More People Are Paying for Spotify – Here’s Why

Spotify is having a moment. The global music streaming giant just announced a 12% jump in paid subscribers, reaching 276 million people who are now willing to pay for their playlists. 

But behind that impressive number is a deeper story, one that shows how Spotify is evolving, what’s changing in the streaming business, and why profits aren’t keeping up with the subscriber surge.

More users ans more value

In the second quarter of 2025, Spotify didn’t just grow its paying base, it also saw a significant rise in total users. 

Monthly active users jumped 11% year-on-year to hit 696 million, bringing the company closer to the 700 million milestone. For Spotify CEO and co-founder Daniel Ek, this is no accident. “People come to Spotify and they stay on Spotify,” he said, pointing to the platform’s constant evolution and commitment to user experience.

The numbers suggest that Spotify’s strategy ranging from exclusive podcast deals to smarter recommendations and curated playlists is working. As more people spend time on the app, more of them are deciding to ditch ads and commit to a paid subscription.

Profits fell short

Despite the boom in subscribers, Spotify’s operating profit didn’t meet expectations. It posted €406 million ($468 million) between April and June certainly an improvement from past quarters, but still well below the €539 million the company had forecast.

Why the shortfall? A few reasons:

• Higher salary costs and internal expenses.
  
• A shift in the company’s revenue mix.
  
• Unexpected “social charges”, costs linked to the company’s rising share price, which led to a €98 million spike beyond forecast.
  

In other words, while Spotify is making more money, it’s also spending more to keep the machine running and its talent well-compensated.

The AI music debate

Spotify’s latest earnings also arrive during a growing debate over artificial intelligence in music. As AI-generated songs flood the internet, concerns have emerged about how this could impact human artists. 

While platforms like Deezer have introduced labels to flag AI-composed tracks, Spotify has not yet followed suit.

Still, Ek remains optimistic. He believes AI won’t replace artists, but instead fuel new forms of creativity. Whether that’s enough to satisfy critics remains to be seen.

Why are more people paying?

At the end of the day, Spotify is still winning where it matters most: user loyalty. Whether it’s personalized playlists, exclusive content, or a slicker app experience, Spotify continues to convince more people to pay for the premium experience. 

It’s a sign that streaming is no longer just about access, it’s about connection, convenience, and community.

The challenge now? Turning those subscribers into sustained profit without compromising on innovation. Spotify’s growth story is far from over, but it’s entering a new chapter, one where it must balance expansion with smarter spending.