Swedish audio streaming giant Spotify is set to report its Q1 earnings on Wednesday (April 28). It in February said it could reach as much as 364 million and 158 million total monthly users and premium subscribers in Q1, respectively, up from 345 million and 155 million, respectively, in Q4.
Spotify has historically generated much more revenue from its premium subscribers, rather than ad sales, though the streamer has been particularly focused on boosting the latter in recent years. In Q4 2020, Spotify’s ad-supported revenue was up 29% year-over-year (YoY), marking accelerated growth when compared to the 24% YoY growth in the figure one year prior.
Indicative of Spotify’s quest for ad dollars is its aggressive push into the podcast space since early 2019, when it spent hundreds of millions on acquiring podcast companies Gimlet, Anchor and Parcast. Since early 2019, the company has also turned up the heat on exclusive podcast deals, with one of the highest-profile being the Joe Rogan pact.
Yes, podcasts help Spotify convert ad-supported users into premium subs, but podcasts are also looked to as an advertising revenue booster. Spotify cited podcasts as a reason for its strong ad revenue in Q4, for example.
Spotify now regularly gives updates on how many of its users engage with podcast content and often gives clues on how podcasts have contributed to revenue in the quarter. Keep an eye out for commentary from Spotify management on that, especially as Q1 captures some of the first months after the “The Joe Rogan Experience” (widely believed to be one of the biggest U.S. podcasts) became exclusive to Spotify.
This is part of a series of Variety Intelligence Platform’s Q1 2021 earnings previews for the biggest tech and media companies. For a complete list of the companies VIP has analyzed in advance of the Q1 earnings season, read our most recently published special report, “Q1 Preview: 2021 Financial Outlook for Key Media & Tech Companies.”