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Spotify’s share price rose 12.7% to $112.71 on Tuesday (Jan. 31) following the company’s earnings release for 2022’s fourth quarter earlier in the day.
Now with a market capitalization of $21.8 billion, Spotify has more than overcome the investor exodus following its underwhelming third-quarter earnings results. After delivering a weaker-than-expected gross margin on Oct. 25, Spotify’s share price fell 13% to $84.42 and bottomed out at $69.29 on Nov. 4. Tuesday’s closing price marked a 62.7% improvement in fewer than three months.
Investors want Spotify to continue adding subscribers while improving its margins. Tuesday’s earnings results delivered on both fronts. Its fourth-quarter subscriber growth of 10 million handily beat guidance of 7 million, giving the company 205 million subscribers globally. The company’s monthly active user base of 489 million was 10 million ahead of guidance.
In the fourth quarter, Spotify’s gross margin of 25.3% was 80 basis points — eight-tenths of a percentage point — above guidance “due primarily to lower podcast spend along with broad-based favorability in our core music business,” said CFO Paul Vogel during Tuesday’s earnings call.
Spotify’s licensing deals with record labels and publishers give it little room for improvement on recorded music margins, which were 28% in 2021. Podcasting, however, gives Spotify an opportunity to attract advertising dollars with meaningfully better margins. During a June 2022 presentation to investors, Spotify executives said they expect podcast margins to reach 30-35% within three to five years and 40-50% further in the future.
Just last week, investors were shown a new commitment to cost-cutting when Spotify announced on Jan. 23 that it would lay off 6% of its global headcount. Among the departures — though technically not part of the layoffs — was chief content officer Dawn Ostroff, the engineer of the company’s strategy to build its podcast business by attracting marquee names such as Joe Rogan, Kim Kardashian and Barack and Michelle Obama. Her exit could signal an end to an era of expensive content deals that helped make Spotify the most popular podcast platform in many markets.
For the first quarter of 2023, Spotify forecasts 3.1 billion euros ($3.37 billion) of total revenue and gross margins of roughly 25% excluding severance charges, and an operating loss of 194 million euros ($211 million), including 35 million euros to 45 million euros ($38 million to $49 million) in severance charges.
“Gross margins and operating expenses are expected to improve throughout the year,” said Vogel, adding that first-quarter margins will be the low point for 2023 because “some of the investments we made in the back half of [2022] is still slightly impacting Q1.” In addition, with the recent 6% reduction in headcount, “we see our operating expenses growing slower with a material improvement in our operating loss compared with 2022,” he added.
Spotify CEO Daniel Ek stressed his company’s focus “on tightening our spend and becoming more efficient” in the company’s fourth quarter earnings call on Tuesday (January 31) — the first such call since Spotify announced it was laying off 6% of its global workforce.
In a statement following the layoff announcement, Ek wrote that “in a challenging economic environment, efficiency takes on greater importance.” And the idea of “efficiency” was hammered home again and again on the latest earnings call — the word was sprinkled liberally throughout the remarks of both Ek and CFO Paul Vogel. “The next era of Spotify is one where we’re adding speed plus efficiency,” Ek said, not one “just focused on speed or growth at all costs.”
But he also emphasized that “this doesn’t mean that we’re changing our strategy” overall. “We will continue to work to build the platform of the future,” Ek vowed, “and that will take investment in new opportunities that we outlined, like podcasts and audiobooks.”
While Ek acknowledged that Spotify “probably got a little carried away [in 2022] and over-invested relative to the uncertainty we saw in the market,” he said that, given the choice, he “would do it again.” According to Ek, not only did that investment help grow Spotify’s user count — the company added premium subscribers at a higher-than-expected rate — but it helped differentiate Spotify from its competitors.
Responding to a question about how Spotify was working to compete with TikTok, Ek said “we’re in a better position competitively than we’ve been for many many years.” By adding podcasts and audiobooks to Spotify’s music offering, he added, the platform has created “a much more resilient consumer experience.”
While Ek had said Spotify was exploring raising U.S. subscription prices during an earnings call last year, he said “I don’t have anything specific to announce at this point” on Tuesday. But he noted that the platform raised prices in “more than 40 markets around the world” last year and that “our priority is to grow revenue as fast as we possibly can.”
When asked about potential price increases a second time, Ek responded that “we’re thinking how we can grow our business the best possible way.” “Sometimes that is keeping the price low to grow the number of users on the platform,” he continued. “Sometimes it is increasing the revenue per user. Sometimes it’s increasing our margin per user… the important part is that this is something that creates win wins with our label partners too.”
Investors asked Spotify for additional information about two 2022 initiatives, its moves into audiobooks and selling concert tickets, but company executives were scant on specifics. “It’s early days on audiobooks,” Ek said. “We’re seeing some encouraging signs. We’re definitely seeing people take up the offering.” He added that “audiobooks have a massive opportunity and there are very few consumers currently participating in the ecosystem,” echoing his comments from Spotify’s 2022 Investor Day.
When it came to Spotify’s nascent live events business, Ek underscored that his company isn’t aiming to “go compete with the [existing live music] ecosystem.” Instead, he said, Spotify hopes to “enable the ecosystem.” “Users are asking us, ‘help me find more great things to go watch,’” Ek explained. That translated to a “tremendous uptick in the number of people visiting the concerts tab on Spotify in 2022.”
“If we can be a partner to creators and help them sell more of their tickets,” Ek added, “that’s a meaningful increase to many artists’ livelihood, which is great and something we’re focused on.”
Spotify ended 2022 with 205 million subscribers, annual revenue of 11.7 billion euros ($12.4 billion) — up 21% from 2021 — and an acknowledgment that “things change” regarding the company’s bold investment in podcasting and its recent “tightening” of spending.
“In hindsight I probably got a little carried away and over invested relative to the uncertainty we saw shaping up in the market,” said CEO Daniel Ek in an earnings call with investors on Tuesday (Jan. 31). “So we are shifting to tightening our spend and becoming more efficient.”
Ek added that “it was the right call to invest and I would do it again” because it set the company apart from competitors, but the souring macro economic environment requires them to pull back. “To be clear this doesn’t mean we are changing our strategy,” he asserted.
The company spent hundreds of millions of dollars acquiring exclusive rights to podcast programming (see: Joe Rogan, Prince Harry and others) and startups, but in recent months began eliminating some original shows and trimming staff at its Parcast and Gimlet studios. Earlier this month, Spotify announced it would shed 6% of its workforce, roughly 600 employees. It also canceled numerous shows that it had been promoting on its separate Spotify Live app.
“You go for growth first and then you seek efficiency,” Ek said.
Elsewhere in the call, the company laid out its fourth-quarter results, with revenue of 3.166 billion euros ($3.38 billion), representing 18% growth year-over-year. Subscription revenue was 2.7 billion euros ($2.88 billion) of that tally, a 18% increase year over year. Advertising revenue was 449 million euros ($479 million), up 14% year over year. Its user base grew to 205 premium subscribers, up from 195 million in Q3, and 295 million free (ad-supported) users, up from 273 million. Total monthly active users (MAUs) have hit the 489 million mark, up from 456 million last quarter.
Average revenue per user was 4.55 euros ($4.85) in the fourth quarter, down slightly from 4.63 euros ($4.94) in the third quarter. Excluding the impact of the foreign exchange market, Spotify attributed the change to a “product and market mix.”
Spotify’s gross margin of 25.3% — 80 basis points above guidance, the company said — was slightly better than the 24.7% registered in the third quarter but still a full percentage point below the 26.5% in the prior-year period. The company attributed the change to “lower investment spending and broad-based music favorability.”
Spotify reported an operating loss of 231 million euros ($246 million), up from 228 million euros in Q3 and a 7 million euro loss back in Q4 2021. A slew of higher personnel costs due to headcount growth — that has since been halted (except for internships) — and higher advertising costs, as well as currency movements, was cited for the rise in losses during the quarter. The company also said that its business has more than 3.4 billion euros ($3.6 billion) in liquidity and that its free cash flow was actually in the negative in the quarter — by 73 million euros — but that for the full year the company ended with 21 million euros ($22 million).
Financial Metrics (Q4 2022 vs. Q4 2021)
Revenue: 3.166 billion euros ($3.38 billion), up 18% year over year from 2.689 billion euros
Gross margin: 25.3%, compared to 26.5% the prior-year quarter
Operating loss: 231 million euros, up from a 7-million euros loss
Free cash flow: 73 million euros, down from 103 million euros
Listener Metrics (Q4 2022 vs. Q3 2022)
Paid subscribers: 205 million, up 5% from 195 million in Q3
Ad-supported listeners: 295 million, up 8% from 273 million in Q3
Total monthly active users (MAUs): 489 million, up 7% from 456 million in Q3
Average revenue per subscriber: 4.55 euros, up from 4.63 euros in Q3
Q1 2023 Guidance
Revenue: 3.1 billion euros
Subscribers: 207 million
MAUs: 500 million
Gross margin: 24.9%
Operating loss: 194 million
Muni Long released the Spanish version of her single “Hrs & Hrs” on Monday (Jan. 30) as part of her new Spotify Singles.
With The Avila Brothers taking the reins on production, the Spanish-language track finds the rising R&B star asking, “¿Pero te puedo cantar…en español?” (i.e. “But can I sing to you…in Spanish?”) before launching into the sultry groove.
“Lo tuyo, es mío, ahora/ Puedo hacer esto por horas/ Sentar y hablarte aquí por horas/ Regalarte unas rosas/ Nos bañamos en las olas/ De champaña y una cena/ Pero eres tu que me devoras,” she croons, roughly translating the sentiments of the 2022 slow jam, which was named one of Billboard‘s best R&B songs of the last year.
As part of the Spotify Singles, Long also gave The Carpenters’ 1971 classic “Superstar” a rhythmic spin, not unlike Luther Vandross’ famous cover, singing, “Long ago and oh, so far away/ I fell in love with you before the second show/ And your guitar, it sounds so sweet and clear/ But you’re not really here, it’s just the radio/ Don’t you remember, you told me you loved baby/ You said you’d be comin’ back this way again, baby/ Baby, baby, baby, baby, oh baby/ I love you, I really do.”
Long is currently nominated for best new artist at the upcoming 2023 Grammy Awards, while “Hrs & Hrs” picked up nods for both best R&B performance and best R&B song. Ahead of the telecast this Sunday, she was celebrated with a special event at the Grammy Museum.
Stream Long’s “Horas y Horas” and her “Superstar” cover below.
Spotify has launched a new playlist to amplify the voices of Iranian women, who have for the last four months have led the fight towards human rights in Iran.
The playlist, titled “Women of Iran,” includes songs by iconic Iranian singers, including Googoosh, Mahasti and Hayedeh, alongside artists like Shervin Hajipour and Toomaj Salehi, who were both arrested and imprisoned after sharing music in support of the fight against the Islamic Republic’s injustices. Hajipour, who received a whopping 95,000 submissions for The Grammys’ new best song for social change award, was released following international pressure back in October.
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“The Academy is deeply moved by the overwhelming volume of submissions,” said Recording Academy CEO Harvey Mason Jr in a statement. “While we cannot predict who might win the award, we are humbled by the knowledge that the Academy is a platform for people who want to show support for the idea that music is a powerful catalyst for change.”
After his October arrest, 32-year-old rapper Salehi has remained in police custody and is at risk of receiving the death penalty, according to BBC.
As a part of the playlist launch, Spotify is utilizing their playlist clips feature, which are likened to “stories” connected to a playlist, providing a platform for Iranian musicians, comedians, designers, producers and more to speak on topics like culture, art, creative process and the importance of freedom of expression. The playlist also includes diasporic Iranian artists, including Rana Mansour, Snoh Aalegra, and Iranian-Dutch singer Sevdaliza, who has released a number of songs in support of the ongoing revolution in Iran.
Stemming from the death of Mahsa Amini at the hands of Iran’s “morality police” but rooted in over 40 years of oppression, the current Iranian revolution begun in late September and has resulted in over 500 deaths officially, although some human rights groups estimate the number to be over 5,000. The number of individuals arrested spans beyond 20,000, while four known executions have taken place, with many more estimated to come.
International uproar has ensued since the start of the protests, with government officials and global stars alike speaking out on the brutal injustices taking place under the authority of Iran’s Islamic Revolutionary Guards Corps. Justin Bieber, Kim Kardashian, Samuel L. Jackson, Jason Momoa, Britney Spears and Bella Hadid are among the celebrities who have used their platforms to bring awareness to the ongoing fight, while a massive show of international solidarity led to a vote in the United Nations to remove Iran from the Commission on the Status of Women.
In Iran, kissing and hugging in public, women singing and dancing in public, among other basic acts, are illegal. Women also face discrimination in matters regarding marriage, divorce, inheritance and decisions relating to children. Members of a number of religious groups, including Baha’is are heavily persecuted in Iran, considering that Zoroastrians, Jews and Christians are the only recognized religious minorities. These human rights violations, along with income inequality and lack of freedom of expression has brought the Iranian public to their boiling point time and time again.
While there is no end in sight, the playlist’s creator Leila Kashfi emphasizes the importance of keeping the voices of Iranians alive, writing on Instagram, “For decades, the Islamic Republic has forced Iranians to suppress the beauty of Persian culture – a culture founded thousands of years ago in music, dance, romance, & tolerance. The [Islamic Republic] targets artists because music fuels revolution.”
Check out the playlist below.
Give her all the flowers…again! On Thursday (Jan. 26), Miley Cyrus‘ “Flowers” became the most streamed song in a week in Spotify history for the second week in a row.
The streaming giant used Twitter to share the news, writing “It’s official…The record has been broken by @MileyCyrus herself on January 26, making #Flowers the most streamed song in a single week in Spotify history.”
While Spotify didn’t share specific numbers, the hit single first achieved the feat in the week of Jan. 19, making it all the more impressive that Cyrus managed to outdo herself for a second consecutive week after also debuting in the previous frame at No. 1 on the Billboard Hot 100.
The success of “Flowers” has also boosted all the other songs in Cyrus’ proverbial garden of hits, with her entire discography from “Wrecking Ball” to “Midnight Sky” making a truly remarkable 65 percent gain in the week ending Jan. 19 according to Luminate — from 20.7 weekly million official on-demand U.S. streams to 34.2 million. It also fed the streaming numbers of Bruno Mars’ “If I Was Your Man” — which “Flowers” slyly plays on without sampling or interpolating any of the No. 1 torch song melodically.
After the song bloomed at No. 1, Cyrus tweeted a note of gratitude to her fans, writing, “Thankful that Flowers is Number 1 around the world. This song is dedicated to my fans & the steadfast self love I wish for each of you. Forever grateful, Miley.”
Check out Spotify’s announcement about “Flowers” record-breaking second week below.
Grouplove signed with Glassnote Records ahead of their sixth album, which is due out this year. “We just made the best album of our career and on our first call with Daniel, we could immediately tell that he agreed,” said the band in a statement. “Glassnote has so many amazing artists we respect and admire and we are so proud to call it our new home.”
B2B distributor FUGA, a division of Downtown Music, struck a distribution deal with Marathon Music Group that will see Marathon utilizing FUGA’s global digital and physical distribution offering for its own roster and all labels under the group’s umbrella, including Moves Recordings, New Soil, Mahogany and DMY. Marathon will also have access to other FUGA services including marketing, enhanced trends and analytics, synch and brand partnerships, YouTube services and audience strategy.
Spotify added over 10,000 Arabic songs to its platform via a new licensing deal with Rotana Music for the label’s full catalog. The songs will be available to Spotify users in Algeria, Armenia, Azerbaijan, Bahrain, Chad, Comoros, Cyprus, Djibouti, Egypt, Georgia, Iraq, Jordan, Kuwait, Lebanon, Mali, Mauritania, Morocco, Niger, Oman, Pakistan Palestine, Qatar, Saudi Arabia, Tunisia, Turkey and the United Arab Emirates. Spotify will provide on-platform support by introducing “This is Rotana,” a destination that will serve as the home for some of the label’s most popular songs.
Music strategy and supervision agency Premier Music Group closed its second round of financing led by MEP Capital, which will join Premier’s board of directors. The investment will power Premier’s ongoing acquisitions, including, most recently, sonic identity and sound design firm We Are Listen. Premier, which did not disclose the dollar amount of the current round, was advised by Arnaud Levy at Qualia Legacy Advisors.
ASM Global‘s Tech Port Center + Arena in San Antonio has been renamed Boeing Center at Tech Port. Additionally, Boeing entered a seven-year partnership with the Kelly Heritage Foundation — an educational nonprofit affiliated with Port San Antonio, on whose behalf ASM Global manages the arena — to expand STEM learning and workforce development in South Texas via a $2.3 million investment from the aerospace company.
Music technology platform Orfium — which provides software, data and licensing solutions to the entertainment industry — acquired music cue sheet reporting and audio recognition company Soundmouse. “Over the past 20 years, Soundmouse has been building and setting the standard in cue sheet management and monitoring for the broadcast and entertainment production space,” said Soundmouse co-CEO Charles Hodgkinson in a statement. “Combine that with Orfium’s expertise in UGC tracking and claiming for publishers, labels and production music companies and we bring the worlds of digital and broadcast together in an integrated way.”
RECORDS Nashville, Barry Weiss‘ joint venture with Sony Music Entertainment, signed the James Barker Band. The group’s first single under the label, “Meet Your Mama,” drops Friday (Jan. 27). Comprised of James Barker, Taylor Abram, Connor Stephen and Bobby Martin, the band is signed with BOOM Music Group for publishing and Starseed Entertainment for management.
Live entertainment and concert production company Décibels Productions has acquired a majority stake in Olivier Gluzman‘s French talent agency Les Visiteurs du Soir (Rufus Wainwright, Angélique Kidjo, Pink Martini). The deal will allow Les Visiteurs du Soir artists to “tap into [Décibels’] production skills and global network,” said Gluzman in a statement. Morgan Production, the audiovisual company and festival organizer that first invested in Les Visiteurs du Soir in 2011, will remain a key stakeholder in the agency.
Sony Music and Todd Moscowitz‘s new artist and label services company Santa Anna signed a distribution agreement with indie label Listen to the Kids (Yeat, Alexander 23, Ericdo, Sally Bossa). Under the deal, Listen to the Kids’ roster will have access to Santa Anna’s marketing, distribution, legal and promotional support, among other services.
Big Loud Records artist Mackenzie Porter (“Thinking ‘Bout You,” “Pickup”) signed with CAA. She will be represented by the agency’s Bennett Beckner and Jeff Krones.
Riser House Records artist Meghan Patrick signed with WME for global representation and Make Wake Artists — where she will work with Chris Kappy and Randi McFadden — for management. Patrick released her new song “She’s No Good For Me” on Friday (Jan. 20).
Compass Records Group signed alt-country artist Robbie Fulks, who will release a new studio project on the label this spring. Fulks is ramping up for a U.S. tour that kicks off in April.
Kelsey Hart signed with Curb Records; he previously signed to Curb | Word Music Publishing as a songwriter for artists including Jake Owen, Dylan Scott and Trace Adkins. The label recently released two songs from Hart: “Forget to Remember You” and “My Daddy’s Fault.”
Nettwerk signed producer Donovan’s Playground, a new project from Fallen Roses member Donovan Ferra; Smile High, the solo project of Ben “Smiley” Silverstein of The Main Squeeze; and Malaysian alt-pop artist A Kid Named Rufus. The label will soon release Donovan’s Playground’s debut album To My Past Self, Smile High’s EP Snack Pack and Rufus’ single “Eighteen” featuring Cole Bauer.
Matador Records signed Brooklyn duo Water From Your Eyes and will release their new album in the first half of the year. Water From Your Eyes will host a weekly live residency in New York throughout the month of March leading up to the release.
Six months ago, in an email to staff, Spotify CEO Daniel Ek said that the company would “be a bit more prudent” in its hiring over the next few quarters. That came a week after Spotify’s June 8, 2022, investor day presentation on its plans to improve its margins.
The key would be podcasts, executives said, along with a new foray into audiobooks. Within three to five years, podcasts could bring in gross margins of 30-35%, which could later rise to 40-50% — far more than the company can earn from recorded music.
The company’s podcast business hasn’t come cheap, though. Spotify – which on Monday (Jan. 23) announced plays to lay off 6% of its workforce, as well as the voluntary departure of chief content officer Dawn Ostroff – spent hundreds of millions of dollars acquiring podcast start-up and programing. Ostroff spent big to get exclusive rights to The Joe Rogan Experience, as well as projects from Barack and Michelle Obama’s Higher Ground Productions; Kim Kardashian; and Prince Harry, Duke of Sussex, and Meghan Markle.
From a programming perspective, the podcasts worked. Spotify is now the most popular podcast platform in the U.S., as well as many other markets, and the exclusive programming helps attract advertisers. The company also introduced new podcast advertising formats that helped it grow its podcasting business to $200 million annually.
The podcasts didn’t solve Spotify’s financial issues, though. The company has always grown fast by any measure, including audience, subscribers, and revenue. But since it paid out a significant share of its revenue to labels and publishers, Spotify never had the profit margins of former Wall Street darlings like Facebook and Netflix. Podcasts were supposed to solve this, but they cost so much up front that they caused a $103 million drag on gross profit, CFO Paul Vogel said during the June presentation.
Last year was difficult for stocks in general, especially those of many technology companies, but Spotify has suffered more than most. Riding high on lockdown-time gains, its share price peaked at $364.59 on Feb. 19, 2021. By a year later, it had fallen 58% to $152.27, and then on Nov. 4, 2022 bottomed out at $69.29 — 81% below its all-time high closing price. Had it made more progress on improving margins, Spotify’s share price probably would have weathered the storm a bit better.
Now, the market will find out if the adage “to cut is to cure” applies to the music streaming business. The layoffs Spotify announced Monday will involve around 600 employees. Not among them is chief content officer Dawn Ostroff, who chose to depart the company. Alex Norström, currently chief freemium business officer, will be responsible for product and will share co-president title with Gustav Söderström, currently chief research & development officer.
Citi analyst Jason Bazinet believes the layoffs are about “trying to stem the losses in podcasting.” Investors aren’t convinced Spotify has a viable business model, he says. “The revenues have done well but there’s not a lot of cash flow. A lot gets paid back to the labels.”
The market’s response to the news was positive, but muted. Spotify shares closed on Monday at $99.94, up 2.1%, after spiking to $104.00 that morning.
Overall, podcasting doesn’t seem to be working as well, or as quickly, as Spotify had hoped. While Spotify beat expectations for subscribers and monthly active users in the third quarter, its gross margin and operating loss were below earlier guidance.
The podcast business is an obvious place for Spotify to start cutting. The company began paring expenses in October by eliminating some original podcasts and cutting “at least” 37 positions at its Parcast and Gimlet studios.
“I think it’s the right strategy,” says Bazinet. “It’s going to be difficult to shift the balance of power with record labels.”
Now, the goal is to make Spotify more efficient, according to CEO Daniel Ek’s open letter released on Monday. “In hindsight, I was too ambitious in investing ahead of our revenue growth,” Ek wrote – meaning investing in personnel, not companies. The layoffs, as well as an organizational restructuring, will both control costs and quicken decision-making, he explained. Ek isn’t alone in highlighting efficiency lately. Facebook CEO Mark Zuckerberg has taken a hard line on underperforming employees. New Twitter CEO Elon Musk expects whatever workers remain at the company to be “extremely hardcore.”
Spotify’s numbers suggest that the company may have room for improvement. Bazinet points out that in 2016 Spotify’s roughly 2,100 employees generated an average of 1.41 million euros per person while in 2021 its 6,600 employees’ per-head revenue was 1.46 million euros. That implies that Spotify failed to achieve the kind of operating leverage that would create additional value as it added employees.
As for Ostroff, her departure could mark the end of the first chapter of Spotify’s podcast business. Neither Spotify nor investors seem to have much appetite for writing big checks these days. And exclusive content seems to have an inherently limited life span. Obama’s Higher Ground Productions left for Amazon. Brené Brown’s two exclusive podcasts, Unlocking Us and Dare to Lead, have come to an end.
Ostroff certainly made her mark on the company, though. The Joe Rogan Experience has battled through controversies to become the platform’s most popular podcast, heard by a quarter of Spotify users; and 19% of all podcast listeners in the U.S. listen to TJRE, according to a recent Morgan Stanley survey. Kardashian’s true crime podcast got off to a great start in October by beating TJRE and Markle’s Archetypes. Spotify’s foray into spoken-word audio may have been costly, but it was effective.
Now, Spotify enters a new phase of cost conscientiousness. With the layoffs and reorganization, it has given investors a tangible commitment to deliver on the aggressive goals it laid out in June. That heightens expectations, though. If Spotify can’t maintain its growth with a slightly smaller headcount, it will be hard for it to deliver better margins – and the market is unlikely to be forgiving.
The LGBTQ community has a long history of influencing music history for the better — be it through the creation of whole genres, the success of mainstream queer artists or otherwise. Now, Spotify wants to help amplify that influence.
On Tuesday (Jan. 24), the streaming service debuted their latest music program, GLOW. The project — much like fellow equity global music programs EQUAL and Frequency for female and Black creators, respectively — is specifically catered to LGBTQ artists, aiming to “elevate LGBTQIA+ creators, both on and off platform,” according to Spotify.
To fulfill that goal, GLOW will have a year-round hub on the platform housing LGBTQ-dedicated playlists for fans to discover new music from queer-identifying artists, with new playlists set to be introduced each month. One of these playlists is a global flagship playlist of the same name, featuring LGBTQ voices from around the world and refreshing each month with new offerings.
As with previous equity programs at Spotify, GLOW will also benefit from a “360 program,” which will provide opportunities for editiorial and marketing partnerships with other major brands as well as providing charitable giving to organizations benefiting LGBTQ arts causes, including QORDS, Black Trans Femmes in the Arts (The BTFA Collective), It Gets Better and more.
GLOW will additionally shine a spotlight on different LGBTQ artists every month, with 11 — including Sam Smith, Arlo Parks, Tove Lo and Pabllo Vittar — showcased at launch. Future spotlight artists will be featured on Spotify’s For the Record editorial channel as well as on a Times Square billboard.
Cahleb Derry, an associate manager of music marketing at Spotify, said in a statement that the aim of GLOW was to provide needed support for a community that often doesn’t receive it. “The question we go back to is, ‘How do we tangibly influence the resources that LGBTQIA+ artists have?’” he said. “We know that a lot of artists only get hit up in June during Pride to do campaigns. And then July 1 hits and there’s no work to be found again … we, at Spotify, have a responsibility as the largest music audio platform in the world to fill in these gaps.”
The GLOW launch is a bright spot that comes amid Spotify’s announcement on Monday that they would be cutting 6% of their global workforce and that chief content & advertising business officer Dawn Ostroff would be departing her role. “I hoped to sustain the strong tailwinds from the pandemic and believed that our broad global business and lower risk to the impact of a slowdown in ads would insulate us,” Daniel Ek said in a note to employees posted on the company’s website. “In hindsight, I was too ambitious in investing ahead of our revenue growth.”
Check out the official GLOW Spotify hub here.
Spotify’s Dawn Ostroff praised the growth of the audio giant’s podcasting expansion shortly after CEO Daniel Ek revealed a major leadership reorganization on Monday morning that will see Ostroff exit the company.
The reorganization, accompanied by a round of layoffs that will impact roughly 600 employees, involves consolidating Spotify’s business operations under co-president Alex Norström, who most recently oversaw the company’s freemium business. Ostroff, who joined Spotify in 2018 from Condé Nast Entertainment, will transition to an adviser role before formally leaving the company as her divisions now fall under Norström’s purview.
In a note to staff, obtained by The Hollywood Reporter, Ostroff praised Norström and reflected on the growth and impact of Spotify’s podcasting team, writing that the platform’s original and exclusive shows — which includes hits like The Joe Rogan Experience, Call Her Daddy and the original series Caso 63 — account for roughly 20 percent despite representing about 0.05 percent of shows on the platform.
“I’m so proud that we’ve built a home for creators to bring their art to the world in ways no one could have previously imagined. And while I’m very much excited about my next step, working alongside and learning so much from so many of you has been a privilege,” Ostroff wrote. “The memories of the moments, the stress, and the laughter we shared have helped me grow and better appreciate the journey … and for that, I will always be grateful. I wish you every success on the next chapter of the Spotify story.”
Read the full memo below.
Looking back on the past four and a half years, I am incredibly proud of what we’ve built together. It’s our best-in-class music operation where we have strengthened our relationships across the business, earned the respect of the industry, and become great partners. The entire music team is the heart and soul of this company.
Working together, our podcasting team has revolutionized the space. This organization’s trajectory has been astonishing, going from practically zero market share and a handful of podcasts, to the leading platform with more than five million podcasts today and a 30x increase in podcast consumption on the platform. And I’m really proud of what we have built with our original and exclusive shows–despite being just .05% of the number of shows on the platform, they account for ~20% of consumption. This includes a string of hits that had Spotify O&E shows occupy 6 of the top 10, and 24 of the top 100 slots on our global charts in 2022. In addition, we’ve learned so much from creators about the opportunities in video as we’ve seen the numbers surge.
Over the past two years, we’ve modernized the advertising business to make it essential to brands and clients. And we have delivered, doubling our ad revenue to well over a billion euros in the process. The technology and innovation that the global ad and sales team has brought to market ensures that there will be billions more to come. That growth is set to change the marketplace forever, especially under the strong leadership of my dear friend Alex, who has my every confidence.
We’ve championed marginalized voices and worked to drive much-needed change in the audio industry. I’m so proud that we’ve built a home for creators to bring their art to the world in ways no one could have previously imagined. And while I’m very much excited about my next step, working alongside and learning so much from so many of you has been a privilege. The memories of the moments, the stress, and the laughter we shared have helped me grow and better appreciate the journey … and for that, I will always be grateful. I wish you every success on the next chapter of the Spotify story.
Dawn
This story was originally published on THR.com.