Spotify has missed its target for adding new subscribers as competition in the music streaming market intensifies.
The Swedish company added 8 million now paid subscribers in the latest quarter, taking its total to 108 million, but still 500,000 fewer than it had forecast. Spotify shares fell 5 per cent following the update for investors on Wednesday.
“We missed on subs. That’s on us,” Spotify’s founder and chief executive Daniel Ek said, referring to subscriber numbers. He said the company expects to “make up lost ground before year-end”.
Spotify is still the most popular music streaming service in the world, with almost double the number of paid-up members of its nearest rival Apple.
Revenue from subscribers, which accounts for around 90 per cent of Spotify’s overall revenue, rose to €1.5bn (£1.3bn) in the second quarter.
However, the company faces renewed challenges, not least from Google and Amazon, which have both recently launched free versions of their own music streaming services.
Google and Amazon deliver music streaming through their respective smart speakers and are hoping to use their hardware offerings to quickly increase subscriber numbers.
The set-up has upset Spotify. Earlier this year it filed a complaint with the European Commission against Apple, accusing the company of stifling competition to the detriment of consumers. Spotify argued that Apple makes it difficult for third-party streaming services to establish themselves on devices like the iPhone and iPad.
Purchases of apps and subscriptions on Apple devices must be paid for through Apple’s payment system. Apple takes a 30 per cent cut of these payments, including for Spotify's premium service, which Spotify claims gives its rival an unfair price advantage.
