The Ledger is a weekly newsletter about the economics of the music business sent to Billboard Pro subscribers. An abbreviated version of the newsletter is published online.


Music executives are balancing optimism about streaming growth with caution about the state of the economy and future growth.

As we reported Wednesday, Spotify had a solid second quarter, finishing with 188 million subscribers — 1 million ahead of its guidance., It also reached 433 million total monthly listeners — 5 million above its guidance. Beating guidance helped Spotify shares climb 12.2% to $116.61 on Wednesday, its highest mark since June 24.

In the second quarter, Spotify’s subscription growth was led by Europe and Latin America, while emerging markets such as India, Indonesia and the Philippines were standouts in monthly active users, according to the company’s Q2 2022 earnings report presentation. This is par for the course, according to Spotify CFO Paul Vogel who spoke with Billboard after the earnings report published. Emerging markets, he says, will provide user growth more than revenue gains — at least initially.

“We have this dynamic where we still have growth in our developed markets,” says Vogel “And we think the opportunity to increase monetization is really there. We see even faster [user] growth in our developing markets. And monetization will come — a little bit now but more in the years to come.”

Vogel says those emerging markets — large populations with sizable middle classes — are improving over time. Initially, Spotify wanted to launch in markets where it had complete understanding of the marketing and product/market fit. But after launching in roughly 80 additional markets in February 2021, Spotify is learning through experience. “We’re just getting better at local marketing, local advertising [and] tailoring the message to individual markets.”

Universal Music Group also sounded a cautious-yet-positive note about subscription growth in its earnings call on Wednesday. Micheal Nash, executive vp of digital strategy, noted UMG is “certainly monitoring developments” and aware of macroeconomic trends but doesn’t see “any indication right now that we’re going to see a problem in terms of sustained growth.” According to Nash, “consumer insights indicate that nearly 60% of subscription growth potential over the next few years is still in our top 10 developed markets.” Nash also cited “a huge opportunity for growth in emerging markets.”

Despite posting better-than-expected gains in monthly active users and subscribers, Spotify does not appear to be taking growth for granted. “I do believe only the paranoid survive,” said Vogel during Wednesday’s earnings call, “and we are preparing as if things could get worse.” That means watching spending and maintaining margins. Vogel reminded analysts Spotify decided to “proactively” reduce its hiring growth rate by 25% in the third quarter, which Billboard reported on June 15.

Importantly, Spotify does not see a “real impact” on subscriber outlook from the increasingly tenuous macroeconomic conditions. Vogel said during the earnings call that Spotify expects “similar” net additions — acquisitions net of churn — in the third quarter and “several” markets are trending ahead of forecasts.

He’s similarly restrained about growth potential in subscription fees that have led to small improvements in average revenue per user in recent quarters (ARPU was flat in the second quarter when excluding foreign exchange). “We believe we have the ability to increase pricing over time to monetize higher levels.” However, he added, Spotify is mindful of the headwinds it faces. “While we’ve talked about how well we’ve done from the user and subs perspective, it still doesn’t change the fact that the macro [economic environment] is not great.”



Through July 29, the % change over the last week, and the year-to-date change.

Universal Music Group (AS: UMG): 22.06 euros, +3.0%, -11.0% YTD
Spotify (NYSE: SPOT): $113.02, +1.2%, -51.7% YTD
SiriusXM (Nasdaq: SIRI): $6.68, +3.4%, +5.2% YTD​​​​​​​
Warner Music Group (Nasdaq: WMG): $30.00, +9.1%, -30.5% YTD
Live Nation (NYSE: LYV): $93.99, +2.6%, -21.5% YTD
HYBE (KS 352820): KRW 175,500, +5.1%, -49.7% YTD
iHeartMedia (Nasdaq: IHRT): $7.48, -3.5%, -64.4% YTD​​​​​​​
Deezer (PA: DEEZR): 3.70 euros, -14.9%, -38.3% YTD

NYSE Composite: 15,327.71, +3.6%, -10.7% YTD​​​​​​​
Nasdaq: 12,390.69, +4.7%, -20.8% YTD​​​​​​​
S&P 500: 4,130.29, +4.3%, -13.3% YTD

This story originally Appeared on