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Spotify subscriber growth hampered by Russia exit

On Wedneday, Swedish music streaming giant Spotify reported a lower than expected growth in paying subscribers in the first quarter, citing its exit from Russia.

Spotify subscriber growth hampered by Russia exit
Spotify's office in Stockholm. Photo: Amir Nabizadeh/TT

Following the company’s publication of its first quarter earnings, shares in the streaming service were down over 11 percent on the New York stock-exchange, where the company is listed.

Spotify reported that at the end of March it had 182 million paying subscribers, a 15-percent increase compared to a year earlier, but short of its estimated 183 million.

Meanwhile, analysts had projected the number to hit 187 million. “While this is slightly below our guidance, after excluding the involuntary churn of approximately 1.5 million subscribers as a result of our exit from Russia, growth was above expectations and aided by outperformance in Latin America and Europe,” the group said in a statement.

Like many Western companies, Spotify suspended operations in Russia after Moscow’s invasion of Ukraine, a withdrawal that was finalised on April 11.

By the end of next quarter, the company, which was founded in Sweden, hopes to have 187 million paying users while anticipating a loss of another 600,000 subscribers in Russia.

On the other hand, Spotify did not specify any financial impact resulting from a controversy involving the popular podcast of stand-up comedian and sports commentator Joe Rogan.

Rogan was accused of spreading misinformation about Covid-19 and discouraging Covid-19 vaccinations for young people, sparking artists, including Neil Young and Joni Mitchell, to call for boycotts against the service.

The total number of monthly users, free and paying, of the platform came in at 422 million in the first quarter, above the group’s expectations and in line with that of Wall Street analysts.

Spotify said a service outage in March forced users who no longer had access to their accounts to create new ones and without this artificial increase, monthly active users would have totalled 419 million.

Revenue was $2.7 billion, the vast majority from paying subscribers and slightly below market forecasts, while net profit was $131 million.

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SAS

SAS pilot unions delay strike for three days of extra talks

Sweden’s pilot union has agreed to postpone the strike planned for Wednesday by three days in the hope of striking a last minute deal with the SAS airline.

SAS pilot unions delay strike for three days of extra talks

The strike, due to start on June 29th, has been pushed forward until just after midnight on July 1st, to provide time for extra negotiations with the Scandinavian airline’s management over a new collective bargaining agreement. 

After weeks with intensive negotiations over a new agreement between SAS leadership and 1,000 of the airline’s pilots, both sides are now willing to continue discussions, pushing back the deadline by three days. 

“SAS and the Norwegian pilot union are in agreement that we will continue negotiations for three days,” Norwegian national mediator Mats Wilhelm Ruland said. “There’s been intensive work towards finding a solution.”

Karin Nyman, Swedish press officer for SAS, said that the company was glad to have been given more time.

“It means above everything else that our customers will be able to travel over the next few days,” she told Swedish newswire TT.

Martin Lindgren, chairman of the Swedish SAS branch of the Swedish Air Line Pilots Association (SPF), would not comment on the content of the negotiations, but said that it was worth continuing to try and reach an agreement.

“We feel a great responsibility towards both SAS and our members, but above all towards our passengers,” he said in a press statement.

“Although we have gone to great lengths to come to an agreement, many issues remain unsolved. The strike can only be avoided if SAS show a real will to meet us. As of now, we’re choosing to give the other side yet another chance to do that.”

The airline’s Danish press officer, Alexandra Kaoukji, wrote in a statement to Danish newswire Ritzau that mediators believe “there is a possibility of reaching consensus” on a new agreement between the airline and pilots.

“The new 72-hour deadline means that our passengers will be able to travel,” she told the newswire. “We’re very happy about that. Our hope is therefore that we can find a solution and that passengers will not be affected.”

Nyman was also hopeful that both sides would be able to come to an agreement without resorting to strike action.

“We can only state that we’ve had constructive talks in recent days in our negotiations, and obviously the mediators have then made the assessment that there is a chance of reaching an agreement,” she said.

Pilots are unhappy that SAS is hiring new pilots on cheaper contracts in their two subsidiaries, SAS Link and SAS Connect. If the two parties cannot come to an agreement, up to 30,000 SAS passengers could be affected per day, the airline said on June 27th.

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