Spotify Technology (Links to an external site.) SA SPOT +0.27% (Links to an external site.)unveiled plans to vastly expand its global presence by launching in 85 more markets across Africa, Asia, Europe, the Caribbean and Latin America.
The streaming company aims to collect millions more music and podcast creators in addition to listeners with new programming as well as tools and functionality. Spotify will be available in 36 additional languages in adding markets that represent access to more than one billion people.
In a streamed event on Monday, the Stockholm-based company showcased top executives, artists and celebrities—including Billie Eilish, J Balvin, Prince Harry and former President Barack Obama —to outline its plans. The event touted its growth over the past decade (Links to an external site.) and pointed to the opportunity to feed its “flywheel” with new content and new listeners.
“Superstars today are way bigger than they’ve ever been before, but also the number of new niches are extraordinary around the world,” Daniel Ek, Spotify’s chief executive, said in an interview after the event.
The expansion from 93 to 178 markets represents Spotify’s biggest market expansion since the company launched in Sweden in 2008. It said more than 80% of creators on its platform are heard outside their home markets. The new regions add to major launches in India, Russia and South Korea over the past two years. Spotify said the expansion will accelerate discovery of more music genres, such as reggaeton and K-pop.
Spotify ended last year with 345 million monthly active users, and 155 million paying subscribers. But as places like the U.S. come nearer to saturation in the number of people who will pay for music, new markets are important for Spotify’s growth. The music business is counting on such expansion to continue making money from digital streaming of music and podcasts (Links to an external site.). Such areas didn’t contribute meaningfully to revenue for the industry when music was distributed and sold physically.
Spotify said it paid out more than $5 billion in 2020 to creators. The company said it had more than eight million music makers and podcasters on its service, which is available on more than 2,000 different devices from smartphones and smart speakers to in-car and gaming consoles.
Mr. Ek said the company expects that by 2025 Spotify will have as many as 50 million creators “whose art is enjoyed by one billion users around the world.”
Since Spotify’s investor day ahead of its initial public offering in 2018, Mr. Ek has repeated that the company’s mission is to give “a million creative artists the opportunity to live off their art.” Over the past four years, the number of artists whose catalogs make more than a $1 million a year from streaming on Spotify rose 82% to more than 800.
“If the creative economy is going to thrive, we need to ensure audio creation can be a profession and not just a side project,” Mr. Ek said during the company’s presentation.
On Monday, the company said 90% of monthly streams come from 57,000 artists, up from 43,000 last July and quadruple the number from six years ago.
Billie Eilish, left, with Finneas, was one of the artists Spotify showcased while outlining its expansion plans.
PHOTO: SPOTIFY STREAM ON
Spotify also unveiled updates to its “two-sided marketplace (Links to an external site.),” where it sells tools, marketing and analytics to creators. To date the biggest tool for music has been sponsored recommendations—or “Marquee”—which allow labels to pay to deliver push notifications. These messages can promote new music by artists that a given user has listened to previously. On Monday, the company said it would launch a self-serve buying marketplace for Marquee, enabling virtually any artist to use it.
The company also said it would introduce later this year Spotify HiFi, high-resolution streaming audio for premium subscribers. The company didn’t disclose pricing for high-fidelity streaming, but listeners will likely have to pay a few dollars a month more than a regular subscription. The feature, oft-requested by listeners, could help Spotify boost its average revenue per user, which has been falling since the company has attracted many new subscribers via discounted plans. It also charges lower prices in new, less-developed markets. Still, in recent months Spotify has been raising prices in some places around the world.
Spotify highlighted some of its new podcast programming, noting it plans to add to its fiction and nonfiction realms. The event gave listeners a preview of the new podcast “Renegades: Born in the USA,” a conversation between Mr. Obama and Bruce Springsteen. It also showcased its forays into superhero franchises with a teaser for its deep dive into the mind of Batman in the “Batman Unburied” podcast, the product of a partnership announced last summer (Links to an external site.) with Warner Bros.’s DC. Spotify announced a new partnership with Anthony and Joe Russo’s entertainment company AGBO, which is behind several Avengers films.
In a nutshell, tell me what’s going on with Spotify and growth.
What do you think about what Spotify is doing? Based on your global marketing readings and this article, why is global growth so important to Spotify and other brands?
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