 "A screen displays the logo of Spotify. File image/ Reuters")
Spotify’s revenue rate is declining with the drop up to 6 per cent. The rapid songs to lighten mood along with cool podcasts are cooling off and losing pace this quarter. This marks the fifth consecutive slowdown of streaming music platforms.
The streaming platform recorded a 7 per cent growth rate, which is down sharply by 20 per cent from last year’s report. This reflects the fading impact of the music giant weakening the strategic advertising moves.
The reason for decline
The music streaming service is getting impacted, but what could be the exact reason for the decline and reduced pace?
The deceleration highlights steady user subscription gains to drive higher revenue. As the company diversified the platform which is beyond music, i.e. introduction of audiobooks and podcasts which dives it into a new venture for the growth of the company.
Spotify’s recent result puts a new spotlight on the challenges the company faces. Ad revenue is slowing and costs are climbing ladders, which is making it tough to grow quickly like before.
CEO Daniel Ek also acknowledged the music platform moved rapidly in developing subscribers and monthly active users.
Premium members rose
Despite a cut in the ad revenue, Spotify saw a rise in its premium members adding to the company’s futuristic growth.
The company is betting that by fixing its ad business, it can balance growth between subscription and ad-supported listeners and come out stronger on the other side.