Spotify expands third party payment option to 140 markets

Audio streaming giant Spotify announced in its Q4 earnings report on Tuesday that it has expanded Google’s User Choice Billing program to its subscribers in more than 140 markets around the world.

The program, which Google launched in March 2022 with Spotify as its early tester, allows app developers to offer their users alternative payment options alongside its own billing system, but it still takes a cut from their in-app purchase revenue. Its commission is normally 15% for subscription-based apps and 30% for the rest, but is reduced by 4% if developers enroll for the program. 

Google expanded the program to developers of non-gaming apps in the European Economic Area last July, to Australia, India, Indonesia and Japan in September, and to the US, Brazil and South Africa in November, when the popular dating app Bumble also joined it as an early tester.

And it wasn’t until November that Spotify shared details about how it was doing with the program. At the time, the company said in a blog post that it started implementing the UCB in select markets, but didn’t disclose which markets they were. 

In its financial earnings report shared yesterday, Spotify said the program was rolled out to its subscribers in more than 10 markets in November, and has been expanded to over 140 markets since then. While the names of these markets still remain a question, the company said in a statement to TechCrunch that it plans to expand UCB to all of the countries where Spotify Premium and Google Play Billing are available .

Spotify users increased by 20% in Q4 2022

The number of Spotify’s monthly active users reached 489 million in the fourth quarter of 2022, up 20% year-over-year. Its paid subscribers grew by 14% to 205 million, and ad-supported monthly active users increased by 25% to 295 million at the same time.

For Q4 2022, the company reported a total revenue of €3.17 billion, up 18% from the same quarter of 2021. While premium subscriptions accounted for €2.7 billion, ad-supported users drove the remaining €449 million.

Also Read: Spotify Revenue and Usage Statistics

Although Google’s User Choice Billing program doesn’t completely free Spotify from the controversial in-app purchase charge, it could provide a relief to its business which is still challenged by various factors including the global economic slowdown. Last week, Spotify announced plans to lay off 6% of its workforce in an effort to reduce its costs.