Music streaming platform Spotify on Tuesday announced its premium subscribers base has touched 205 million, representing a 14 percent increase year-on-year. This makes Spotify the world’s first music streaming company to achieve such a large user base.
Its monthly active users (MAUs) reached 489 million, a 20 percent increase (YoY), according to the company’s Q4 2022 earnings report.
Spotify was founded in 2006 in Stockholm, Sweden, by Daniel Ek and Martin Lorentzon. The two wanted to create a legal digital music platform to respond to the growing challenge of online music piracy in the early 2000s.
It operates on a freemium model. Free Spotify access comes with lower sound quality, and advertisements and requires an internet connection. Those who pay for Spotify Premium can listen uninterrupted to high-quality recordings and are able to download songs for offline listening. The total number of monthly users, including subscribers using the free version, totaled 489 million at the end of the year and should hit the 500 million mark in 2023.
It has regularly posted annual losses, despite strong subscriber growth and has had a headstart on its rivals such as Apple Music and Amazon Music. The company last week announced to slash 6 percent of its workforce, or about 600 staffers, globally, and Ek announced that he was too ambitious in investing ahead of their revenue growth.