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When it came to music stocks in 2024, there was Spotify, and then there was everything else.
The Swedish music streaming company not only had the top-performing music stock of the year, but its share price’s gain nearly tripled the next best company. Despite ending the year on a four-week losing streak during a downturn that eroded an otherwise spectacular year for many markets and indexes, Spotify’s share price jumped 138.1% to $447.38 in 2024.
Layoffs and price increases in 2023 did wonders for Spotify’s financial statements. Headcount was reduced by about 25%, eliminating the bloat gained during a pandemic-era hiring spree that mirrored a boom in subscriber gains. At the same time, Spotify broke with its long-standing tradition of leaving prices untouched by hiking fees in the U.S. and many other major markets — followed by a second price hike in 2024 in the U.S. and U.K. After more than a decade of adding features and expanding editorial programming, the streaming giant believed it could finally raise prices without its customers fleeing to competitors (many of whom raised their prices before Spotify). It was right.
The one-two punch quickly produced results. Perpetually unable to turn a profit, Spotify went from an average quarterly operating loss of 112 million euros ($121 million) in 2023 to an average quarterly operating profit of 296 million euros ($322 million) in the first three quarters of 2024. Gross margin (revenue less cost of sales) shot up, too, from 24.1% in the second quarter of 2023 (the last period before the first price increase) to 31.1% in the third quarter of 2024. Subscribers didn’t just stick around, they grew in numbers, from 220 million before the first price increases to 252 million on Sept. 30, 2024.
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Investors have rewarded Spotify for becoming a more efficient business without sacrificing the product quality necessary in a competitive market. An investment in Spotify on Nov. 4, 2022, when the share price reached an all-time low of $69.29, would have returned 446% by the end of 2024. For a brief time in early December, Spotify’s market capitalization surpassed $100 billion.
The 20-company Billboard Global Music Index gained 38.5% in 2024, easily besting the tech-heavy Nasdaq Composite (up 28.6%), the S&P 500 (up 23.3%), the Shanghai Composite Index (up 12.7%) and the FTSE 100 (up 5.7%). Because the index is unweighted, Spotify, the index’s largest company by market value, was responsible for much of that improvement. Without Spotify’s gain, the index would have risen just 2.5%.
Streaming and live music accounted for eight of the 10 music stocks that posted gains in 2024, reflecting these companies’ ability to capture the financial benefits of consumers’ willingness to spend more on music. Despite Spotify’s enormous improvement, live music was the best segment with an average gain of 24.8%. Live Nation was the index’s second-best performer with a 38.3% gain, besting German promoter CTS Eventim (up 30.4%), Sphere Entertainment Co. (up 18.6%) and MSG Entertainment (up 11.8%). These companies have benefitted from music fans’ ability to withstand consistently higher prices. Last year, the average ticket price for the top 100 tours was $132.30, up from $119.64 in 2023, according to Billboard Boxscore.
Music streaming stocks posted an average gain of 23.0%. Chinese music streaming companies Cloud Music and Tencent Music Entertainment gained 27.2% and 26.0%, respectively, and U.S.-based LiveOne gained 5.0%. Abu Dhabi-based Anghami and French streamer Deezer were exceptions to music streaming’s banner year. Anghami fell 21.2% while Deezer slipped 37.1%.
Record labels and music publishers — here classified as multi-sector companies — continued to expand their revenue in 2024 but didn’t have the momentum of live and streaming companies. Universal Music Group (UMG) fell 4.2% even though its sales through the third quarter reached 8.4 billion euros ($9.1 billion), up 6.3% from the prior-year period. Warner Music Group (WMG) dropped 13.4% after its revenue for the fiscal year ended Sept. 30 rose 6% to $6.4 billion. Both companies’ recorded music streaming revenue grew nicely, too — 7.3% for UMG and 6.9% for WMG — but investors rewarded streaming companies, not record labels, for subscriber and pricing gains.
K-pop companies were down across the board in 2024. HYBE, SM Entertainment, YG Entertainment and JYP Entertainment lost an average of 19.0% last year after gaining an average of 30.0% the prior year. Some of the decrease can likely be attributed to sharp profit declines and uneven revenue growth in recent quarters, though it can also be attributed to the rough year for South Korean stocks in general. The KOSPI composite index dropped 9.6% and was already in poor shape when South Korean Prime Minister Yoon Suk Yeol declared martial law on Dec. 3.
French music company Believe is an outlier in the multi-sector category, though most of its 37.1% gain can be attributed to the deal in June that took the company private at a 21% premium. Another notable outlier is Reservoir Media, which gained 26.9% without the benefit of a transaction to boost the share price. Instead, Reservoir shares were helped by activist investor Irenic Capital Management LP, which took an 8.1% stake in September and called on the “undervalued” company to “undertake a full review of all alternatives” to maximize shareholder value. From the date of Irenic Capital’s regulatory filing to the end of the year, Reservoir Media shares rose 17.8% while other multi-sector stocks either barely improved or lost value.
Radio companies have not been darlings of Wall Street in recent years, and 2024 was no exception. For all the optimism espoused by broadcast and satellite radio companies, they continue to struggle in an increasingly streaming-based world. The worst-performing music stock of the year was Cumulus Media, which fell 87.4% to $0.67. Through September, Cumulus’ revenue was down 2.4% and its net loss more than doubled. SiriusXM fell 58.3%, with much of that decline coming after the company announced plans to focus on in-car satellite listening after its streaming app, launched in late 2023, failed to catch on with consumers. iHeartMedia dropped 25.8% but ended the year on a high note after exchanging much of its long-term debt to extend maturity dates.
Just a few days in, Kesha is already having a killer 2025. The “Delusional” singer took to X on Thursday (Jan. 2) to crow about the fact that her debut single, “Tik Tok,” is back on top again. “It was 15 years ago that I got my first #1 song! YALL did that. And the […]
Billie Eilish‘s “Birds of a Feather” soared to even higher heights just before the new year, with the Hit Me Hard and Soft track becoming Spotify‘s most-streamed song of 2024. As announced Thursday (Jan. 2) by Interscope, “Birds of a Feather” moved to the top spot of the streamer’s year-end song statistics in the final […]
The Canadian government’s so-called “streaming tax” is on pause.
The CRTC (Canadian Radio-television and Telecommunications Commission) revealed in June 2024 that major global streaming companies would be mandated to pay 5% of their annual Canadian revenues into funds that fuel Canadian content. The decision was part of the Online Streaming Act, new legislation that modernizes Canada’s Broadcasting Act for the first time in a generation.
Since then, many of the biggest streaming companies — including Spotify, Amazon, Apple, Netflix and Disney — have been fighting the decision in court. This week, the Federal Court of Appeal decided to put the companies’ required payments on hold until their appeal is heard.
The Canadian Press reports that the payments, estimated to be at least $1.25 million each annually, will not have to be made until the court process is finished. They’ve agreed to expedite the hearings to June 2025, with the bulk of the money due in August.
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While pursuing legal challenges, many of the biggest streaming companies have also launched an online campaign to lobby against the decision in the court of public opinion. A group called DiMA (the Digital Media Association) — whose members include Amazon, Pandora, Spotify, YouTube, Apple and more — launched a website with a petition and letter-writing campaign under the name Stop the Streaming Tax. The campaign has at least one high-profile advocate in musician Bryan Adams, a longtime critic of CanCon regulations.
The 5% contributions “could lead to higher prices for Canadians and fewer content choices,” the website argues. “As a result, you may end up paying more for your favourite streaming services and have less control over what you can watch or listen to.”
Many Canadian music associations like CIMA (the Canadian Independent Music Association), meanwhile, have praised the CRTC’s decision. In June, CIMA president Andrew Cash called it “good news for the Canadian music sector” and said it “lays the groundwork for a dynamic partnership with digital platforms where Canadian talent can thrive both domestically and internationally.”
The mandated contributions would go to music funds like FACTOR and Musicaction as well as the Canadian Starmaker Fund, funds to support commercial and community radio, and to the Indigenous Music Office and other Indigenous music incubators.
More on this story as it develops.
This story was originally published by Billboard Canada.
Spotify is firing back at Drake’s accusations that the streamer helped Universal Music Group artificially boost Kendrick Lamar’s “Not Like Us,” calling the allegations “false” and blasting the rapper’s legal action as a “subversion of the normal judicial process.”
The new filing is the first response to a petition filed last month in which Drake accused UMG and Spotify of an illegal “scheme” involving bots, payola and other methods to pump up Lamar’s song — a track that savagely attacked Drake amid an ongoing feud between the two stars.
In a motion filed Friday in Manhattan court, the streaming giant says it has found zero evidence to support the claims of a bot attack, and flatly denies that it struck any deal with UMG to support Lamar’s song.
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“The predicate of Petitioner’s entire request for discovery from Spotify is false,” the company’s lawyers write. “Spotify and UMG have never had any such arrangement.”
Beyond denying the allegations, the filing repeatedly criticizes Drake for going to court in the first place — calling his claims of a conspiracy “far-fetched” and “speculative,” and questioning why Spotify (a “stranger” to the “long-running fued” between Drake, Kendrick and UMG) is even involved.
Spotify also criticized Drake for the way in which he brought his claims to court — not as a full-fledged lawsuit, but as an unusual “pre-action” petition aimed at demanding information. The company accused Drake of using that “extraordinary” procedure because his allegations are too flimsy to pass muster in an actual lawsuit and would have been quickly dismissed.
“What petitioner is seeking to do here … is to bypass the normal pleading requirements … and obtain by way of pre-action discovery that which it would only be entitled to seek were it to survive a motion to dismiss,” Spotify’s lawyers write. “This subversion of the normal judicial process should be rejected.”
A spokesperson for Drake and his legal team did not immediately return a request for comment on Spotify’s filings.
Drake went to court last month, accusing UMG of violating the Racketeer Influenced and Corrupt Organizations Act, the federal “RICO” statute often used against organized crime. He accused Spotify of participating in the scheme by charging reduced licensing fees in exchange for recommending the song to users. A day later, he filed a similar action in Texas, suggesting that UMG had legally defamed him by releasing a song that “falsely” accused him of being a “sex offender.”
The legal actions represent a remarkable twist in the high-profile beef between the two stars, which saw Drake and Lamar exchange stinging diss tracks over a period of months earlier this year. That a rapper would take such a dispute to court seemed almost unthinkable at the time, and Drake has been ridiculed in some corners of the hip-hop world for doing so.
The actions also represent a stunning rift between Drake and UMG, where the star has spent his entire career — first through signing a deal with Lil Wayne’s Young Money imprint, which was distributed by Republic Records, then by signing directly to Republic.
UMG has not yet filed a responded to the litigation in court. But in a statement issued at the time, the music giant called Drake’s allegations “offensive and untrue”: “No amount of contrived and absurd legal arguments in this pre-action submission can mask the fact that fans choose the music they want to hear.”
In Friday’s filing, Spotify echoed that criticism — arguing that civil RICO cases are difficult to prove even with ample evidence, and that Drake hardly has any: “The Petition asserts no specific facts of any kind in support of these alleged RICO and deceptive practices violations,” the company wrote. “Instead, it relies exclusively on speculation … or the claims of anonymous individuals on the internet.”
Spotify’s attorneys seemed particularly focused on disputing the idea that swarms of bots had been able to flood the platforms to fraudulently boost Lamar’s track — a hot-button issue in the modern music industry. In an affidavit attached to Friday’s filing, Spotify’s vp of music offered sworn testimony that the company “invests heavily” in efforts to “mitigate the impact of artificial streaming on our platform.”
“When we identify attempted stream manipulation, we take action that may include removing streaming numbers, withholding royalties and charging penalty fees,” David Kaefer wrote in the filing. “Confirmed and suspected artificial streams are also removed from our chart calculations. This helps us to protect royalty payouts for honest, hardworking artists.”
The Weeknd‘s Q4 career moves have proven the pop star has remained dedicated to finishing the year strong before kicking off 2025 with a bang: He performed a one-night-only stadium show in São Paulo, Brazil in September and released three singles that he debuted during the show: “Dancing in the Flames,” the Billboard Hot 100 No. 3 hit “Timeless” with Playboi Carti and “São Paulo,” featuring Anitta. In October, he took over a handful more stadiums in Melbourne and Sydney during his rescheduled Australian tour. And the following month, he announced his sixth studio album Hurry Up Tomorrow will be released on Jan. 24, and he’ll perform another one-night-only stadium show at Pasadena’s Rose Bowl the day after.
And somewhere in the middle of all of this, The Weeknd also became the artist with the most songs to hit one billion streams on Spotify, with 24 songs in the Billions Club. And nearly 2,000 of his top listeners on Spotify got to relive those hits during Spotify’s first-ever Billions Club Live concert at Santa Monica’s Barker Hangar on Tuesday evening (Dec. 17).
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“It’s a little holiday gift for the OG XO fans supporting me since day one,” he said while blue strobe lights kicked off his 70-minute set. “2024 is almost done. But 2025, we got some new s–t coming out. New album, new tour, new movie. New everything!” His upcoming album Hurry Up Tomorrow, which is the third and final installment of his After Hours / Dawn FM trilogy, will be supported by a psychological thriller film of the same name that will mark the singer’s feature-starring debut.
It’s poetic that the Canadian-Ethiopian superstar (real name Abel Tesfaye) is closing this chapter of his career the same way he started it over a decade ago, with a trilogy of cohesive projects. Outside of his big-picture ideas, he finds clever ways to thread together little details from his entire discography. The popular idiom “this house is not a home,” for example, is a common lyrical theme, which The Weeknd references not only in the 2020 After Hours title track he performed but also dating back to “Twenty Eight” from his 2011 debut mixtape House of Balloons. But for someone as beloved as him, The Weeknd feels right at home on stage even during the remarkably intimate show.
“It’s been a while since I’ve been at a venue like this. Feels like back in the Kiss Land tour or Trilogy tour,” he reflected. “Maybe after the stadium tour, we might go back in time and we might do smaller venues.”
He tapped his frequent collaborator Mike Dean — whom The Weeknd jokingly blamed for his minor coughing fit because he was “hitting that f–king bong all night” — to steer the set “wherever you wanna take it,” before the hip-hop superproducer’s eerie synths introduced Metro Boomin‘s “Creepin,’” featuring The Weeknd and 21 Savage. The Weeknd later summoned his drummer Ricky Lewis to play “Popular,” the platinum-certified hit with Madonna and Carti from his 2023 HBO drama series The Idol. It’s one of two songs from the show to hit one billion Spotify streams, with the other being “One of the Girls” with JENNIE and Lily-Rose Depp. Then, he called on his guitarist Patrick Greenaway to cue the next song — and Greenaway’s scene-stealing shredding summoned “Heartless.” The Weeknd had multiple opportunities to bring out special guests, considering 13 of the 24 songs in the Billions Club are collaborations, but the unprecedented concert felt more suited for his solo victory lap rather than an all-star relay race.
“Oh s–t, this hit a billion?!” he marveled as “Reminder,” from his 2016 album Starboy started playing. The Weeknd warned the crowd of the song’s gunshot background sound during the chorus, a conscious reminder his concertgoers have picked up on from his previous shows. And while this one’s circular stage setup was much simpler than his ornamented stadium show designs, it didn’t stop The Weeknd from making the night memorable: Yellow spotlights flickered as he sang the “I just wanna see you shine ’cause I know you are a stargirl” outro from his and Lana Del Rey‘s “Stargirl Interlude,” and they later twinkled to recreate the grandiose ballroom feel of “Earned It” from the 50 Shades of Grey film. And red strobe lights provoked the sinister aura of his 2015 Hot 100 chart-topper “The Hills” from Beauty Behind the Madness.
He asked if any of his ballads had hit one billion Spotify streams to slow down his set, but the singer was taken aback by the siren-like synth intro of his Gesaffelstein-featuring “I Was Never There” from his 2018 EP My Dear Melancholy, classifying it as more of a “power ballad.” After his 2012 debut single “Wicked Games” (“I know that song didn’t hit a billion, but I felt like I had to do it. It’s necessary, at least one House of Balloons song,” he said matter-of-factly) and “Die For You” — which experienced a TikTok-fueled resurgence six years after its release and produced the Hot 100 No. 1 remix with Ariana Grande — The Weeknd wanted to “pick up the pace” and Daft Punk‘s fuzzy disco-pop production from “I Feel It Coming” instantly got the audience in a groove.
After what felt like the ultimate finisher with “Blinding Lights” — the first song to hit four billion Spotify streams as well as the top Hot 100 song of all time — The Weeknd teased his Hurry Up Tomorrow era by singing a snippet of an unreleased song he’s teased during previous shows, reportedly titled “In Heaven.” “In 2025, everything is fine. In 2025, everything will be fine. I’ll come back for you, XO. But until then, hurry up tomorrow! Hurry up tomorrow! Hurry up tomorrow! Hurry up tomorrow!” he bellowed.
Check out the full set list from The Weeknd’s Spotify Billions Club Live concert below.
“Call Out My Name”
“Moth to a Flame”
“After Hours”
“Lost in the Fire”
“Creepin’”
“Popular”
“Starboy”
“Heartless”
“Reminder”
“Stargirl Interlude”
“One of the Girls”
“The Hills”
“Often”
“I Was Never There”
“Wicked Games”
“Earned It”
“Die For You”
“I Feel It Coming”
“Can’t Feel My Face”
“Save Your Tears”
“Blinding Lights”
Encore:
“Timeless”
“São Paulo”
To close out 2024, Sabrina Carpenter was on countless people’s year-end Spotify Wrapped lists — including her own.
That’s exactly why the 25-year-old pop star didn’t join many of the streaming service’s users in sharing her listening-habit summary on social media this year, she told Vogue Arabia in a new interview published Tuesday (Dec. 10). “When I first saw mine, my initial reaction was, ‘Oh, damn, I can’t post that, because I’m on my own [list],’” she told the publication. “‘It’s a bit conceited.’”
“But then I was like, I guess it’s a good thing that I’m on my list and listening to my own music, because it means I f–k with what I do,” Carpenter added.
The Girl Meets World alum definitely isn’t the only one. In 2024, her smash hit “Espresso” was streamed more than 1.6 billion times on Spotify, making it the app’s most-streamed song of any other upload. Plus, her Billboard 200-topping sixth studio LP Short n’ Sweet was the platform’s third-most popular album, bested only by Taylor Swift’s The Tortured Poets Department and Billie Eilish’s Hit Me Hard and Soft.
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While on the topic of Spotify Wrapped, Carpenter did reveal which other four artists made her top 5: Dolly Parton, ABBA, Kacey Musgraves and the Bee Gees.
Carpenter is currently on a break from her first-ever arena trek, with the North American leg of the Short n’ Sweet Tour closing in November. The “Please Please Please” singer will get back on the road for a run of European dates in March.
In the meantime, fans can enjoy her new holiday special A Nonsense Christmas, which premiered Dec. 6 on Netflix. Of the project, Carpenter told Vogue Arabia, “It was kind of a s–t show — but in the best possible way. A Christmas s–t show, which is way better than normal ones, because everyone’s festive and dressed up,” she said, revealing that her crew filmed the special in just two days. “You can’t really be mad when everyone is dressed like Christmas. And I’m so lucky that my friends were a part of it, that just made it all the more fun.”
Spotify continued its remarkable run this week by briefly surpassing a $100 billion market capitalization before falling slightly by the close of trading on Friday (Dec. 6). The company’s shares rose 4.5% to $498.63, marking the music streamer’s second-best closing price ever. The best closing price of $502.38 came on Wednesday (Dec. 4) when Spotify reached a new intraday high of $506.47, valuing the Swedish company at approximately $100.8 billion.
The $100 billion threshold arrived the same day Spotify launched its 2024 Wrapped, the personalized, data-driven product that breaks down listeners’ streaming time and ranks their most popular artists and tracks. Wrapped, first launched in 2015, has become both a major media event and an immensely successful product that listeners share incessantly on social media.
At Friday’s closing price, Spotify has gained 165.4% in 2024, making it the only music company to have a triple-digit gain. This improvement is three times higher than that of Live Nation, which has risen 46.1% this year. Cloud Music is close behind with a 44.2% gain year-to-date.
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With a valuation of more than double the next-largest music company, Spotify is a major driver of the 20-stock Billboard Global Music Index, which rose 2.8% to an all-time high of 2,280.51. That brings its year-to-date gain to 48.7%. Ten of the 20 stocks were gainers while nine lost ground and one was unchanged. Radio companies, buoyed by iHeartMedia’s 14% gain, led the way with an average gain of 5.9%. Streaming companies posted a 4.4% average gain. Live music companies were essentially flat. Multi-format companies (record labels, music publishers) fell 2.1% on average.
Most other streaming companies were gainers this week. Tencent Music Entertainment rose 10% to $11.54. Cloud Music increased 9.7% to 129.40 HKD ($16.63). LiveOne jumped 6% to $0.88. Deezer improved 2.9% to 1.37 euros ($1.45). Abu Dhabi-based Anghami fell 6.8% to $0.73.
On the live front, MSG Entertainment improved 1.6% to $36.26 this week. The company announced on Tuesday (Dec. 3) that it spent $25 million repurchasing its Class A common shares due to their price “relative to the company’s long-term growth potential.” Elsewhere, Live Nation fell 1.1% to $140.26 while Sphere Entertainment Co., which announced additional Dead & Company dates this week, fell 5.1% to $40.27.
In other noteworthy stock moves this week, HYBE dropped 3.2% to 214,000 won ($150.15) after news broke that South Korean authorities are investigating chairman Bang Si-hyuk for possible violations of the country’s Capital Markets Act. The move came after a report claimed Bang had a secret agreement with shareholders prior to HYBE’s initial public stock offering that gave him a $285 million profit when the company went public in 2020. HYBE shares fell 6.7% over the two trading days following the news report but recovered more than half its losses later in the week. Other K-pop stocks fell in unison with HYBE. JYP Entertainment dropped 5.2%, YG Entertainment lost 5.8% and SM Entertainment sank 7.5%.
Elsewhere, stocks were mostly up globally. In the United States, the Nasdaq composite rose 3.3% and the S&P 500 gained 1%. In the United Kingdom, the FTSE 100 improved 0.3%. China’s Shanghai Composite Index grew 2.4%. Dragged down by political turmoil, South Korea’s KOSPI composite dropped 1.1%.
If it seems like everybody is talking about Spotify Wrapped, the streaming service’s data-driven annual recap of listening habits, it’s because everybody is talking about Spotify Wrapped. That says a lot about its effectiveness and its value to the company.
The streaming platform’s personalized year-end recap is unmissable this time of year. Mashable began prepping its readers back on Nov. 19. A week later, Spotify heightened expectations by advising users to update the Spotify app to the latest, Wrapped-ready version. When Wrapped finally appeared on Wednesday (Dec. 4), there was an onslaught of media coverage. Billboard even got into the Wrapped coverage, revealing Chappell Roan’s top artists and songs on Spotify in 2024 (Ariana Grande and Heart’s “Barracuda,” respectively).
With so much media coverage, some of it is bound to carry a grousing, annoyed tone. “Hate your Spotify Wrapped?” Rolling Stone asked, “You’re not alone.” “Sorry, parents,” The Washington Post lamented, “it’s actually your kids’ Spotify Wrapped.” Vogue turned Wrapped into a frank self-examination in an article titled “I love Spotify Wrapped so much I hate it.” For people whose Spotify Wrapped “suck[ed],” Pocket-lint suggests ways to “fix it” in 2025. The Huffington Post’s compilation of the “funniest” tweets about Wrapped was filled with only mildly humorous complaints.
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In contrast, articles about Wrapped’s peers came and went without anything close to the same level of media hullabaloo. The annual recaps of Apple Music, Amazon Music and YouTube Music received basic coverage at mostly tech-oriented publications but didn’t elicit the kind of longwinded pop culture essays that Wrapped conjures up every year. Apple Music Replay received run-of-the-mill articles such as “Apple Music’s yearly recap is finally available in the app” at tech news site The Verge. When TechCrunch covered the launch of Amazon Music’s 2024 Delivered, the headline referred to it as Amazon’s “take on Spotify Wrapped” lest nobody know what they were talking about. YouTube Music Recap launched on Nov. 25 to little media coverage.
For its part, Spotify contributed to the media overload by building a 2024 Wrapped microsite and posting 10 Wrapped-related press releases on launch day. Wrapped itself introduced new innovations in 2024, including a personalized Wrapped podcast featuring two AI hosts and the Your Music Evolution Playlist, a personalized playlist that tracks a user’s different musical interests and phases throughout the year. Wrapped has become such an important event that Spotify hosted a pre-release press briefing that featured talks by executives across the company. As Glenn McDonald, a former Spotify software engineer and author of the book You Have Not Yet Heard Your Favourite Song: How Streaming Changed Music, told Billboard via email, “nothing else they do gets as much marketing/branding energy put into it.”
Wrapped especially shines in the awareness it attracts on social media. At the end of every Wrapped recap, Spotify offers personalized badges that flood X, Instagram and TikTok — the latter two benefitting from integrations announced in November that make it easier to share content. In this way, Wrapped turns its users into “active brand advocates on social media,” as one academic study put it. Or, as another paper phrased it, Spotify turns its users into “free labour” to help market its product. “For Spotify, it is 100% a brand-visibility moment,” says McDonald. “Social virality is the only metric the company cares about. The viral attention does help with user retention and reactivation, but the virality itself is the thing they’re measuring.”
More than an effective marketing ploy, Wrapped has turned into a competitive advantage in a business where standalone music streaming services desperately need one. A company has a competitive advantage when it creates more economic value than its competitors. Economic value is the difference between the perceived value of the product and the costs required to produce the product. Some brands are able to charge a premium because they have succeeded, through the quality of the product and the effectiveness of marketing, in convincing consumers their product is worth more. Food made with better ingredients commands a price premium, for example. Sometimes differences in perception of value come down to marketing. The difference between luxury clothing brands’ prices can be explained by amounts spent on splashy advertisements and celebrity endorsements, not just the cost of materials and labor.
Unlike streaming video-on-demand (SVOD) services, which attract viewers mainly through exclusive programming, music streaming platforms have — for the most part — the same content and must find other avenues to attract and retain customers. Amazon Music Unlimited, for example, is cheaper for members of Amazon Prime. Apple Music benefits from being part of the Apple entertainment ecosystem and Apple’s ownership of music identification app Shazam. YouTube Music gets its subscribers through YouTube, the most popular streaming app in the world. Spotify, a standalone company, can’t match Amazon’s low price, Apple’s omnipresence or YouTube’s ubiquity.
Instead, Spotify competes on product features it develops in-house. Launched in 2015, Discover Weekly, a personalized playlist filled with recently released tracks, was so popular that people who streamed their Discover Weekly playlists streamed twice as much as people who didn’t. A product that popular helps give Spotify an advantage over its larger competitors. Discover Weekly was launched the same year Apple launched Apple Music. Although many onlookers expected Apple would crush Spotify, Spotify has consistently maintained a sizable lead in market share, and innovation played an important role in holding off behemoths like Apple and Amazon. As Will Page, former Spotify chief economist, put it in his 2021 book Pivot, Discover Weekly “create[d] a moat to protect Spotify’s castle.”
Wrapped follows in Discover Weekly’s footsteps as a moat-building product innovation. The key is Spotify’s ability to get its listeners to talk about Wrapped. One study found that Spotify Wrapped was more effective than Apple Music Replay in users’ willingness to create user-generated content (i.e. share Wrapped on social media). That’s gold in a business where consumers can choose between a number of fairly identical substitutes with similar features. Anything that increases engagement and prevents users from leaving for Apple, Amazon or YouTube is valuable. In that sense, developing a product that becomes a part of the cultural zeitgeist, like Wrapped, is perhaps the biggest competitive advantage a streaming service can have.
There’s nothing artificial about Mariah Carey, who has addressed rumors that her 2024 Spotify Wrapped video message to fans was AI-generated. “Bad lighting and a red lip have you all thinking this is AI??” the vocalist tweeted Thursday (Dec. 5), reposting the video in question from a fan account on X. “There’s a reason I’m […]