Spotify Ad Revenue (2017–2027)
In 2023, Spotify’s annual revenue hit $13.2 billion, demonstrating its transformation from the music-streaming service it was when it launched 16 years ago into a powerful digital audio platform that offers a mix of music, podcasts, and ad-supported content.
Recent data shows that ad revenue plays a vital role in Spotify’s business model, contributing significantly to overall revenue growth by capitalizing on its free-tier user base through targeted advertisements. This article examines Spotify’s ad revenue from 2017 to 2027, detailing its growth patterns and future forecasts.
Spotify ad revenue from 2017 to 2027: table
|
Year |
Spotify ad revenue |
Annual change |
|
2017 |
$451 million |
|
|
2018 |
$639 million |
+41.7% |
|
2019 |
$759 million |
+18.8% |
|
2020 |
$849 million |
+11.9% |
|
2021 |
$1.43 billion |
+68.2% |
|
2022 |
$1.55 billion |
+8.7% |
|
2023 |
$1.77 billion |
+14.0% |
|
2024 |
$1.94 billion |
+9.8% |
|
2025 |
$2.08 billion |
+6.8% |
|
2026 |
$2.17 billion |
+4.5% |
|
2027 |
$2.24 billion |
+3.1% |
Spotify ad revenue: 2017–2023
Spotify’s ad revenue has shown a steady increase from 2017 to 2023, reflecting the company’s success in monetizing its ad-supported user base. In 2017, Spotify generated $451 million in ad revenue. By 2018, this number had surged to $639 million, representing a 41.7% increase year over year. Spotify continued to build on this momentum in the subsequent years, reaching $759 million in 2019 and $849 million in 2020.
The most impressive jump came in 2021, when Spotify’s ad revenue soared by 68.2% to reach $1.43 billion. This sharp rise was fueled by Spotify’s strategic expansion into podcasting and its ability to attract major advertising partners. Having positioned itself as one of the most popular podcast platforms, the company gained higher engagement and saw demand for advertising slots increase. In 2022, ad revenue grew by 8.7% to $1.55 billion, followed by a further 14% rise in 2023, reaching $1.77 billion.
The steady growth in Spotify’s ad revenue between 2017 and 2023 can be linked to the platform’s strong user growth and strategic investments in content diversification. By expanding into podcasts and offering targeted advertising options, Spotify not only increased its ad inventory but also attracted brands looking to reach highly engaged audiences. As of Q2 2024, Spotify reported 626 million monthly active users (MAUs), with 393 million (62.8%) of them using the ad-supported tier. Meanwhile, there are 246 million Spotify premium users.
Spotify ad revenue forecast: 2024–2027
Looking ahead, Spotify’s ad revenue is expected to continue its upward trend, albeit at a slower rate. In 2024, Spotify’s ad revenue is projected to reach $1.94 billion, which would mark a 9.8% increase from the previous year.
By 2025, Spotify’s ad revenue is expected to climb to $2.08 billion, representing a 6.8% increase. Although the growth rate has tapered off, Spotify’s continued focus on podcasts and ad-supported content will likely contribute to the sustained expansion of its ad business. By 2026, ad revenue is projected to reach $2.17 billion, a growth rate of 4.5%, and by 2027, it is forecast to rise to $2.24 billion, showing a more modest increase of 3.1%.
The expected slowdown in Spotify’s ad revenue growth can be attributed to market maturity and increased competition in the digital audio advertising space. Nonetheless, Spotify appears to remain well-positioned. According to recent updates from Spotify’s Q2 2024 earnings report, the company’s advertising revenue for the quarter reached $465 million, a 13% year-over-year increase.