Abraham Yousef · September 2023
Spotify’s Engagement Drowns Out the Competition
Spotify's monthly active users (MAUs) are increasing, with downloads growing by an average of 2% month-on-month (MoM) in the second quarter of 2023, up 8% year-on-year (YoY). Competitors Amazon Music, Sirius XM, and YouTube also saw positive download trajectories, while Pandora and Soundcloud experienced significant declines. Spotify's YoY MAU growth has been consistently positive, with average MAUs growing from 331 million per month in 2020 to 514 million in 2023. Amazon is heavily investing in promoting Amazon Music, with the highest US ad spend across the cohort, followed closely by Spotify. In 2022, Amazon's ad spend led to an 11% increase in average MAUs YoY.
Key Takeaways:
As MAUs surge on Spotify, there are also positive indicators of its growing audience with downloads increasing on average 2% MoM in 2Q23, up 8% YoY. Across the competitor set, Amazon Music, Sirius XM, and YouTube have positive downloads trajectories, up 15%, 7%, and 5% YoY in 1H23, according to Sensor Tower data
The rest of the cohort saw a decrease in downloads in 1H23, with significant declines coming from Pandora (-21%) and Soundcloud (-11%)
Since Jan’23, Spotify’s MoM MAU growth is nominal, varying slightly between -1 to 3%, but the YoY growth numbers are consistently positive. Average MAUs grew from 331mn per month in 2020 to 514mn in 2023 YTD
Amazon is investing heavily in promoting Amazon Music across the cohort with the most US ad spend since Jan’22, with 41% of total spend in 1H23. Spotify is close behind with 39% of all spend across the cohort in 1H23 with SiriusXM in distant third at 14%
In 2022, Amazon dominated with 39% of spend across the cohort, leading to a 11% increase in average MAUs YoY, though downloads for new users was nearly flat at 2% YoY
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