Daniel Ek looked relaxed. The CEO of Spotify was allowed to announce current economic data, which suits him much better than the annoying debate about his controversial star podcaster Joe Rogan. Especially since the numbers look good at first glance.
For the just completed fourth quarter of 2021, Ek was able to report 406 million active users of the streaming service. 18 percent more than in the previous year. The number of paying subscribers increased by 16 percent to 180 million. Average revenue per user in the subscription business climbed 3 percent to $4.97. Total revenue in this segment rose 22 percent to $2.6 billion, the Wall Street Journal (WSJ) reported.
Advertising revenue is also in the green. They jumped 40 percent to $445.5 million, about 15 percent of total earnings.
Spotify under a lot of pressure – no reliable forecast
Great record then? Is the boycott initiated by Neil Young, which has now also been joined by colleagues David Crosby and Graham Nash, “only” a political debate between old freaks? Not quite. Finally, Spotify’s share price, which had already fallen 44 percent in 2021 to $191.92, tumbled another 11 percent in after-hours trading.
Also because Ek announced that he would not be able to make a reliable forecast for the year. And this is where the debate about the expensively bought show “The Joe Roegan Experience” comes into play. Especially since a new joint statement by Young and Co is circulating, which is also joined by other artists, such as Nils Lofgren.
Daniel Ek described the issue at the exchange call as “complicated” and said that like all artists on the platform, Rogan has to adhere to the content guidelines. However, he cannot yet assess whether the controversy will have an impact on subscribers. The stock market does not like such uncertainties.
Spotify prefers to stay out of debates
The Spotify boss continues to shy away from a clear position: “We believe that we play an important role in the freedom of expression of authors. But we also need to strike a balance between that premise and the security needs of our users.”
So far, this “on the one hand and on the other hand” method has been implemented with the newly introduced warning and information notices for controversial shipments. A kind of digital variant of the “Parental Advisory – Explicit Lyrics” stickers on phonograms.
The streaming giant is sticking to its rocking course. See you next quarter.