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Spotify has canceled at least six of its live audio shows as part of the audio giant’s latest round of programming cuts.
Included in the cancelations are Deux Me After Dark, a celebrity gossip show hosted by the anonymous creator known as Deux Moi; Doughboys: Snack Pack, a food show hosted by the comedians Nick Wiger and Mike Mitchell; The Movie Buff, a movie review show hosted by the comedian Jon Gabrus; A Gay in the Life, a current events and LGBTQ+ culture show from Teen Beach Movie star Garrett Clayton and writer Blake Knight; Taylor Talk, a Taylor Swift fan show hosted by Ellie Schnitt; and Lorem Life, a music show based on Spotify’s Lorem playlist hosted by Dev Lemons and Max Motley.
The cancelations, two of which were not previously reported, were confirmed to The Hollywood Reporter by a Spotify spokesperson.
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At least two deals for the Spotify Live shows were canceled midway through the creators’ contracts, according to a person familiar with the matter. A second source close to the matter said that all the contracts are being paid out in full, despite the cancelations.
The audio giant, which rebranded its live audio offering in April from Spotify Greenroom to Spotify Live, will continue to release live episodes from The Ringer MMA Show and The Fantasy Footballers, the latter of which struck a deal with Spotify earlier this year that included an extension of the show’s partnership with Spotify Live through the next three NFL seasons.
Other creators like Alex Cooper, whose Spotify Live show was promoted as part of the company’s live audio rebrand, have not continued hosting live episodes since launching their shows earlier this year. Cooper’s second and most recent live episode took place in April and was made available for on-demand listening on April 28.
The programming changes, first reported by Bloomberg, are the latest cuts from the audio giant, which recently canceled a total of 11 shows from in-house studios Gimlet and Parcast — 10 of which came to an end last month. The cuts have followed a similar model to cancelations in TV programming for broadcasters and streamers.
This article originally appeared in THR.com.
Not long ago, a placement on Spotify’s RapCaviar or Apple Music’s Today’s Hits playlists could ignite a single’s streaming numbers overnight. “Today’s Top Hits [32 million followers on Spotify] used to be the holy grail,” says one manager of several major-label acts. “Or even Pop Rising [2.7 million] — it was like, ‘If a song got on Pop Rising, it’s going to get to Today’s Top Hits and do 5 million streams a week.’ ”
But in 2022, the manager continues, “it doesn’t feel like that’s the case.” This realization is growing around the music industry. “The Spotify and Apple editorial playlists don’t have as much punch” as they did, agrees Kieron Donoghue, founder of Humble Angel Records and former vp of global playlists strategy at Warner Music Group. “The major streaming platforms are reacting to culture now rather than driving it,” adds Tatiana Cirisano, music industry analyst and consultant for MIDiA Research.
In a statement to Billboard, Sulinna Ong, global head of editorial at Spotify, countered that the platform’s “top five editorial playlists are followed by more than 80 million listeners — they’re wildly popular.” She added that the overall audience for playlists is larger than ever, “these listeners have increasingly diverse tastes, Spotify is meeting that consumer demand, and, as a result, more artists are being discovered.” A representative for Apple Music declined to comment for this story.
But managers sound nearly misty-eyed when they reminisce about the streams that some editorial playlists once generated. “There used to be a world where an unknown artist would get the cover of the Fresh Finds playlist [on Spotify] and they would get between 60,000 and 100,000 streams a week,” says one manager who works primarily with developing acts. “Now you’re looking at more like 15,000 to 20,000 streams a week.”
“Does Today’s Top Hits move the needle as much now as it did four years ago?” one senior label executive asks. “No.” The difference is especially stark, he adds, if you’re not near the top of the playlist.
Label executives say the change in firepower of marquee editorial playlists is caused in part by the increased emphasis on personalization, especially at Spotify, which encourages users to play music similar to what they’ve streamed — in essence, burrow deeper into their own tastes — rather than pushing all listeners to play the same tracks. The shift is also a reflection of the growing power of apps like TikTok in music discovery: “The pie of ‘discovery market share’ has become more fragmented,” according to Daniel Sander, chief commercial officer of music marketing technology company Feature.FM. The gatekeepers who program editorial playlists are ceding ground to user-generated content on short-form-video platforms.
There are exceptions: Managers say some of Spotify’s editorial playlists in Southeast Asia, for example, still have oomph, as does the phonk playlist, which launched earlier this year and caters to a rising subgenre of dance music popular in Eastern Europe. (Beneficiaries include dhruv, who has 7.5 million monthly listeners on Spotify, and Kordhell, with 12.7 million.) But executives maintain that many of the big-name editorial collections are not magnifying songs the way they once did.
Some of that decline is due to changes at the streaming services. In 2019, Spotify took playlists like Beast Mode and Chill Hits, which previously had been the same for all listeners, and personalized them “for each listener based on their particular taste,” according to a company press release. (This change did not affect playlists like RapCaviar, Baila Reggaeton, and Today’s Top Hits.)
Spotify found that this had two effects: Listeners tuned in to personalized collections for longer, and the streaming wealth was spread across more acts — raising “the number of artists featured on playlists by 30% and the number of songs listeners are discovering by 35%,” according to one 2021 announcement.
In her statement, Spotify’s Ong noted that “listener habits have become increasingly diverse, so our playlist strategy has expanded to accommodate that.” She says personalized editorial playlists are responsible for “a third of all new artist discoveries on Spotify.”
TikTok, which now spurs a lot of music discovery, embraced personalization from the beginning. Users marvel at how well the app seems to anticipate their tastes: “Everything on TikTok feels like it was meant especially for you,” says one music executive.
Short-form-video platforms like TikTok have also fundamentally altered the timeline of a hit. “With the rise of TikTok, YouTube Shorts and Instagram Reels, artists can play song snippets or behind-the-scenes content and drive fans to take action — discovery is happening before your song would even be able to be put on an editorial playlist,” says Sander.
In addition, TikTok rejuvenates catalog tracks — ranging from Fleetwood Mac’s “Dreams” (released in 1977) to Thundercat’s “Them Changes” (2017) — and pushes them back on to the charts, defying many marquee editorial playlists’ emphasis on front-line releases. “The path of a hit has changed,” says one major-label executive. The major streaming platforms “haven’t built anything to adjust to that.”
As a result, the power of streaming-service gatekeepers has eroded. “You’re going to find the next curator on TikTok,” says one A&R consultant at a major label. The mantle of the editorial playlisters has been taken up partly by remix-focused accounts on TikTok, which release sped-up or slowed-down versions of sounds that millions of users incorporate into their own videos.
User-generated content is “what’s driving TikTok and driving the charts,” says Kuok Meng Ru, CEO of music technology company BandLab. “People feeling involved gets them more excited.”
And there’s no way to be involved with editorial playlists other than hitting the “like” button. “We’re seeing in consumer surveys how much Gen Z really does want to actively participate in music — not just listen and consume passively, but make their own videos, remix the song, create their own content on top of it,” Cirisano adds. “The major streaming services don’t offer that.”
Michèle Hamelink was named managing director of Sony Music Publishing Benelux. In the role, Hamelink will oversee and implement creative strategy across Benelux, including building and strengthening relationships with clients, local societies and industry partners and expanding songwriter support and service offerings. Based in the company’s Benelux office, Hamelink will also continue in her existing role of senior A&R. She reports to Sony Music Publishing president of international Guy Henderson.
Layla Amjadi was hired as head of music expression at Spotify. In her new role, Amjadi will oversee a team that builds formats enabling “artists, aspiring creators and fans to creatively express themselves through and around music in new ways.” She arrives at the streaming service from Gemini, where she served as vp of product and general manager. Prior to that, she worked in various roles at Meta/Instagram for nearly a decade. She reports to Charlie Hellman, vp and global head of music product.
BMG announced a new A&R structure for its Madrid-based operation, with Marcos Fairweather leading on the recordings side and Javier Doria fronting the publishing side. Fairweather joins from Universal Music Spain, where he was A&R director. Doria has been with BMG since July 2020, when he joined the company to lead A&R across publishing and recordings. Both will report to Albert Slendebroek, who also oversees BMG in Scandinavia. Under their direction, the company will target growth in the Spanish language market, with a renewed focus on established artists.
Dani Oliva was named vp of business and legal affairs at Suzy Ryoo and Troy Carter‘s Venice Music. Oliva, a transgender man, joins the company from Oliva Law Group, P.C., which he established in 2017. “We are beyond proud to welcome Dani to Venice,” said Ryoo in a statement. “With his legal expertise as well as the distance traveled in his personal & professional journey, he is an incredible addition to our team and community at Venice.” Oliva can be reached at dani@venicemusic.co.
The Association of Independent Music (AIM) appointed Nina Radojewski as head of membership, a newly created role that brings together AIM’s membership, events and marketing and communications functions under her leadership. Previously AIM’s professional development lead, Radojewski will oversee the creation and execution of the organization’s membership strategy while continuing to lead professional development initiatives for members, including the AIM Academy and the Associate Members’ Knowledge Base. AIM’s outgoing membership manager, Jude McArdle, is stepping down after more than five years in the role. Radojewski can be reached at nina@aim.org.uk.
Cameo Carlson was appointed CEO at mtheory, where she’s worked since 2017. Also promoted at the artist development and management services company are Michael Corcoran, upped to general manager; Carmela Frangella, formerly controller, elevated to CFO; Amy Davidson, promoted to executive vp; Vince Amoroso, named senior vp, head of marketing; Jonah Berry, upped to vp of marketing out of New York and Los Angeles; and Kaitlyn Moore, promoted to vp of marketing out of Nashville. The company also hired Ed Rivadavia as senior vp, head of digital. Carlson can be reached at cameo@mtheory.com, Corcoran can be reached at michaelc@mtheory.com, Frangella can be reached at carmela@mtheory.com, Davidson can be reached at amy@mtheory.com, Amoroso can be reached at vince@mtheory.com, Berry can be reached at jonah@mtheory.com and Moore can be reached at kaitlyn@mtheory.com.
On-demand vinyl platform elasticStage appointed Raoul Chatterjee as COO. He joins the company from SoundCloud, where he served as vp of content partnerships & operations. Based in London, the Billboard 2021 International Power Player will report to elasticStage founder and CEO Steve Rhodes. Chatterjee can be reached at raoul.chatterjee@elasticstage.com.
Megan Schultz was promoted to label manager at Riser House Entertainment. She will continue to oversee all label operations and scheduling for artists signed to the company’s Riser House Records label, along with label services clients. Schutz can be reached at Megan.Schultz@RiserHouse.com.
Chase Butters was named vp of sync at Concord Music Publishing out of Los Angeles. Butters will lead a team focused on increasing and enhancing Concord’s synch placements in advertising. He reports to senior vp of sync Brooke Primont and can be reached at chase.butters@concord.com.
ATC Management added a trio of new manager partners: Brandon Sanchez, Jordan Alper and Ben Rafson. All three will join manager partner Fabienne Leys and general manager Jessica Fekete at ATC’s newly opened New York office. Sanchez and Alper bring their joint management client Yaeji to the company, while Rafson brings artist clients Avalon Emerson and Jacques Greene. Sanchez joins from New York-based record label RVNG Intl. and also co-runs independent record labels SLINK and Human Pitch; Alper has worked as a talent buyer and producer for Red Bull Music Academy NY, Trevanna Entertainment and Does Festival; and Rafson, who has been in management for nearly 15 years with a focus on electronic musicians, recently founded and serves as executive director of The Rising Artist Foundation grant system. Rafson can be reached at ben@atcmanagement.com, Alper can be reached at jordan@atcmanagement.com and Sanchez can be reached at brandon@atcmanagement.com.
Melanie Seddon was promoted to vp of brand marketing at TuneCore. She will oversee all brand marketing efforts for the company as well as brand partnerships.
Elvin Sabla has been named creative brand director at Shore Fire Media, where he will oversee the PR firm’s branding and content strategy. Sabla most recently led editorial for Crypto.com’s NFT platform.
ASM Global named Kelvin D. Moore regional vp and general manager of McCormick Place Convention Center in Chicago. Moore will focus on creating new programs and partnerships. Moore was previously regional vp and general manager for ASM Global at the Pennsylvania Convention Center. He succeeds David Causton, who has served as general manager of the venue since 2004. Moore can be reached at kmoore@asmglobal.com.
Jen Moss was hired as a senior synch executive at Bucks Music Group. Previously at Warner Music UK, she arrives at Bucks after several years away from the industry for personal reasons. She can be reached at jmoss@bucksmusicgroup.co.uk.
Rebecca Trujillo Vest, Carls Woolf and Jordan Stobbe launched Pandion Music Foundation (PMF), a nonprofit organization designed to help foster growth in the music creator community by providing the tools and networks needed to build careers “across all lines of diversity and inclusion,” according to a press release. Partners at launch include Earthstar Creation Center, 2indie.com and Sweetwater. PMF previously partnered with 2indie, a synch coaching agency, to hold a global 24-hour “Sync-O-Thon” on Sept. 28, 2022, which helped support emerging artists by bringing in music professionals to provide feedback on their songs. PMF subsequently offered workshops by Sam Knack, Nick Phelps and others. Trujillo Vest, Woolf and Stobbe first met through an online songwriting course during the pandemic. Trujillo Vest can be reached at rebecca@pandionmusicfoundation.org and Stobbe can be reached at jordan@pandionmusicfoundation.org.
As streaming became the dominant mode of music consumption, fraud and “fake streams” have been regarded as a minor nuisance — generally acknowledged but seldom worried about. Most industry executives tend to see this activity as a way for aspiring acts to inflate their numbers, and thus their commercial potential, or as an avenue for grifters to steer money into their pockets by running up plays of white noise or rain sounds.
At least since this summer, however, SoundCloud has detected evidence of fraudulent streams or manipulation on multiple releases from both notable independent acts and major-label artists, including hitmakers with track records of successful singles, according to two sources familiar with the company’s operations who spoke on the condition of anonymity. And this is not unique to SoundCloud. This summer, Deezer executive Ludovic Pouilly told the French investigative publication Les Jours that it has become more common to see “artists in the top 200 who have millions of real streams” have fake streams as well.
Streaming services are increasing their effort to fight the fakes. In a statement, a spokesperson for SoundCloud said, “We take the issue of stream manipulation extremely seriously and make every effort towards identifying and mitigating inauthentic plays.” It’s not alone: Earlier this year, a Spotify spokesperson told Billboard, “Stream manipulation is an industry-wide issue that Spotify takes very seriously.” SoundCloud also works with a third-party company that “specialize[s] in bot detection” to fight stream manipulation, an executive said at a Music Biz panel in May. (The panel had a pointed title, “They’re Coming For Us: Fraudsters & How We Stop Them.”)
Streaming executives say there are a handful of ways to fraudulently boost an artist’s numbers, including harnessing bot networks or fake or stolen user accounts, and that this activity is becoming “more intense,” as Pouilly put it. At Music Biz, Napster senior vp and general counsel Matthew Eccles noted that fraud on the platform “increased over COVID.”
In fact, the current streaming business is rife with “very prevalent fraud and abuse,” according to SoundCloud vp of strategy Michael Pelczynski, who spoke at the same panel. This abuse has “cultural ramifications,” Pelczynski added: If fraudulent streams go “undetected and not policed, and [they] start influencing the way we measure the success of music, we are literally supporting inauthenticity.”
The level of fake streams detected varies by service and region. At one point, bots on Pandora were generating “a large, large fraction of spins,” according to George White, senior vp of music licensing at SiriusXM, “nearly equaling” the amount coming from human accounts. Pouilly told Les Jours that “7% of the volume of daily streams [on Deezer] is now detected as fraudulent.”
The Merlin Network, which handles digital licensing for many independent labels and distributors, used to send members a monthly report detailing the percentage of fraudulent streams from their releases on Spotify; this February, 2.5% of ad-supported streams and 1.2% of the plays from premium Spotify accounts were identified as fraudulent. (Asked about the issue, a spokesperson for the platform said that stream manipulation was “an industry-wide issue.”) The ad-supported number was nearly 10% at one point in 2020, according to one executive who received the report.
As evidence of what Pelczynski dubbed “prevalent fraud” grows, music executives worry that artists who are playing by the rules will start to feel pressure to pad their numbers in order to keep up with rivals — especially in an increasingly crowded landscape where it feels harder than ever to stand out. Paying for fraudulent streams “will become a marketing expense that everyone needs to employ if it’s left unchecked,” White warned at Music Biz.
Eccles from Napster worried that the music industry could enter a phase like professional cycling decades ago, when cyclists felt compelled “to dope” just to compete at a high level. It is “key,” Eccles stressed, “to avoid a situation where that happens in music.”
Spotify CEO Daniel Ek on Wednesday (Nov. 30) blasted Apple for “stifling innovation and hurting consumers,” publicly renewing his company’s longstanding grievance that the tech giant abuses its dominant position over the market for smartphone apps.
In a series of tweets, the Spotify founder said Apple was “shameless in their bullying” of app developers and called on lawmakers in both the U.S. and the European Union to take “action” against a company that he said “doesn’t seem to care about the law or courts.”
“Over and over again @Apple gives itself every advantage while at the same time stifling innovation and hurting consumers,” Ek wrote. “Apple offers consumers the illusion of choice and give[s] developers the illusion of control.”
A spokeswoman for Apple did not immediately return a request for comment on Ek’s tweets.
Spotify has long been an outspoken critic of the rules Apple imposes on its app store — namely a 30% surcharge on most transactions made within the platform, and provisions that restrict how apps steer customers toward outside payment systems.
Apple says tight rules for app developers are needed to protect users from payment fraud and privacy violations. But critics say the company — which currently controls more than half the U.S. smartphone market with the iPhone and iOS operating system — is merely exploiting its dominant position to extract more money. Those complaints are even stronger from Spotify, since it also directly competes with Apple Music for subscribers.
Google, which accounts for the vast majority of the rest of the market for smartphone apps, is facing similar criticism and litigation.
The arguments against Apple’s app policies won a powerful ally last week when new Twitter owner Elon Musk raised the issue amid his own messy dispute with the tech giant. After claiming Apple had pulled its advertising and had threatened to pull Twitter from its app store, the polarizing billionaire asked his 120 million followers if they were aware that Apple “puts a secret 30% tax on everything you buy.”
In Wednesday’s thread, Ek directly quoted Musk’s tweet, as well as others who have voiced similar criticism. Citing “bipartisan support and global interest,” he said that “momentum” was building for some kind of action against Apple.
“So how much longer will we look away from this threat to the future of the internet?” Ek wrote. “How many more consumers will be denied choice? There’s been a lot of talk. Talk is helpful but we need action.”
Apple is already facing a high-profile lawsuit, filed by Fortnite creator Epic Games, that claims the app store policies violate federal antitrust laws. A trial court issued a split ruling on the case last year, and the battle is currently pending before a federal appeals court.
Though not directly involved in the Epic case, Spotify filed its own complaint against Apple in 2019 with the European Commission, the EU’s regulatory enforcement watchdog. Last year, EU regulators released preliminary findings that Apple had likely broken the law, saying the company “deprives users of cheaper music streaming choices and distorts competition.”
Even bigger changes could be coming via new legislation. In Washington, D.C., a bipartisan trio of senators are pushing a bill called the Open App Markets Act, which would impose strict new rules on both Apple and Google’s app stores. And lawmakers in the EU have already passed a new statute called the Digital Markets Act, which will place a raft of new restrictions on how app stores are run.
Though it will take time for the new EU law to fully go into effect, it was aimed directly at complaints like the one Ek voiced Wednesday against Apple. In an interview with Wired last month, one of the law’s architects said he expected “significant” consequences: “If you have an iPhone, you should be able to download apps not just from the App Store but from other app stores or from the internet.”
It’s the time of year — the mercury is diving (or soaring, for those of us in the south), holiday classics are ringing out in the stores, and Spotify unleashes its Wrapped campaign.
Today (Dec. 1), the music streaming giant unveils the songs that kept its 456 million listeners (with 195 million “paid” subscribers) plugged in.
Puerto Rican superstar Bad Bunny is No. 1 on Spotify’s most-streamed global artists list, with more than 18.5 billion streams in 2022. The rapper becomes the first artist to top the list three consecutive years, and also dominates Spotify’s annual albums chart.
Following the smash hit that was her tenth and latest album, Midnights, Taylor Swift comes in at No. 2 among Spotify’s most-streamed artists, while the top 5 is rounded out by international acts: Drake, The Weeknd, and BTS, respectively.
The biggest single of the year belonged to Harry Styles, whose chart-leader “As It Was” racked up more than 1.6 billion streams. Lifted from the British pop singer’s third solo studio album, Harry’s House, the single this year led the Billboard Hot 100 for a whopping 15 weeks, and reigned over the Official U.K. Singles Chart for 10 weeks.
Styles leads an all-international top 5, ahead of Glass Animals’ “Heat Waves;” The Kid Laroi and Justin Bieber’s “Stay;” and Bad Bunny tracks “Me Porto Bonito” and “Me Porto Bonito,” respectively.
The former One Direction artist’s third album Harry’s House went to No. 1 on both sides of the Atlantic, and around the world, and came in at No. 2 on Spotify’s most-streamed global albums list, behind Bad Bunny’s irrepressible Un Verano Sin Ti, which dominated the Billboard 200 in 2022 for 13 weeks.
Also, Spotify drills into its data for insights into those acts whose music is most shared (Taylor Swift), the most-shared lyrics (“Heat Waves”) and most popular podcasts (The Joe Rogan Experience, which Spotify exclusively licenses).
The streaming platform’s annual chart splurge is the entre for its Wrapped experience, which eligible users can access and share from today from Spotify mobile app (iOS and Android).
“This year’s Wrapped is both a celebration of a year gone by and an invitation to join in on the fun,” reads a statement, accompanying the year-end lists.
In addition to the annual rundown, this year’s Wrapped includes a creator experience for podcasters and artists. And Artist Wrapped, now in its sixth year, rolls out with several new features including “Your Artist Messages,” a dedicated Wrapped video feed, personalized to each listener; and a “Spotlight” on merchandise and ticketing which, for the first time, sees personalized offerings integrated into the Wrapped Hub and promoted to top fans via in-app notifications and other channels.
From Dec. 1, the likes of Jack Harlow, Elton John, NIKI, and others will promote Wrapped exclusive merch to their top fans.
Launched in 2017, Artist Wrapped is now available in 36 languages.
Spotify 2022 Wrapped Global Top Lists:
Most-Streamed Artists Globally
Most-Streamed Songs Globally
“As It Was” by Harry Styles
“Heat Waves” by Glass Animals
“STAY (with Justin Bieber)” by The Kid LAROI
“Me Porto Bonito” by Bad Bunny feat. Chencho Corleone
“Tití Me Preguntó” by Bad Bunny
Most-Streamed Albums Globally
Un Verano Sin Ti, Bad Bunny
Harry’s House, Harry Styles
SOUR, Olivia Rodrigo
=, Ed Sheeran
Planet Her, Doja Cat
Most Popular Podcasts Globally
Most Viral Artists Globally
Most Shared Lyrics Globally
Spotify 2022 Wrapped U.S. Top Lists
U.S. Most-Streamed Artists
U.S. Most-Streamed Songs
“As It Was” by Harry Styles
“Heat Waves” by Glass Animals
“Bad Habit” by Steve Lacy
“Me Porto Bonito” by Bad Bunny feat. Chencho Corleone
“First Class” by Jack Harlow
U.S. Most-Streamed Albums
Un Verano Sin Ti, Bad Bunny
Harry’s House, Harry Styles
Dangerous: The Double Album, Morgan Wallen
Midnights, Taylor Swift
SOUR, Olivia Rodrigo
U.S. Most Popular Podcasts
U.S. Most Popular Audiobooks
Spotify has been prepping music fans for their personalized Spotify Wrapped playlist for weeks, and the end of year rollout appears to be right around the corner.
The teases started way back in mid-October, when the streaming giant tweeted, “We want to see your Wrapped Top Artist predictions,” garnering responses from fans eager to guess the artist they had streamed the most throughout the bulk of 2022. (One week later, Spotify launched its new ‘Your Wrapped Soundcheck’ feature for artists on the platform.)
In years past, Spotify has collected data regarding each user’s listening habits through Halloween (Oct. 31) with Wrapped dropping either Dec. 1 or 2 — which in 2022, would mean this Thursday or Friday. And while the company has yet to confirm an exact date for the 2022 iteration of the madness, they’ve ramped up anticipation for the big day since that first tweet.
On Nov. 22, just a few days before Thanksgiving, Spotify promised, “All will be revealed soon” when it came to Spotify Wrapped. One day later, they roped Lizzo into the conversation by posting a gif of the singer beneath another tweet which read, “Turn up the music… it’s almost about damn time for #SpotifyWrapped” — a point-blank reference to her Billboard Hot 100 No. 1 hit, and lead single off 2022’s Special.
On Sunday night (Nov. 27), the streamer sent out the latest alert to anxious fans, tweeting, “Want to be the first to know when #SpotifyWrapped is here? [Heart] this tweet and we’ll remind you!” Based on hints and history, it seems the annual drop of Spotify Wrapped is imminent.
Check out everything Spotify has shared about the latest Spotify Wrapped below.
We want to see your Wrapped Top Artist predictions 👇— Spotify (@Spotify) October 12, 2022
Spotify’s quest to improve its margins has taken another step forward, as a pilot program for billing subscribers using Google devices expands to the U.S. and additional markets. Called “user choice billing,” the system allows app developers to provide Google Android smartphone users with the option of paying the developer directly — at a reduced fee — or through Google Play.
Last week, Google’s user choice billing pilot expanded to the U.S., Brazil and South Africa, and Google announced that dating app Bumble also joined the program. Spotify was the first developer to join the pilot program in March with test markets of Australia, India, Indonesia, Japan and the European Economic Area. With the additional markets, user choice billing will be tested in most of the world’s largest smartphone markets and most valuable music markets.
With user choice billing, prospective Spotify subscribers are presented with two payment options side-by-side in an Android app: Spotify and Google Play. Choosing Spotify will take the user to a form to fill out credit card information to sign up for a subscription. Importantly, it all happens within the Spotify app, not Spotify’s external website. Choosing to pay with Google Play prompts the user to enter a password to pay with the credit card on file with Google.
Billing is an under-appreciated but important issue in the subscription music business. Because music streaming is inexorably tied to smartphones, and because consumers have come to expect simplicity when engaging in e-commerce on smartphones, in-app billing helps a company like Spotify sign up subscribers. The problem for a music service like Spotify operating on thin margins, though, is that app stores run by Apple and Google have traditionally demanded a cut of these in-app purchases. That’s left music companies either paying the app store fees themselves, without raising prices, eroding each subscription’s profitability, or raising the price to compensate for the fee, which could turn away potential subscribers. Prior to 2016, Spotify charged users 30% more for an in-app upgrade to Premium to offset Apple’s 30% fee.
There’s one other option, of course: To save on fees, a music service may disallow in-app subscriptions and encourage a customer to take a few extra steps and subscribe at its website. That process risks losing potential subscribers along the way, but nevertheless, Spotify has gone this route and not allowed in-app purchasing on its Apple app since 2016.
Companies have faced this quandary for years. In 2019, for example, Pandora raised the price for subscribers who used Apple’s in-app purchasing premium subscription service from $9.99 to $12.99 to offset the fees. Pandora reported paying $50 million in fees to Apple and Google in 2015 – 3.7% of its annual revenue.
“It certainly puts independent music services at a disadvantage where we’re paying 30% of the economics out to the platforms that distribute our apps, who also happen to be competing with us, and for the same users, and the same economics,” Pandora’s then-CFO Mike Herring told investors in 2016.
Apple typically charges a 30% fee for in-app purchases during the first year of a subscription and 15% thereafter, according to Apple’s website for developers. Neither Apple nor Spotify have said publicly what fees are paid for Spotify subscriptions. The fees that Spotify pays Google are also private.
“We’re not going to comment on the terms of our agreement with Google because they are confidential,” a Spotify spokesperson tells Billboard, “but it’s safe to say that our [user choice billing] partnership is based on commercial terms that meet our standards of fairness.”
Generally, subscription services such as Spotify pay a 15% fee for in-app purchases, but the fee can go lower. App developers in Google’s Play Media Experience Program, which integrates apps into Google’s ecosystem of wearables and other hardware products, can pay less than 15%, for example. For subscription-based services with significant licensing costs — such as music, video, books and audiobooks — fees “can be as low as 10%,” according to a Google spokesperson.
User choice billing provides additional savings for app developers on top of any other program or discount. If an Android user presented with user choice billing opts for the app developer’s payment system, Google lowers the fee by 4%. So, if an app developer were paying a 10% fee to Google, user choice billing would reduce the fee to 6%.
Small improvements to gross margin are crucial to a music service that pays more than three-quarters of its revenue to rights holders. Spotify’s gross margin on its Premium subscription service was 28% in the third quarter of 2022, meaning that Spotify paid out 72% of its subscription revenue for licensing fees and some smaller costs of sales. Every percentage point of revenue represents about $100 million in subscription revenue in 2022, based on past earnings and Spotify’s fourth-quarter guidance. If Spotify can move its gross margin by a small amount, it would greatly impact the company’s free cash flow. To put it in perspective, Spotify’s net cash flow from operations for the first three quarters of 2022 was $109 million.
While Google seems willing to consider alternative approaches to in-app billing, Apple does not. Prominent app developers, including Spotify, have been fighting for better terms for years. In 2019, Spotify filed a complaint against Apple with the European Commission for anticompetitive behavior alleging that Apple “continue to give themselves an unfair advantage at every turn.”
Additionally, Apple is currently involved in a lawsuit brought by Epic Games regarding its control over the App Store. Although the judge in the case has mostly sided with Apple, the judge did order Apple to allow apps to provide links to payment alternatives outside the App Store. The lower court’s requirement has been delayed until the appeals court rules on the case. The two sides began oral arguments in the Ninth Circuit Court of Appeals on Monday (Nov. 14).
Apple’s strict rules are particularly meddlesome to Spotify’s latest attempt to improve its margins — audiobooks. In September, the streaming service began selling 300,000 audiobook titles following its acquisition of audiobook distributor Findaway in June. The plan makes sense: Audiobook purchases on its platform can provide Spotify with 60% gross margins — about twice the margin in music streaming – and audiobooks are a natural addition to its burgeoning podcast business.
But Apple’s rules for in-app purchases would make audiobooks purchased through an iOS app far less profitable — and a less straightforward process. Whereas the Google app provides “a beautiful experience,” CEO Daniel Ek said during the Oct. 25 earnings call, the process of buying an audiobook through Apple “is inherently broken because Apple decided it wanted it to be broken.” Spotify had lawyers “in the room” working with developers, but Apple rejected Spotify’s app multiple times, according to Ek. “It holds developers back and holds creators back,” he said. “And it’s bad for consumers.” Plus, there’s the added element here that Apple happens to be Spotify’s leading competitor for music streaming.
With audiobooks, Spotify currently sells titles on its website rather than inside the app to avoid fees (the user can listen using the Spotify app after the title is purchased). But just getting people to its website isn’t straightforward. As Spotify claimed on a website called Time to Play Fair, Apple does not allow Spotify to explain how to purchase an audiobook outside of the app, include a link to direct the user to a Spotify audiobook page, request or receive an email with instructions on how to purchase an audiobook or reveal an audiobook’s price in the app or in an email. Spotify’s Android app does not sell audiobooks, but the app allows users to receive an email with a link to Spotify to purchase a title.
In its June investors’ day presentation, Spotify management looked beyond music, podcasts and audiobooks. In the next ten years, Spotify will add sports, news and education to the platform and double the current average revenue per user, said Gustav Norström, chief freemium business officer. The user choice billing pilot program can only help with that goal.
Neil Young got candid about why he asked that his music be removed from Spotify earlier this year on a Wednesday morning (Nov. 16) interview with SiriusXm’s Howard Stern. The rock icon who has staked his reputation on doing things his way explained to Stern that his objection to being on the streamer was two-fold: the famously exacting guitarist/singer thinks Spotify audio quality is not up to his standard, and he was angered by the COVID conspiracy theories spouted by Spotify’s allegedly $100 million podcast star Joe Rogan.
“I woke up one morning and I heard somebody saying there was some scientists saying something about COVID, or some doctors and they were saying something about COVID and how many people were dying in hospitals and misinformation,” Young said, adding that he immediately thought about the nurses and medical professionals who were “distressed” by what they’d heard on Spotify; Young never specifically mentioned Rogan by name in his comments.
“And I listened to it and they were saying he purposely is saying this stuff that he knows isn’t true about COVID and people were dying,” he said of the misinformation on Rogan’s show about medically dubious COVID therapies. “I just called up my management and said, ‘We’re out of there. Get me off.’ And we’ll be fine, and it was a little shocking because they know all the [streaming] numbers. Who cares? You know, who cares? What’s his name? [Spotify CEO] Daniel Ek? He cares about money.”
Young said he knew Ek initially had good intentions with his service, because they’d met and he [Ek] seemed to be “coming from a good place. But then it just turned into money, money, money, money,” he said. When Stern asked how much money Young left on the table by yanking his tunes from Spotify, the Rock and Roll Hall of Famer said he didn’t know and didn’t care.
“I knew I was gonna do fine. There’s Amazon, there’s Apple, there QoBuz, those are three streaming services that play hi-res,” said Young, who has long fought against what he considers the low-quality fidelity of everything from CDs to digital files. “I think in the digital age we should be able to listen to great stuff, the best that we can get out of digital… Because you’re living off the music, why not pay it some respect and make it sound as great as it does.”
Young said he wasn’t surprised that more artists didn’t join his crusade against Spotify. After Young requested that his catalog be removed from Spotify in January — citing the spread of vaccine misinformation on the Joe Rogan Experience — he wasn’t entirely alone. A handful of artists including India.Arie, Nils Lofgren, Failure, his former CSNY bandmates Graham Nash, David Crosby and Stephen Stills and Joni Mitchell eventually joined his leave-taking.
“The way I look at it, that just turned me off and I made an instant decision — I didn’t think about it at all — just take my music off, we don’t need it. We’ve got all these other places,” Young said of his request. “And it sounds better at the other places. Why would I want to keep it on Spotify when it sounds like a pixilated movie?”
When it came down to it, Young said, he made it very clear: you can have “that guy” or you can have me. “So they chose to have that guy because they’re making millions of dollars off of him and they’ve just given him a whole bunch of money and that I would just eventually roll over and be back,” he said of what he suspected the streamers’ fiscal calculus was. At press time Young’s music was not available on Spotify and he told Stern he’s “never going back there, or anywhere else like it. I don’t have to, I don’t want to. I don’t crave the airplay like that. I don’t really need it, I don’t want it.”
A spokesperson for Spotify had not returned a request for comment at press time.
The Ledger is a weekly newsletter about the economics of the music business sent to Billboard Pro subscribers. An abbreviated version of the newsletter is published online.
Most publicly traded companies have released earnings for the latest quarter (ended Sept. 30), and most of those results have shown encouraging signs for investors and the music industry alike. Earnings by Universal Music Group, Spotify, Live Nation, SiriusXM are in the books. Notable companies yet to announce include Warner Music Group (Nov. 22) and Tencent Music Entertainment (Nov. 15).
If there is one over-arching narrative, it’s that inflation and economic uncertainty haven’t ruined music’s post-pandemic recovery. Revenue growth is strong, aside from some softness related to a slowdown in advertising spending that impacts broadcast radio and ad-supported streaming. Consumer spending on everything from concerts to vinyl records is healthy – despite the around-the-clock warnings of an impending recession and the highest inflation rates in four decades eating into consumers’ wallets. When companies have raised prices for tickets and concessions at concerts, music fans, by and large, haven’t blinked. Even long-stagnant music subscription prices are on the rise, and nobody expects a consumer backlash.
Not that music companies’ stock prices reflect this optimism. Stocks in general have taken a beating in 2022. Music stocks have suffered, too, although stocks ended the week on a high note. The Billboard Global Music Index, a measure of 20 publicly traded music companies’ stocks, climbed 12.7% this week after markets rallied on Thursday and Friday on encouraging news about the slowing U.S. inflation rate.
Here are five quick takeaways from third-quarter earnings and the statements made by the companies’ management teams.
1. The subscription business model is insulating creators and rights holders from economic uncertainty. Music royalties are popular with investors in part because they are counter-cyclical, meaning their returns have little correlation with changes in the broader market. Put another way, when the economy sours, people are more likely to cut back on grocery spending or travel than cancel a Spotify subscription. Consumers might feel pinched in their pocketbooks, but Spotify and SiriusXM added 7 million and 187,000 subscribers, respectively, in the third quarter, and YouTube announced on Wednesday that it surpassed 80 million subscribers to YouTube Music and Premium, an increase of 30 million in about 14 months. Stock prices at companies more exposed to inflation pressures fared best on Thursday, as stocks surged on news that the annual change in the consumer price index in the U.S. fell to 7.7%. Shares of radio companies iHeartMedia and Audacy climbed 10.0% and 14.0%, respectively. Live entertainment companies also did well: MSG Entertainment was +5.6%, Live Nation was +5.1%, and ticketing companies Eventbrite and Vivid Seats were +8.3 and +9.2%, respectively.
2. Podcasts are a growing, stabilizing force. Spotify’s podcast business has rightly captured headlines as the company uses spoken-word content to build engagement, generate advertising revenue and improve on the gross margins of its core music business. The number of monthly users who consumed podcasts grew “in the substantial double-digits” year-over-year, the company said. But other companies’ podcast businesses get less attention despite their importance to their own futures. Radio companies – namely iHeartMedia, Cumulus Media and Audacy – have fast-growing podcast businesses. LiveOne, primarily a music streaming company, has a fast-growing podcast division, PodcastOne, that made $17.2 million of revenue in the last two quarters on the strength of such shows as The Adam Carolla Show, Cold Case Files and Uncut with Jay Cutler. The catch is that podcast growth has little direct impact on the music business outside of helping those platforms – digital and broadcast – that produce royalties for record labels and publishers. Music rights owners could better tap into this growing market if there were better systems for licensing music to podcast creators.
3. With share prices relatively low, companies are increasingly buying back shares to bolster shareholder value and help share prices. Among the companies currently engaged in stock repurchase programs are Spotify, MSG Entertainment, Cumulus Media, Audacy, SiriusXM, Townsquare Media and LiveOne. Spotify announced a $1 billion share buyback program in August 2021, and it spent $2 million and $24 million repurchasing shares in the second and third quarters, respectively. Cumulus Media has $21.1 million remaining in its $50 million share repurchase authorization announced in May. Last month, MSG Entertainment authorized $75 million for share buybacks on top of a $175 million, one-time dividend worth $7 per share paid on Oct. 31 to shareholders of record on Oct. 17. And LiveOne announced on Thursday that it will expand its share repurchase program, originally planned for 2 million shares (worth about $1.5 million at Friday’s closing price), by an additional $2 million. More buybacks could be on the way soon: Universal Music Group shareholders voted in May to give the company’s board the ability to repurchase up to 10% of the issued share capital.
4. Strong growth in “rest of world” markets. Believe’s revenue in Asia Pacific and Africa grew 61.1% to 52.3 million euros ($53.2 million), about the same as its European revenues excluding France and Germany. Spotify’s “rest of world” markets improved their share of monthly active users to 26% in the third quarter, up from 21% in the prior-year period. Also, “rest of world” and Latin America each gained a percentage point in shares of Spotify subscribers while North America and Europe both lost a percentage point of subscriber share. As Billboard’s Elizabeth Dilts Marshall reported last week, investors are increasingly eyeing companies in the Middle East and North Africa as streaming transforms those regions.
5. Spinoffs are going to separate high-growth, high-potential businesses. MSG Entertainment plans to spin off its MSG Sphere venue currently under construction in Las Vegas along with its Tao Hospitality Group. The remaining MSG Entertainment will retain the live entertainment business – namely the portfolio of venues such as Madison Square Garden and Radio City Music Hall – and MSG Networks, a sports broadcast network. Ryman Hospitality will spin off its Opry Entertainment Group – possibly within four years, based on its agreement with two new investors, Atairos and NBCUniversal. LiveOne plans to file an S-1 document with the SEC by Dec. 15 for a spin-off of its podcast division, PodcastOne, which accounted for about 37% of the company’s total revenues in the six-month period ended Sept. 30. LiveOne’s management and board believe the company’s share price undervalues the sum of its parts and spinning off PodcastOne would maximize shareholder value and better position the division for M&A and talent acquisition.