Spotify posted middling results for the fourth quarter of 2021 — a period that does not include the recent controversy over Neil Young and other musicians removing their music from the streaming giant, which is the world’s largest paid music-subscription service.
Premium subscribers grew to 180 million — up 8 million from the 172 million reported last year — and monthly average users grew 18% to 406 million, from 381 million.
However, ARPU (average revenue per user) grew just 3% year over year in the quarter, and just 1% on a constant currency basis. Ad-Supported revenue reached a record 15% of total revenue, according to the announcement, with gross margin at 26.5%.
Spotify’s market capitalization fell about $2.1 billion over a three-day span last week after Young pulled his songs from the audio-streaming giant. However, it quickly recovered on Monday — not after co-founder/CEO Daniel Ek announced on Sunday that the company would institute warnings and links to health information on podcasts that talked about Covid-19, but rather after Rogan himself posted a 10-minute video in which he agreed with Spotify’s new policies and would work to bring people on his show with broader perspectives.
Spotify stock closed Thursday at a 19-month low of $171.32/share, a day after the streamer removed Young’s music; it closed Wednesday (Feb. 2) at $191.92, down 5.75% for the day
Spotify’s stock price was already on the slide — having plummeted 25% year-to-date as of Jan. 25, the day before Young’s catalog was pulled off Spotify. Investors have been rattled by signals that Spotify’s growth may be slowing, particularly after Netflix’s warning of a significant cooldown in first quarter subscriber net adds (which precipitated a 24% drop in its share price).
A New York Times piece last July, titled “Joe Rogan Is Too Big to Cancel,” included this detail: “[A]mong top Spotify leadership, people familiar with the company say, the notion that Mr. Rogan presents any kind of regrettable executive headache is laughable.”
More to come…
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