Spotify has suspended premium service in Russia after the country launched its war on Ukraine — a move that the audio streaming powerhouse expects to result in a loss of about 1.5 million paying customers in the first quarter of 2022.
That’s according to Spotify CFO Paul Vogel, who spoke at Morgan Stanley’s 2022 Technology, Media and Telecom Conference on Wednesday. According to a Spotify spokesperson, the loss of its business in Russia is not material: The country represents less than 1% of total revenue.
Vogel also alluded to the recent controversy over podcaster Joe Rogan, which has spurred calls to boycott the streamer (but Vogel didn’t identify Rogan by name).
Prior to Russia’s invasion of Ukraine, according to Vogel, Spotify was trending ahead of its Q1 guidance of adding a net 8 million total users, including 3 million paying customers. That suggests that Spotify was not seeing a significant loss of users because of the backlash over Rogan, who has a $200 million-plus exclusive deal with the company. Rogan has been accused of spreading COVID misinformation on his popular “The Joe Rogan Experience” show, and he’s drawn fire over using the N-word in past episodes (which Spotify has since removed).
That said, Vogel acknowledged, “Going through a little bit of controversy, there’s always going to be some impact.”
In the wake of Russia’s military attack on Ukraine, Spotify closed its offices in Russia and pulled content from Kremlin-affiliated media outlets RT and Sputnik. It also has stopped accepting ads in Russia and is no longer collecting premium subscription revenue, Vogel said. However, the company is not disabling access to the service within Russia “to allow for the global flow of information,” as Spotify previously stated.
Spotify launched servicein Russia and Ukraine in July 2020, along with 10 other European countries.
As of the end of 2021, the company reported 406 million total monthly active users (which includes 180 million paying subscribers). Spotify has forecast 418 million total MAUs by the end of Q1 and total premium subscribers at 183 million.
