The financial release shows that the streaming giant hasn't felt the impact of the global recession. Free and paid accounts have grown at the same rate as the overall customer base. At the end of the first quarter, it had 423 million users. Premium has gone up six million from three months ago and four million are signed up on an ad supported basis.
Despite industry-wide fears that household budgets would cut entertainment costs to help free up much-needed cash, the company has avoided cost-cutting so far. The company said that it was pleased with the resilience of its business despite the uncertain environment. The company spent a lot of money to grow its user figures, with marketing campaigns designed to get back users who let their subscriptions lapse, or who want to expand to a family plan.
The company posted a quarterly loss of 194 million due to the marketing spend. The company is hoping for a big increase in revenue from subscriptions and advertising. In addition, its plan to pivot toward cheaper forms of audio content, like podcasts and audiobooks, should see the volume of cash it pays to record labels fall to a more tolerable level.
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