Spotify CEO says he's not afraid of Apple
- Spotify CEO Daniel Ek said he's not afraid of competition from Apple Music, and that multiple music streaming services will exist in the market.
- The company saw an improvement in customer retention in the first quarter as the average monthly churn rate hit an all-time low.
Spotify is the new kid on the block, debuting on the public market just last month, but it's fearless in the face of Apple Music.
"We don't really think this is a winner-takes-all market," CEO Daniel Ek said during the company's first earnings call Wednesday after market close. "We don't see any kind of meaningful impact of competition. In fact, we think multiple services will exist in the market, and we're all kind of in that growing market."
The company continues to hold a lead in the race against the tech giant with 75 million paying subscribers versus Apple Music's 40 million paying subscribers.
Ek said the company continues to see an overall decline in churn, the number of customers or subscribers who cut ties with the service, which means customer retention is getting better. The company reported an average monthly churn for the quarter of 4.7%, a historical low.
While Apple Music and Spotify compete as music streaming services, Amazon and Google present another aspect to the market as more and more consumers adopt voice-activated speakers. Spotify is available on both Alexa speakers and Google Home, and Ek said the new technology is a long-term opportunity rather than a threat, even if the two companies offer their own streaming services: Google Play Music and Amazon Music.
Spotify's first-ever earnings report, released Wednesday after the closing bell, disappointed investors and shares tumbled more than 10% in pre-market trading Thursday. The Luxembourg-based company reported a loss of 1.01 euros a share compared to analysts' expected loss of 0.23 euros a share. Its revenue met estimates of 1.14 billion euros. Declining advertising revenue and slow growth in subscription revenue weighed on the quarterly results.
Spotify is down almost 8% since debuting on the public market April 3, 2018.
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