Spotify Subscriptions Grew Parallel to Netflix Leading to IPO

On April 3, Spotify opened its initial public offering on the stock exchange valuing the company at $26.5B when the markets closed that day. Speculation about the future of music streaming drove some to question whether Spotify would follow in the footsteps of other streaming services like Pandora, or follow the success of video-on-demand service Netflix - or ultimately fail.

To get a sense of how Spotify growth has compared to Netflix, as well as to other music-on-demand services like Pandora, Edison Trends examined the amount of new paid subscriptions per week across each company.

Figure 1: How does the amount of Spotify subscriptions per week compare to those at Netflix?
 

Figure 1: Data shows the estimated relative number of new paid subscriptions signed up per week specific to merchants Netflix and Spotify between July 31, 2017 to April 1, 2018, based on the Edison Trends dataset.

As shown in Figure 1, while Spotify subscriptions picked up in November and December, they saw a sharp decline in the New Year. Netflix maintained a lead on adopting more new subscribers than Spotify consistently throughout the past eight months, and the trend lines of subscriber growth compare similarly between the two companies.

Figure 2: How does the amount of Spotify subscriptions per week compare to those at Pandora?
 

Figure 2: Data shows the estimated relative number of new paid subscriptions signed up per week specific to merchants Spotify and Pandora between July 31, 2017 to April 1, 2018, based on the Edison Trends dataset.

Figure 2 demonstrates that in the last week of December, Spotify saw sign ups for new paid subscriptions peak and the company retained a steady rate of accruing new subscribers that led over Pandora consistently in the past eight months. Even on Pandora's highest week, Spotify had almost twice the number of new subscribers.

In the timeframe of August 2017 and April 2018, new paid subscriptions peaked for Pandora in the second week of March. The rate of accruing new subscriptions has since started to trend down.

The data shown is based on a sample of anonymized and aggregated e-receipts from more than 2.9 million users in the United States. To learn more about what Edison Trends can do for your business contact us at bizdev@edison.tech.

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