There are 195 countries in the world, and as of this week, you can listen to Spotify (NYSE:SPOT) in almost half of them.
Yesterday, Spotify launched its service in 13 new eastern European markets: Albania, Belarus, Bosnia & Herzegovina, Croatia, Kazakhstan, Kosovo, Moldova, Montenegro, North Macedonia, Russia, Serbia, Slovenia, and Ukraine. The new additions bring the number of nations in which Spotify offers service to 92 and adds 250 million potential listeners to Spotify's total addressable market.
Russia is the highest profile country among the new additions. Facing ongoing economic sanctions by the U.S., Russia's economy contracted for three straight years from 2013 through 2016, before returning to growth through 2019. Like many countries, Russia's economy plunged along with the broader global economy when coronavirus struck earlier this year.
Nevertheless, Spotify sees opportunity in Russia, which it describes as "the 17th-biggest streaming market in the world and on pace to be the 10th-biggest streaming market by 2030." According to Spotify, 87% of music listeners in Russia use streaming services compared with a 61% average globally.
Spotify will now begin offering both free (to attract potential paying customers) and premium (i.e. paid-for) services in these new markets. This is a continuation of the company's goal of international diversification. Although the United States is currently Spotify's most lucrative market, producing $2.9 billion in revenue last year according to data from S&P Global Market Intelligence, markets outside the U.S. are already a much larger part of Spotify's business, producing revenues of $4.7 billion -- 62% of the total.
With this week's news, Spotify's global revenue is only going to grow.