Spotify says 2m listeners were ‘suppressing’ ads without paying


We already knew that Spotify had some ‘fake’ premium subscribers: people getting access to its premium tier without paying, through modified smartphone apps. Now we know how many: or rather, we know how many Spotify claims were doing this.

“On March 21, 2018, we detected instances of approximately two million users as of December 31, 2017, who have been suppressing advertisements without payment,” explained a re-filed prospectus for Spotify’s direct public listing.

The company had been counting those users for some of its key metrics, including monthly active users; ad-supported users; content hours; and content hours per monthly active user. Now they’ve been stripped out and the metrics restated.

As an example: in the original filing, Spotify claimed that it had 92 million ad-supported monthly active users, but in the restated filing that’s now listed as 90 million. In the original filing, Spotify’s premium average revenue per user was €5.32 a month, but now it’s fallen to €5.24.

Small changes in the scheme of things, but investors will want to know that Spotify is on top of this problem, and whatever methods to avoid paying emerge after it.

Stuart Dredge

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