Spotify On Target to Reach 678 Million MAUs and 265 Million Paying Subscribers: Implications for the Book Publishing Industry

A reminder that for Q1 2025, Spotify expects monthly active users to reach 678 million, with paid subscribers hitting 265 million.

Spotify reported its first full-year profit on Tuesday, with an additional 35 million monthly active users. The audio giant reached 675 million monthly active users in Q4, marking the largest increase in its history.

Paid subscribers grew by 11 percent year over year to 263 million, surpassing both the previous quarter's figure of 252 million and the company’s guidance.

CEO Daniel Ek attributed this growth to product enhancements in audiobooks and video, with over 330,000 video podcasts now available globally on the platform. These podcasts no longer feature ads for premium users, and the company has launched a new partner programme for creators.

Money Matters

Total revenue grew by 16 percent year over year to €4.2 billion, with operating income reaching a high of €477 million. For the full year, Spotify's operating income was €1.4 billion. Operating expenses declined by 16 percent in Q4.

Ad-supported revenue increased by 7 percent year over year, driven by growth in impressions sold, although pricing softness offset some gains. The Wrapped campaign delivered record-high user engagement, up 10 percent year over year across 184 markets and 53 languages.

For Q1 2025, Spotify expects monthly active users to reach 678 million, with paid subscribers hitting 265 million. Operating income is forecasted to reach €548 million.

On January 26, Spotify announced a new multiyear deal with Universal Music Group (dedicated TNPS report to come shortly). Shares of Spotify rose by 8.5 percent in premarket trade on Tuesday.

Implications for the Book Publishing Industry

Spotify's strong performance and growth in user engagement have significant implications for the book publishing industry, particularly for audiobooks within the Spotify Premium catalogue.

1. Increased Subscribers and Audiobook Consumption: With 263 million paid subscribers, there is a larger audience for audiobooks. As more users subscribe to Spotify Premium, they gain access to a vast collection of audiobooks, increasing the consumption of audiobooks and benefiting publishers who have their titles on the platform.
2. Boost in Podcasts Leading to Audiobooks: The growth in video podcasts and the new partner programme for creators will likely attract more content creators to Spotify. This can lead to a rise in podcast consumption, which in turn may drive interest in audiobooks, as listeners often seek more in-depth content related to the podcasts they enjoy. (Video podcasts are also a great way to promote audiobooks!)
3. Revenue Growth for Participating Publishers: The increase in Spotify's total revenue and operating income suggests a healthy financial state, allowing for potential investments in expanding the audiobook library. Publishers with audiobooks in Spotify's catalogue could see increased revenue from higher audiobook sales and streams on top of that already being reported (or in the case of the Society of Authors, ignored).
4. Enhanced Discoverability: Spotify's high user engagement and the success of campaigns like Wrapped mean that more users are actively exploring content on the platform. This enhanced discoverability can benefit audiobooks, as users are more likely to discover and listen to new titles.
5. Cross-Promotion Opportunities: The partnership with Universal Music Group and the integrated multimedia experience on Spotify provide opportunities for cross-promotion. Audiobooks can be promoted alongside music and podcasts, reaching a broader audience and increasing exposure for authors and publishers.

This is potential reach publishers could only dream of in the past, back when the world's biggest trade publisher, PRH, was led by the rabidly-opposed-to-subscription Markus Dohle.

But thanks to Dohle's successor, Nihar Malaviya, PRH and the other big trade publishers are in the subscription game, and the huge success of the move has seen Audible weeping -

and shedding 5% of its workforce -

and Amazon Music rushing to get in on the audiobook game.

The success of the Spotify audiobooks intervention has also shredded what little credibility the UK's Society of Authors had. It was about this time last year that the Society of Luddites was blatantly and falsely telling its members that Spotify was giving away their audiobooks for free, having previously told them the Spotify deal would have a "devastating effect" on authors.

A reminder that for Q1 2025, Spotify expects monthly active users to reach 678 million, with paid subscribers hitting 265 million.

Don't tell Markus Dohle!

And definitely don't tell the Society of Authors!