In the fourth quarter of 2024, the music streaming service Spotify reached an all-time high with 675 million active users worldwide. This marked an increase of around 12 percent in just one year. What is Spotify? Spotify is a music streaming service that offers digital audio content. Basic audio content can be accessed for free whereas premium user subscriptions enable users to access offline mobile content as well as listen to music without advertising. In the fourth quarter of 2024, the company reported 263 million paying subscribers. Launched in 2008, Spotify originated in Sweden before expanding to European markets and the United States in 2011. Spotify’s U.S. launch was strongly marketed through Facebook, with the music streaming app profiting from the social listening integration via social media. Part of Spotify’s appeal can be attributed to the user- and brand-curated playlists, which can be shared publicly or between friends. Fans may choose what to listen to based on their current mood or preference, and the ability to share such content provides an element of social connectivity ordinarily reserved for networking sites.

In the first quarter of 2025, Spotify reported having ** percent of their total monthly active users (MAUs) located in Latin America, which translates to around ***** million MAUs in the region, up from around *** million a year earlier – an annual increase of ** percent. Overall, the region accounts for over one-fifth of Spotify’s MAUs worldwide.

As of the fourth quarter of 2024, Europe accounted for 27 percent of Spotify monthly active users. The popular Swedish streaming service had a strong user base in Latin America, accounting for 22 percent of Spotify's total 675 million MAUs at that time.
Spotify Since its launch in 2008, Spotify has grown into the most widely used music streaming platform in the world, controlling over a third of the industry’s global market share. Despite being in direct competition with some of the biggest names in the tech industry, the company has managed to accumulate over one hundred million paying subscribers and millions more free and ad-supported users. Spotify has ensured that this massive userbase has led to increasing financial success. The company reported an annual revenue of around 5.3 billion euros in 2018, outpacing its 2017 figure by well over a billion dollars. Music streaming Music has always been an important form of human expression and entertainment, but never before has it been so easily accessible. Thanks to the growing popularity of smartphones and streaming services, hundreds of millions of people around the world have access to an almost unlimited library of music at the touch of a button. As of 2023, streaming accounted for 84 percent of the total music industry revenue in the United States, up from 79 percent five years earlier. This highlights the massive influence of companies like Spotify on the music industry as a whole.

Spotify's ad-supported monthly active users reached a record high of 425 million in the fourth quarter of 2024, continuing the music streaming giant's trend of consistent growth. This figure represents an increase from 379 million users in the previous quarter, highlighting Spotify's ability to attract and retain users through it's free, ad-supported tier. The company's strategy of offering a free option alongside its premium subscription service appears to be paying dividends in terms of user acquisition. User base growth and market penetration Spotify's total active user base hit an all-time high with 675 million active users in Q4 2024, marking a surge of 73 million users in just one year. This growth encompasses both ad-supported and premium subscribers, with the latter reaching 263 million in the same quarter. The platform's expansion is particularly strong in Europe and North America, which together account for 65 percent of Spotify's premium subscribers. Europe remains Spotify's strongest market, representing 37 percent of paying users. Revenue challenges and competitive landscape Despite the robust user growth, Spotify faces challenges in monetizing its expanding ad-supported user base. The company's premium average revenue per user (ARPU) has been declining since 2017, reaching 4.69 euros in 2024. This trend suggests that while Spotify excels at attracting users, converting them to higher-paying tiers remains a challenge. The company operates in a competitive landscape that includes rivals like Pandora and Apple Music, forcing Spotify to continually innovate and improve its offerings to maintain its market position.

In the fourth quarter of 2024, Pandora had 43.34 million monthly active users in the United States. The online radio platform has been suffering gradual user losses each quarter for some time, and has lost more than ten million U.S. users in the past two years. Pandora business model Pandora Internet Radio is a part of the Music Genome Project that provides a music streaming service as well as music recommendations. The Music Genome Project uses 450 attributes to describe a song and an algorithm that organizes a wide range of music. Currently, Pandora is only available to users in the United States, Australia, and New Zealand. Since its launch in January 2000, Pandora Internet Radio has grown significantly, though its user base has declined recently. As of December 31, 2024, Pandora reported over 43 million monthly active users. In comparison, Spotify reached an all-time high of 675 million active users worldwide in the fourth quarter of 2024. Unlike Pandora, Spotify is available in most of Europe, South America, parts of Australasia, and various other countries around the world. Pandora's financial results In recent years, as Pandora has become more successful, the company’s revenue has reflected its broadening market. In the financial year 2024, Pandora’s revenue totaled 2.15 billion U.S. dollars, a figure which has risen significantly compared to just two years prior. Pandora currently obtains most of its revenue through advertisement, subscriptions, and directing users to purchase music through Apple and Amazon. In 2024, the company's advertising revenue exceeded 1.6 billion U.S. dollars.

Spotify generated an estimated 1.5 billion U.S. dollars in advertising revenue in 2022. Based on the latest calculations, this figure will reach 2.2 billion U.S. dollars by 2027.

Why advertise on Spotify?

One of the main reasons for Spotify's appeal as an advertising destination is its reach. Company reports indicated that the number of Spotify's monthly active users (MAUs) hit a record high of 433 million in 2022, nearly twice the audience size recorded in 2019. By comparison, Apple Music has yet to reach the 100-million-subscriber mark, highlighting Spotify's pole position among the world's most popular paid music streaming services. Another factor distinguishing the Swedish streaming giant from international competitors is its two-tier subscription model. In addition to its Premium model, Spotify offers a free, ad-supported option that serves audio and video ads between songs.

Spotlight on podcast advertising

Podcasts have become essential contributors to the success of digital audio streaming platforms like Spotify. Data showed that Spotify amassed over 32 million monthly podcast listeners in the United States in 2022 and outperformed Apple Podcasts by some four million listeners. Not only that, but Spotify's podcast advertising revenue has also skyrocketed in recent years, jumping from just over 25 million in 2020 to almost 192 million in 2022. Industry sources expect this figure to surpass 400 million by the year 2024, highlighting the ever-increasing contribution of podcast content to Spotify's financial future.

In the financial year 2023, music streaming services in India recorded an average of as many as 170 million monthly active users. It reflected an upward trajectory that developed since fiscal year 2020 with roughly 50 million monthly active users onboarded during the pandemic. Moreover, music streams in the South Asian market grew by 16 percent between financial years 2022 and 2023.

In November 2024, Tencent's music apps - QQ, KuGou,and Kuwo - were the three most popular music streaming apps in China. The monthly active users of QQ Music totaled to around 337 million, whereas Baidu's rebranded Qian Qian amassed around 5.8 million monthly active users. The music arena of Tencent Globally, Tencent is one of the biggest music streaming providers. The Chinese tech behemoth owns the largest music company in the country – Tencent Music Entertainment (TME). With roughly 60 percent of the local music market share, TME had reported a profitable financial status since its founding in 2016. Besides, its monthly active users rose to 600 million – capturing most of the mobile music userbase in the country. Among its music apps, KuGou Music was found to be favored by those who aged between 19 and 28, while QQ Music was more preferred among older users. The dilemma of online music Although the usage of music streaming is high among Chinese netizens, most of them are not familiar with paying for the services. Music streaming platforms, such as those owned by Tencent Music Entertainment, can hardly generate high revenue per user. They are more likely to opt for free sources to access their choice of music. The subscription rate remained below 25 percent. To address the problem, industry experts suggested raising public awareness of copyright protections.