Spotify Records 16% Growth in Ad Revenue in Q3 2023
Spotify’s latest Q3 2023 earnings showed positive results for the music-streaming and podcasting giant: its total revenue grew to €3.4bn, with ad-supported revenue reaching €447m, increasing 16% year-on-year.
It marks Spotify’s first profitable quarter in more than a year – although a minuscule 1% increase – coming after its long-anticipated price hike, and a resurgence in the ad market.
The platform gained 23 million new listeners in the third quarter, bringing the total number of monthly active users to 574 million. Ad-supported MAUs grew 32%, reaching 361 million.
According to the company, there’s continued “improvement in podcast trends” as its podcast advertising revenue growth remained double-digit. Music advertising revenue – being the main ad revenue driver – also re-accelerated and increased nearly 20% year-on-year, due to growth in impressions sold and stable pricing, Spotify said
In its latest annual study Culture Next 2023: Top Gen Z Trends, Spotify’s first-party data showed that global users spent on average over 2.4 hours a day with the platform in Q3. Gen Z streamed over 1.5 billion minutes of music and recommendations globally using its AI-powered DJ in H1 2023.
UK Gen Zs in particular are using Spotify podcasts to educate themselves: the education category surged 61% over the last year and, in the first half of 2023 alone, Gen Zs in the UK generated 250 million podcast streams. Half of those users reported that podcasts “get them closer to the zeitgeist of culture than any other form of media,” while 76% of UK Gen Zs use podcasts to learn about topics “they wish they’d learned about in school”.
Younger consumers increasingly consume newer forms of media and switch between channels and platforms including audio and connected TV, and streaming and podcasts remain the most popular audio investment formats among advertisers.
In the latest investor call, Spotify announced its move into audiobooks and its “deepened partnership with Roku” to make video ads available in the Spotify app on Roku connected TV devices.
Credit: WARC