Spotify Suspends Premium Accounts in Russia
Spotify CFO Paul Vogel said the shutdown will result in a loss of about 1.5 million paying customers in the first quarter of 2022.
Spotify has suspended its premium accounts in Russia after the country’s invasion of Ukraine, a company executive said on Wednesday (March 9).
Paul Vogel, the streaming platform’s CFO, said the shutdown would result in a loss of about 1.5 million paying customers in the first quarter of 2022, Variety reported. That is not expected to be material for the company: Russia represents less than 1% of Spotify’s total revenue of 9.67 billion euros ($10.93 billion) in 2021, up 22.7% from 2020.
In the wake of Russia’s attack on Ukraine, Spotify said last Wednesday that it was closing its office in Russia and removing content from state-sponsored broadcasters RT and Sputnik.
The platform has been unable to add new premium accounts or to run advertising in Russia since credit card companies Visa, Mastercard and American Express all announced over the weekend that they were ceasing operations in the country, a person familiar with the situation tells Billboard. Existing premium accounts will soon lapse from the lack of payment options, the source says. PayPal said it had also shut down services in Russia but would support withdrawals “for a period of time.”
Spotify has, meanwhile, promoted the use of its “global guide,” a hub of podcast offerings from traditional news sources, which are lending a hand in helping battle Russian disinformation. The hub includes podcasts for daily news, news from around the world and a “Ukraine Explained” tab. “It’s critically important to try to keep our service operational in Russia to allow for the global flow of information,” Spotify said in a statement.
Speaking at Morgan Stanley’s 2022 Technology, Media and Telecom Conference in San Francisco on Wednesday, Vogel said that before Russia’s invasion of Ukraine, Spotify was exceeding its first quarter guidance that it would add 8 million total users, including 3 million subscribers. That would indicate that the company has not been losing users as a result of the controversies involving podcaster Joe Rogan, who reportedly has a $200 million-plus exclusive deal with Spotify.
Rogan has been criticized for promoting conspiracy theorists, some of whom were accused of spreading COVID-19 misinformation on his The Joe Rogan Experience show, as well as for his use of “racially insensitive language.”
Spotify said it had 406 million total monthly active users at the end of 2021, including 180 million paying subscribers. The company forecast 418 million total MAUs and 183 million total premium subscribers by the end of the first quarter of 2022.
The streaming company launched its service in Russia and Ukraine in July 2020, along with 10 other European countries.