Swedish company Spotify announced Wednesday in its quarterly figures that 456 million people listen to music or podcasts every month. That's 23 million more than in the previous quarter. But despite the growing number of users, the music streaming service ended the third quarter with a loss.
The loss is due to rising marketing expenses and investments in podcasts and audiobooks. The company is also suffering from reluctance by advertisers to buy advertising time on Spotify.
456 million people used Spotify monthly In July, August, and September. That's a fifth more than the previous year. As a result, the company's revenue grew 22 percent to 2.6 billion euros. The streaming service was also helped in this regard by favorable currency effects.
The operating result, i.e. before taxes and interest payments, was a minus of 228 million euros. A year earlier, the company still made an operating profit of 75 million euros.
The streaming service is spending heavily to attract listeners to the fast-growing podcast market. The platform also aims to become a major provider of audiobooks. To build on those relatively new activities, the company is making a lot of additional investments.
Consequently, its operating costs rose 65 percent in one year. In addition to the non-music-related activities, a lot of money goes into marketing in the countries where the company is becoming active.
Spotify considers raising prices
Spotify can partially offset those cost increases with a price increase for subscribers in the US. The company is reportedly considering such a move now that competitors Apple and YouTube have done so recently, reports the news site Deadline.
"If our competitors raise their prices, that's good for us," founder and CEO Daniel Ek said in response to the quarterly results. According to Ek, previous price increases in other markets have hardly led to subscriber losses at Spotify.