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Spotify slumped to a €302mn loss final quarter because the group racked up prices axing podcasts and reducing jobs, overshadowing the report variety of new customers signed up throughout the interval.
After investing closely in an formidable push into podcasts throughout the coronavirus pandemic, Spotify has retreated over the previous yr as traders have grown impatient with the technique.
The corporate revealed the price of the retreat on Tuesday, saying it had incurred €91mn of bills “associated to effectivity efforts” akin to actual property impairments and paying severance to workers it had fired.
The hit contributed to an total lack of €302mn within the three months to the top of June, greater than double the €125mn it misplaced in the identical interval final yr. The group’s revenues rose 11 per cent to €3.2bn from a yr in the past.
Spotify has cancelled various its unique podcast reveals over the previous yr, together with a number of true crime collection throughout the quarter, because it merged its Gimlet and Parcast studios.
Whereas Spotify’s backside line suffered throughout the quarter, the corporate added 10mn paying subscribers and 36mn customers total. Greater than half a billion individuals — 551mn customers — at the moment are signed up for Spotify worldwide.
The strong progress reveals that the subscriber slowdown revealed by Netflix, which sparked a bruising correction throughout US media shares, has not materialised at Spotify.
Shares in Spotify closed down greater than 14 per cent on Tuesday in New York.
It stays underneath stress from shareholders to curb prices. Activist investor ValueAct in February bought a stake in Spotify, arguing that prices on the music service had “exploded” because it constructed out its podcast enterprise.
Chief monetary officer Paul Vogel informed the Monetary Occasions earlier this yr that podcasts have been a “large drag on our enterprise in 2022” and that “when issues aren’t working, we can be faster to tug the plug”.
The group on Monday stated it was elevating costs within the US, UK and several other different nations. Within the US, a normal Spotify subscription will now value $11, up from $10 — the primary such improve since launching within the nation greater than a decade in the past. The transfer comes after rival Apple Music final yr raised the worth of its subscription to $11.
On its web site, Spotify defined the worth rise as a transfer to assist the corporate “preserve innovating in altering market situations”.