Spotify Quarterly Earnings Takeaways

Spotify Quarterly Earnings
Tuner Inc

The Spotify Quarterly Earnings report showed an astonishing amount of Subscribers. Currently Spotify Premium has 113 million subscribers and 141 million ad-supported subscribers “free version”. It is clear that Spotify is staying ahead of Apple music and Amazon in engagement and reach. Spotify is really honing in on their brand expansion across new markets such as Latin America and India. The brand is being baked into the advertising and expansion of artists in these new markets. 

By getting behind the artists Spotify is able to become intertwined to the local culture and talent pipeline related to music. Spotify is strategically aligning with large corporations such as Google to try to become fully integrated into peoples lives (homes, cars, etc.). The Spotify Quarterly Earnings Report expands upon the promotion of Family Plan Subscribers getting a free Google Home simply for being a subscriber of Spotify. By partnering strategically with large corporations and the focus on joining the cultures of markets they are entering; Spotify has been able to capture bright future prospects for users and their experience on the app.  Spotify for Artists has been a hit for artist trying to Partner and gain tools from Spotify. This is another example of Spotify trying to integrate their brand into creators and consumers minds alike. 

One area Spotify saw a surprising growth on their platform and positive effects as a result was Podcasting. Over 14% of Monthly Active Users also listed to at least one full podcast episode. Although it is early in the days of podcasting, Spotify is proving to be a destination for creators and listeners alike. Spotify is also pulling a play out of Netflix’s book by focusing expanding their own generated content for podcasts including investing in the hosts themselves. This is a genius moves that allows the brand of Spotify to continue to be looked at as a fully integrated audio-technology company. The podcasting industry as a whole is still in its infancy; as the market expands massively over the next ten years Spotify will be in place to capture the most incremental value. Spotify in this quarter alone saw 22 of their own shows launch with tremendous engagement. 

Subsequently, Spotify is expanding usable tools and dashboards for podcast producers to attract new producers towards the platform. This theme is evident in the previous aquisitions of companies such as Anchor, SoundBetter, and Gimlet. Apple Music and Amazon music have not laid the infrastructure that Spotify has for future capturing on a quickly expanding medium. Spotify is without a doubt ahead of the game when laying the infrastructure for the future of audio and the experience around it. Competitors have been unable to match the velocity of Spotify’s moves on emerging markets due to the nature of music as well as some wit/experience. The app experience of course always brings people back to the best music listening experience possible allowing for massive leverage for Spotify and where they want to steer the industry. 

Music Streaming is a Democratizing Force

Music streaming - Brassroots
Brassroots

Streaming has opened up so many doors in today’s technological world for listeners. Back in the day you used to have to burn a CD, buy a physical record, use a cassette tape, illegally download the song, or more recently go straight to iTunes and pay for it. Companies like Spotify, Amazon, and Apple are the reasons why we can stream so effortlessly due to the powers of the internet and the colossal effect of on-demand streaming. Streaming not only opened up many doors for listeners like you and me, but also for artists, record labels, and people trying to get more exposure through music.

The music streaming industry has had a lag compared to the after effects of internet on many industries. The internet brought great innovation and great changes to the world, but the music sector was one of the last to be effected. Although the music industry was one of the last mediums that really had a profound effect due the internet, it’s all catching up! The industry has changed forever due to music streaming. Every vertical of the music industry is learning just how effective and improved music consumption is now compared to the legacy system. The idea of discovering and recommending music used to be hard to find. The only way for this back in the day was at social gathers, a car ride “i.e cassettes”, radio, or more formally word of mouth.  Now you can be in your living room or in your bed, finding the next inspiring song that can get you motivated to attack the day.

Spotify offers you recommendations of new artists and like-minded music on their platform. The genius comes when you listen to music you like; naturally without any additional work, Spotify can recommend music to you that you will actually enjoy thanks to their advanced algorithms. Previously you would have never heard this music elsewhere, whether it’s because of geographic position or the lack of time to go through every song in a catalog across every artist in the world. Music streaming made this process condensed; you listen to a song and magically, a song thats similar pops up next. Playlists that had never been congregated before are simply waiting for us to press play. Music streaming is a generational democratizing force. People sometimes feel as if Spotify is charging too much, or that they aren’t paying the artist fairly. This is inherently bogus.

Spotify democratized music for artist, listeners, and everyone else involved in music streaming including legacy music businesses like record labels. Artists can simply record and using a couple clicks get their music uploaded to Spotify. Previously artists may have had to go through multiple record labels before getting their song on a single radio station. The artist had to be ultra-creative to get their song heard by someone in the first place. We have all heard one-hit wonders previously, but now content like Old Town Road or Gangnam Style is easily shared across borders. This not only make our lives better, but also makes the artist’s life better forever. One song can change the world; companies like Spotify & Apple show us this on a daily basis and built business models around this theme.

There hasn’t been a day that I’ve woken up and listened to a song and it not have changed my mood for the rest of the day. Music can put us in a better state of mind; it is one of the few things that connects us to our ancestors of eons past. Another huge democratizing effect of music streaming is people controlling what they listen to at all times. It’s innate in every human to want to control the experience they are living at least to some extent. With music specifically people want to control what they are listening to. The radio is great whenever there is no other music coming inbound; the radio picks up invisible airways out of thin air and is able to play music for you, a miraculous feat of technology. However, it’s obvious the next inevitable innovation after that should allow for an on-demand music selection of any song on any catalog across the world.

Spotify allowed for this to happen. When people can express themselves through their music selection, you can find out more about those people, their cultures, and the way they are living the human experience. Music streaming is only going to exponentially expand, because it has the great effects of the internet and human psyche behind it. At Brassroots we see music streaming in the future being a high bandwidth experience in a connected fashion.

We have seen this theme with social media companies of the past. People want to be together and express feelings to each other by sharing their version of the human experience. The best way to do that is through music! Right now music is stationary. You listen to a song , press pause/pay, then it’s over. You can’t share that experience with someone else unless you live together, are at a concert, or an event. That’s all changed with Brassroots. You can have a collaborative music experience with anyone in the world from your living room. Collaborative music streaming can be as easy as just listening to a song. I think the world and more importantly, individuals love to connect through one of the best mediums known to humankind, listening to music. There’s no telling the heights music streaming will reach in the future, but it’s definitely still in its earliest days. We should be excited for the future of music, it is just getting started.