Despite three-month fallout, Spotify is on the rise – Wall Street Journal

I've subscribed to almost every digital entertainment platform during the pandemic. Netflix, Showmax, YouTube Music, Spotify and even Quibi – the startup aimed at creating quality, short-form video that you can watch on-the-go. Why, you ask? Well just in case I need to take a work-from-home break (I guess). Streaming platforms are reliant on habit, for example, listening to music on your morning run, or a podcast on the way to the office. But when the coronavirus pandemic hit, habit seemed a thing of the past and ad-based streaming platforms had to bear the brunt of it, with daily active user declines. But unlike Quibi, Spotify has made a comeback. Not only has it topped 138million subscribers, but the music platform has signed a licensing deal with Universal, which has seen a rise in stocks. So like Shady, Spotify is back, tell a friend. – Nadim Nyker.Spotify listenership recovers from pandemic woes, adds users.By Anne Steele.Spotify Technology said customers' overall time spent listening to the music-streaming service returned to pre-pandemic levels and its advertising business is showing signs of recovery as habits began to normalise in the second quarter after an initial upset brought on by Covid-19..___STEADY_PAYWALL___.The Stockholm-based company deepened its loss in the three-month period ended June 30, as its recent stock run-up came with higher-than-expected payroll taxes that offset strong user growth.The global health crisis began to drag on the business in the first quarter, with declines in daily active users and overall listening. However, by the end of June all regions had come back except for Latin America, where cases have risen sharply."The big news here is that there isn't really a lot of big news," said Chief Executive Daniel Ek in an interview. "We're lucky in that we have a business where there's been a macro tailwind toward digital business."Read also: How to make the best out of the BizNews Share Portfolio – a chat with Barry van ZylIn-car listening by the end of the quarter was less than 10% below pre-Covid-19 levels, an improvement from a 50% decline that had dragged through April. Meanwhile, Spotify has seen at-home listening on shared devices like smart speakers and smart TVs rise dramatically amid the pandemic."That had never been a forte for Spotify before, we were more of a mobile play," said Mr. Ek. "That trend has been strong for us."Finance chief Paul Vogel said the service added more users and subscribers in the first half of this year than the first half of last year."We feel really good about how we're performing," he said.At the end of the second quarter Spotify had 299 million monthly active users and 138 million paying subscribers, its most lucrative type of customer, with both coming in at the top of its guidance. Growth in North America was stronger than the company expected, more than making up for softness in Latin America and other emerging markets that registered upticks in subscriber cancellations and payment failures.During the quarter, average revenue per user for the subscription business slipped 9% to €4.41 ($5.17). The decline stemmed mostly from new subscribers coming in via discounted plans through family and student accounts as well as lower pricing power in new international markets.Spotify's revenue from subscriptions climbed 17% to €1.76 billion. Ad-supported revenue—which had been on a double-digit rise before the pandemic—slid 21% to €131 million. The company said ad sales slowed amid the pandemic but started to improve in June, and podcast advertising performed better than anticipated. Advertising is a relatively small part of Spotify's business, accounting for 10% or less of overall revenue, but has been a growth area over the past year, as the company has expanded its podcast business.The company said 21% of its monthly active users now listen to podcasts, up from 19% in the previous quarter, while overall consumption of podcasts more than doubled.In all for the period, Spotify posted a loss of €356 million, or €1.91 a share, versus a loss of €76 million, or 42 European cents a share, in the year-earlier quarter. A recent spate of deals has run the company's stock up more than 70% since the end of May, when comedian Joe Rogan's podcast was announced to be coming exclusively to Spotify. The deeper loss was owing to the taxes the company accrues on its employees in Sweden—accounting for more than one-third of its workforce—as determined by the stock price at the end of each quarter.During the quarter, the company also announced exclusive podcasting deals with Warner Bros.'s DC superhero brand and Kim Kardashian. The exclusivity, Mr. Ek said on an investor call, is a key component of Spotify's strategy, as it sees podcasts attract engaged listeners who also stream more music."What we're seeing here is the beginning of a flywheel. With every piece of content we're adding and successfully serving to users we're creating more engagement and that leads to lower churn," he said. "These users, when they find great shows, are sharing them on social media and creating this virtuous cycle."Last week, Spotify struck a new licensing agreement with Vivendi SA's Universal Music Group that signs the largest music company onto its "two-sided marketplace" for selling marketing and data back to labels.Also this month, Spotify launched in Russia and a dozen other European markets. Mr. Ek said the service had a bigger launch there than it had in India, where it added more than one million users in the first week.Free cash flow—a measure of the cash a company generates from operations and a gauge that many investors view as a proxy for performance—was €27 million, down from €50 million a year earlier.Revenue rose 13% to €1.89 billion, in line with guidance.For the current quarter, the company forecast monthly active users to grow to between 312 million and 317 million, and for premium subscribers to rise to between 140 million and 144 million. Revenue is expected to come in between €1.85 billion and €2.05 billion.Also listen: Magnus Heystek: The Sygnia fund I've invested in for ALL my grandchildren – PREMIUM Shopify's revenue nearly doubles as Covid-19 pushes shopping online Shopify Inc.'s SHOP 6.96% revenue nearly doubled in the latest quarter, as the company benefited from the e-commerce boom spurred by the Covid-19 pandemic.The Canadian company said it has seen more businesses signing up to use the company's e-commerce platforms during the pandemic. Revenue surged to $714.3 million in the second quarter, up from $362 million in the year-ago quarter and above the analysts' forecast of $511 million.Shopify, which was founded in 2004, is an e-commerce platform that sells businesses a variety of tools to make it easier to build, run and market their online stores. The company has benefited from consumers shopping online because of government-mandated lockdown measures that have forced businesses to close in-person retail.Shopify said the number of new stores created on its platform increased 71% in the second quarter compared with the first, driven by e-commerce shifts fueled by the pandemic and a promotional offering for a 90-day free-trial period. Shopify said it had a slightly lower rate of free-trial accounts converting to paid subscriptions during the 90-day free trial.Shares of Shopify rose 7% on Wednesday to $1,053.59, and are up 165% this year.The company swung to a profit of $36 million, or 29 cents a share, in the three months ended June 30, compared with a loss of $28.7 million, or 26 cents a share, in the year-ago period. Its adjusted profit was $1.05 a share; analysts polled by FactSet had expected per-share earnings of a penny.Gross merchandise volume increased 119% compared with last year's second quarter, although Shopify said the rate of growth, which was strongest in April and May, has decelerated since then.

Despite three-month fallout, Spotify is on the rise – Wall Street Journal

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