Spotify stock jumped more than 7% during pre-market trading Tuesday, following the company’s announcement that it added a record 31 million premium subscribers last year.
The music streaming giant now boasts 236 million paid subscribers, according to its news released fourth quarter earnings report. That growth came even as the company raised prices to $10.99 a month in 2023. It was Spotify’s first price increase in 12 years. A monthly subscription to Spotify had previously cost $9.99.
The price increase, along with new subscribers and three rounds of layoffs in 2023, has helped the company narrow its losses.
Spotify’s operating loss plunged 66% in in the three months ended Dec. 31, to an loss of $81 million (75 million euros) from $248 million (231 million euros) in the same period the prior year.
The company’s revenue was up 16% year-over-year, to $3.9 billion (3.7 billion euros) in its fourth quarter, from $3.3 billon (3.1 billion euros).
Spotify’s shifting ad strategy
Joe Rogan secured a new multiyear deal with Spotify, announced last week. The new agreement would allow the popular podcast “The Joe Rogan Experience” to be distributed across various platforms including YouTube, Amazon, and Apple. That’s a change from the previous deal’s terms, which made the show exclusive to the music streaming service, and it could signal a new ad strategy for Spotify.
“While exclusivities were net positive on the side, it’s not driving as much as the opportunity that we see on the ad side,” Spotify CEO Daniel Ek said Tuesday on a call with investors. “By broadening distribution, we think we can accomplish a number of different goals. Most notable among them, we are going to be more aligned with the creator.”
Ad-supported revenue for the company was up 12% year-over-year in the fourth quarter to $538 million (501 million euros) from $482 million (449 million euros).