is gaining ground as its audience and aggregate listening hours grow. In the paid sector, Spotify Premium is distancing itself from its competitors. Apple Music and Amazon Prime Music have grown their base of subscribers, however, Spotify’s key advantage stems from the fact that their users spend far more time listening to music on the platform.
Considering only paid services, Spotify Premium has a healthy, and growing, lead over other subscription music services.
Spotify engagement continues to grow
Size matters. Nearly 90 percent of Spotify’s revenue traces to Premium subscribers. The “time spent listening” metric is a great leading indicator of a streaming service’s success. Users who spend the most time on a platform don’t churn out and are more likely to recommend the service to friends or family members. It becomes the platform of choice for music discovery, and a primary way that you share songs and playlists. Look at how Spotify’s listener hours are growing, and how they outpace competitors…
Spotify is the most beloved music streaming service
You would surmise that the service most successful in growing share and engagement would have the most passionate audience. You would be right. We asked users of various music streaming options how much they loved their service. Then we asked whether they would recommend that service, a concept used to calculate a “net promotor” score. Factors such as music discovery experiences, playlists and recommendations all drive affinity; and are all areas where Spotify excels.
Spotify listeners are increasingly listening to podcasts
Exactly half of Spotify listeners are podcast listeners. Despite criticism that Spotify overpaid for the acquisition of Gimlet, the purchase made sense. Gimlet bolsters an already thriving audience for Spotify. Spotify Premium subscribers are spending 6 hours per week listening to podcasts. Ninety percent of Spotify listeners were checking out podcasts on another platform. It makes sense to keep these listeners at home.
It was a good year to be Spotify; if these trends hold up 2019 may be even better.
Data source: except for Spotify subscriber numbers, all figures are sourced from MusicWatch audiocensus or Monitor reports released in 2018 or 2019.