Spotify Revenue (2013–2023)
Launched in 2008 as a music-streaming service by Swedish entrepreneurs Daniel Ek and Martin Lorentzon, Spotify has grown to become one of the top music apps worldwide in terms of both user count and engagement.
Building on its music-streaming success, the Stockholm-based company expanded into non-music content in 2015. It’s a strategic move that has more than paid off, positioning Spotify as the most popular podcast platform today.
But how does Spotify make money, and how much revenue does it actually make? In this article, we take a close look at Spotify’s annual revenues and explore its main revenue streams.
Spotify financials: highlights
- In 2023, Spotify’s yearly revenue rose by 13%, to $13.2 billion. According to the company’s latest financial report, in Q2 2024, revenues hit $3.8 billion, a 20% annual increase.
- Income generated by Spotify’s premium plans accounted for 87.2% of the company’s overall revenue in 2023.
- From 2013 to 2023, Spotify’s yearly revenue grew by an average annual growth rate of 34.6%.
Spotify revenue (2013–2023): table
|
Year |
Revenue |
Annual change |
|
2013 |
$746 million |
|
|
2014 |
$1.1 billion |
+45.4% |
|
2015 |
$1.9 billion |
+78.8% |
|
2016 |
$3.0 billion |
+52.2% |
|
2017 |
$4.1 billion |
+38.6% |
|
2018 |
$5.3 billion |
+28.6% |
|
2019 |
$6.8 billion |
+28.6% |
|
2020 |
$7.9 billion |
+16.5% |
|
2021 |
$9.7 billion |
+22.7% |
|
2022 |
$11.7 billion |
+21.3% |
|
2023 |
$13.2 billion |
+13.0% |
How much does Spotify make a year?
Spotify’s revenue growth over the past decade has been remarkable. Starting at $746 million in 2013, the company saw a significant surge in revenue, reaching $13.2 billion in 2023. Over this 10-year period, Spotify’s revenues have experienced both rapid jumps and steady increases.
For instance, between 2014 and 2015, Spotify’s revenue surged from just over $1 billion to nearly $2 billion—a growth rate of 78.8%. Another notable increase occurred the following year, with revenue rising by 52.2%, to $3 billion.
While the growth rate has slowed in recent years, Spotify is still achieving double-digit revenue increases. Between 2021 and 2022, revenue climbed from $9.7 billion to $11.7 billion, representing a solid 21.3% growth. Most recently, in 2023, Spotify’s revenues reached $13.2 billion, reflecting a growth rate of 13%. Although more sluggish compared to prior years, it still signals consistent financial expansion for the company.
In the latest company update, Spotify’s total revenue for the second quarter of 2024 was $3.8 billion, marking a 20% increase from Q2 2023.
How does Spotify make money?
Spotify revenue breakdown: table
|
Year |
Ad supported |
Premium subscribers |
|
2018 |
$0.5 billion |
$4.7 billion |
|
2019 |
$0.7 billion |
$6.1 billion |
|
2020 |
$0.7 billion |
$7.1 billion |
|
2021 |
$1.2 billion |
$8.5 billion |
|
2022 |
$1.5 billion |
$10.3 billion |
|
2023 |
$1.7 billion |
$11.6 billion |
How Spotify makes money: ad-supported accounts and premium subscribers
So, how does Spotify make money?
Data shows that Spotify’s revenue model is primarily based on two main streams: ad-supported users and premium subscribers. Both have contributed significantly to Spotify’s financial success over the years.
The ad-supported revenue stream generates income through ads that are played for users on Spotify’s free service. In 2023, Spotify’s ad revenues reached $1.7 billion, up 13.3% from $1.5 billion in 2022. This steady increase can be attributed to Spotify’s ongoing efforts to enhance its advertising capabilities and attract a larger audience through its free-tier service. The company’s Q2 2024 earnings report also showed that advertising revenue had reached $465 million for the quarter, marking a 13% annual increase.
The majority of Spotify’s revenue comes from its premium subscription plans, which provide an ad-free listening experience, offline music playback, and higher sound quality. In 2023, the revenue from premium subscribers was $11.6 billion, rising by 12.6% from $10.3 billion in 2022. Premium accounts contributed to more than 85% of Spotify’s total revenue in 2023.
As of Q2 2024, the company had reached 393 million users on its ad-supported service, marking a 15% increase. Meanwhile, the number of Spotify premium users grew to 246 million, a 12% annual rise.
Though Spotify’s overall financial success is heavily reliant on premium subscribers, the ad-supported model plays a vital role as it eventually converts many to paid users.