spotify

Spotify Technology SA announced several new initiatives — from concert ticket perks to a major AI-generated music licensing deal — that the Swedish audio streaming company said will help fuel growth over the next four years.

At the first investor day led by new co-chief executives Gustav Söderström and Alex Norström, Spotify outlined a vision revolving around features that will allow people to personalize their listening experience, whether with music, podcasts, audiobooks or working out. Investors liked what they heard, pushing Spotify shares up as much as 18% over the course of the presentation.

Spotify addressed one of Wall Street’s biggest concerns about artificial intelligence by announcing a major new licensing deal with Universal Music Group NV. The agreement will let Spotify launch a tool to let fans create covers and remixes of their favorite songs from artists and songwriters who opt in. Powered by generative AI, the tool will be available as a paid add-on for Spotify Premium users. It will open up additional revenue streams for Spotify and create a new source of income for artists and songwriters on top of what they already earn on the platform, according to the companies.

Spotify has been working with the music industry on ways to harness the power and consumer interest in AI without violating artists’ rights. Last October, the company announced an agreement with the biggest record labels to use AI in a “responsible way,” but didn’t specify at the time what those tools would look like.

“This era of generation doesn’t need to threaten the future of music,” said Charlie Hellman, Spotify’s head of music. “Because we built the system legal, trusted and aligned, we can make sure that the value flows back to the people who created it.”

In another big announcement, the company laid out plans to work with Live Nation Entertainment Inc. to offer Spotify subscribers the option to purchase two tickets to their favorite star’s concert before they go on sale to the general public. The move could help resolve some of the issues fans have had in beating ticket resellers to face-value tickets, while encouraging customers to stay on as subscribers even as Spotify raises monthly fees.

Fans have long complained about the ticketing process for live performances, which often pit people against bots and scalpers, leading to high prices and sold-out shows.

“It’s frustrating for fans,” said Rene Volker, head of live events. “It’s frustrating for artists too, who look out at a crowd and wonder, are the fans who built my career actually here?” The new “Reserved” perk is designed to relieve some of that tension. “No racing bots, no chasing around online for presale codes. Just two tickets held for you,” she said.

The presentations Thursday were designed to comfort investors and prove that Spotify can still innovate. Wall Street has been skeptical that the company can rein in costs while staying ahead of competitors, particularly as it relates to AI. Those concerns have weighed on shares this year, sending them down 25% through Wednesday’s close. While the company makes most of its money through subscriptions, the executives sought to reinforce the idea that they have other levers to pull in order to generate sales beyond monthly fees and that people are willing to spend more for certain features.

The company outlined its growth targets through 2030, including a compound annual growth rate in the mid teens, a gross margin of 35% to 40% and an operating margin above 20%. Spotify remains committed to its long-term goal of 1 billion subscribers, $100 billion in revenue and over 40% in gross margin, the executives said.

Spotify sees its podcast and audiobook features as complementary to music and said the combination of the multiple verticals has helped broaden its community and convert users from free listeners to paid subscribers. Today, more than 500 million people have streamed a video podcast on Spotify, up nearly 50% from a year ago. And in just a few years, Spotify has captured about 20% of the audiobooks market in the US, executives said. People who use all three verticals — music, podcasts and audiobooks — are engaging with Spotify almost every day of the month, according to the company.

Giving people the tools to personalize their listening experience helps keep them in Spotify’s universe — creating what executives described as the “all day user.”

Personal Podcasts, for example, lets people write a prompt in the Spotify app and AI will create a unique podcast in response.

“We see this much more as a daily brief and a recommendation engine than something that would replace you listening to one of your favorite podcasts,” Söderström said in an interview. He noted that 60% of users in mature markets for Spotify don’t yet listen to podcasts, so features like Personal Podcasts could get them to dive into the medium.

The company said its podcast business has been profitable for two years.

Spotify’s Audiobook+ tier gives listeners more than their allotted 15 hours of audiobook listening per month for an additional fee. It has 1 million subscribers and is on track to generate $100 million in annualized revenue, the company said. To capitalize on the demand, Spotify will start selling even more audiobook hours to super users. Additionally, it will allow podcasters to offer memberships, so subscribers can access special episodes and other content. Spotify will take an undisclosed slice of revenue from the memberships.

Carman writes for Bloomberg.

On a recent weekday morning inside a studio in the heart of Hollywood, Rachel Lindsay and Van Lathan, co-hosts of The Ringer’s “Higher Learning,” were getting ready to roll.

By the time the podcasters came into the Spotify Sycamore Studios for their show, which covers all things in Black culture and politics, the overhead lights were set, and the cameras were precisely angled. Decorative books were propped up between their seats and a big red “Higher Learning” logo stood behind them.

As soon as everyone silenced their phones, the hosts began to banter like two old friends. Lindsay complimented Lathan on his recent foray into stand-up comedy at the Netflix is Joke Fest at the Laugh Factory.

“I just have to say … basically a star is born,” said Lindsay, grinning. “I have to talk about it. Now I never doubted you.”

The pair helms one of the many shows on The Ringer podcast network, known for its roster of A-list celebrity hosts and sports and culture commentators that recently moved into Spotify’s newest podcasting studios.

The 11,000 square-foot space on Sycamore Avenue was designed as both a home base for The Ringer’s production and a video podcasting hub for select Spotify creators.

Since its opening earlier this year, the space has welcomed more than 25 podcasters and shows, on top of the dozens of shows that still record at Spotify’s Mateo studios in the Arts District.

The company estimates that over the last five years it has contributed more than $10 billion to the podcasting industry, including payouts to creators and investments in new content.

Podcasts are just one arm of Spotify’s business, as the audio giant has over 100 million songs and 700,000 audiobooks on its platform. But video podcasts have become an increasingly important way for the company to keep listeners tuned in — and paying for subscriptions amid growing competition from Apple Music and YouTube Music. Despite a surge in profits in the first quarter, Spotify’s share price has fallen 25% this year as investors worry about a slowdown in subscriber growth.

Van Lathan and Rachel Lindsay record their podcast, “Higher Learning with Van Lathan and Rachel Lindsay,” at Spotify’s Sycamore Studios in Hollywood on May 7. The podcast is distributed on Spotify through The Ringer.

(Allen J. Schaben/Los Angeles Times)

One of the main drivers behind opening the Sycamore studios was to create a central hub for The Ringer, a media company Spotify acquired for $250 million in 2020.

Geoff Chow, Spotify‘s head of podcast studios and The Ringer’s managing director, said the investment is already paying off “in terms of the productivity and the quality of the content we’re able to produce from here.”

The Ringer is one of the streamer’s most popular assets. Spotify includes nine Ringer shows in its list of the top U.S. podcasts.

“They’re pouring into this space and their creators,” Lathan said, before recording a new “Higher Learning” episode. “We really have the freedom to do so much.”

He and Lindsay said the studio has elevated their show by switching up their workflow and increasing in-person work.

Thanks in part to its centralized location, tucked between the offices of SiriusXM and music and sports entertainment company Roc Nation, they say guests are more eager to visit and record in person. Lathan joked that even while walking down the street, he’ll run into radio personalities like Sway Calloway, who hosts his own successful “Sway in the Morning” show on SiriusXM, and convince them to come up for a tour of the space.

Sycamore has already seen guest appearances from Snoop Dogg on “Game Over with Max Kellerman and Rich Paul,” Pennsylvania Gov. Josh Shapiro on “Higher Learning with Van Lathan and Rachel Lindsay” and “Project Hail Mary” author Andy Weir on “House of R.”

“This street is so cool,” Lindsay added. “It’s just a different energy here.”

The duo first started recording at Spotify’s Arts District campus, which is more focused on audio-driven programs. But as the podcasting landscape evolves and video becomes a more important element, “Higher Learning” is now able to maximize on the new studio’s video-first capabilities.

Chris Thomas, studio operator, works in the control room on the podcast, “Higher Learning with Van Lathan and Rachel Lindsay.”

(Allen J. Schaben/Los Angeles Times)

Spotify also employs a combination of full-time employees and freelancers that staff each show, including sound engineers, lighting specialists and set designers who help keep the place running.

The Ringer, founded by media mogul Bill Simmons, exists online as a website, a podcast network and video production house, anchored in sports, pop culture and politics coverage. Some of its most popular programs include “The Bill Simmons Podcast,” “The Rewatchables” and the inaugural Golden Globe winner “Good Hang with Amy Poehler.”

Many of the hosts overlap within The Ringer’s podcasting ecosystem. Just between Lathan and Lindsay, they host and appear as regular guests on as many as five shows, so they work from the studio three to five times a week. By being in close quarters together, a greater sense of collaboration has enveloped The Ringer’s team. Chow said there are some days when Simmons will walk onto four shows a day, just to share his thoughts on a topic.

“This is my dream of what The Ringer is. We’re all here talking, we’re all existing together,” Lathan said. “We’re all popping in and out of different rooms all the time.”

Exterior view of the building that houses Spotify’s new Sycamore Studios. The company takes up one floor of the facility.

(Allen J. Schaben/Los Angeles Times)

The Ringer was first founded in 2016. At the time, Simmons had recently been ousted from ESPN due to a strained relationship with higher-ups. Simmons had spearheaded the network’s Grantland sports blog, which focused on cultural commentary that is similar to what The Ringer does today. The Ringer soon established itself as one of the fastest-growing independent podcast networks.

The brand still keeps its roots in fandom — whether it’s through football or “Game of Thrones,” said Chow. So, to have a space that reflects the diversity of its programming often makes recording more fruitful, especially during key moments like the NFL draft or awards season.

As The Ringer continues to expand its roots in Hollywood, the network remains focused on maximizing its content.

In January, The Ringer started airing select podcasts on Netflix to reach a wider audience. Chow said the partnership is off to a promising start. Each of the five recording studios at the Sycamore site is fully equipped with live-streaming technology — making the weekly Netflix live shows possible.

“Podcasts have become like a cultural hub and curator of things that are happening in the world,” Chow said. “We always want to innovate and test. That’s something that was exciting to us to think about bringing our audience new content in different places.”

JENNIFER Lopez has joined Spotify’s billionaire club for the first time.

Her 2011 dance hit On The Floor, with rapper Pitbull, has now clocked up more than a billion streams.

The US singer, 56, in a celebratory mood at a Netflix comedy event in LA on Sunday night thanked fans online, adding: “Thank you JLovers … On The Floor is one billion strong on Spotify because of you!

“Let’s keep dancing.”

It is the first of J-Lo’s songs to ever achieve the feat, while it becomes Pitbull’s sixth track to make the grade.

However she has a way to go before overhauling Spotify’s most-played track — The Weeknd’s 2020 classic Blinding Lights, on 5.4billion streams.

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Released as the lead single from her seventh album Love?, the song marked a major comeback for the star following a quieter period in her music career.

We recently revealed how the star got down and dirty with her co-star Brett Goldstein in a first look at their brand new movie, Office Romance.

A trailer for the raunchy Netflix rom-com has dropped with J Lo serving up some of her sauciest on-screen scenes to date.

The hotly anticipated flick is due to release next month with Jennifer and her co-star Brett having heaps of passion as a typical work love story blooms.

Spotify wants to give historic venues such as the Troubadour and the Paramount — and the independent musicians who play there — a boost.

The steaming giant on Wednesday said it is partnering with the National Independent Venue Assn. (NIVA) to promote local music nationwide, including at dozens of clubs in L.A.

In the yearlong partnership, the company said it aims to boost visibility for independent music venues through its live events feed that will feature links to music from local artists and their performances at clubs in the Los Angeles area.

As part of the initiative, NIVA will choose someone who books the acts for these indie venues to work with Spotify’s editorial team and create a playlist featuring artists.

Spotify is launching the playlist this summer to celebrate and highlight the people shaping independent live music from behind the scenes.

The Regent Theater, Gold Diggers, the Teragram Ballroom and the United Theater on Broadway will be included in the program, Spotify said in its statement.

“Independent venues are the heartbeat of live music,” said Rene Volker, Spotify’s senior director of live music. “They’re where artists take risks, build devoted communities, and where fans discover what they’ll love for the rest of their lives.”

Spotify’s history in the music industry is complex, and it has previously faced some criticism over how it compensates artists whose songs stream on its platform.

Bill Werde, the director of Syracuse’s recording and entertainment industries program, said Spotify’s support for indie musicians could help them during a difficult time.

“It costs money to market, to collect good data and to do most of the things required to break through in today’s attention economy,” Werde said in a statement. “This creates a disadvantage for smaller music companies and smaller artists, who may not have the resources of larger acts and larger venues.”