Streaming
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There are twin $10 billion milestones served up in the RIAA’s 2022 year-end report on U.S. recorded music revenues: paid subscription streaming revenue reached $10.2 billion over the course of the year; and industry revenues at wholesale reached $10.3 billion, the first time either of those markers have been crossed, the trade body reports.
Those are two headline numbers of the annual report, wherein U.S. recorded music revenues grew 6.1% at retail, from $15.0 billion in 2021 to $15.9 billion in 2022. That marks the seventh straight year of growth for the business, though the percentage of that bump is the lowest since 2015 (+0.9%), the first year that retail revenues began to rise from the industry’s 2014 nadir. (The growth that year was so small, around $65 million, that it was essentially flat for all intents and purposes.) In fact, 2022 is the only year during that time period when growth has not exceeded double digits other than 2020, when a first COVID-impacted year of uncertainty still saw a 9.2% rise in revenue.
Streaming, unsurprisingly, made up the bulk of the industry’s revenues — 84%, up a tick from 83% in 2021, adding up to $13.3 billion in 2022, up 7% from $12.4 billion the year before. Within that, the aforementioned paid streaming chunk was the largest, accounting for 77% of that total for 8% year-over-year growth, and in and of itself making up just shy of 2/3s of the industry’s overall revenues; of the overall paid streaming number, so-called “limited-tier” subscription streaming — including the likes of Amazon Prime, Pandora Plus, Peloton and other fitness or restricted streaming options — grew 18% to surpass $1 billion, coming in at $1.1 billion overall. And ad-supported streaming — like YouTube, Spotify’s free tier or revenues from TikTok — moved up 6% to $1.8 billion, making up 11% of all revenues for the year.
The average number of paid subscriptions in the U.S., meanwhile, reached 92 million, up 9.6% from the 84 million that existed in 2021. (The RIAA notes that this does not include limited-tier subscriptions, and counts “multi-user plans” as one subscription. The overall paid streaming figure of $10.2 billion includes limited-tier.) That growth, while significant given that it is higher than overall revenue growth, is down in both actual numbers and percentage growth for 2021, as was the revenue growth gleaned from paid subs, suggesting that while there’s still room to go higher and records continue to get broken, there may be a slowdown in subscriptions in the future.
Outside of those streaming figures, digital and customized radio revenue — paid out by services such as SiriusXM — inched up 2% YoY, even as SoundExchange payouts declined 3% to $959 million; those other ad-supported platforms such as SiriusXM and other internet radio services grew 28% in revenue during the year, contributing $261 million to the overall pie. That ends a few straight years of growth from SoundExchange distributions, though the overall figure of $1.2 billion from digital and customized radio in general has remained relatively flat for the past several years.
Also within the digital realm, downloads continued their stumble down the proverbial cliff, dropping 20% across the board — both for tracks and for digital albums — to total $495 million in revenue ($242 million for tracks, $214 million for albums). The RIAA notes that in 2012, digital downloads made up 43% of the overall industry’s revenue; in 2022, that number was just 3%. Factoring other formats, total digital revenue was $13.8 billion, up 6.0% from 2021, or 87% of the total business.
For the first time since 1987, vinyl LP units outsold the number of CDs, 41.3 million to 33.4 million (vinyl overtook CDs in revenue in 2020), as its year-over-year growth streak stretches to 16 years — old enough to drive. Total physical revenue was up 4% in 2022 to $1.7 billion, of which $1.2 billion came from vinyl — up 17% YoY, making up 71% of physical revenues. CD revenue, meanwhile, continued to decline despite the one-time pandemic boost of a few years ago, down 18% to $483 million in 2022. Synch revenue also grew, up 24.8% to $382.5 million.
“2022 was an impressive year of sustained ‘growth-over-growth’ more than a decade after streaming’s explosion onto the music scene,” RIAA chairman/CEO Mitch Glazier said in a statement accompanying the report. “Continuing that long run, subscription streaming revenues now make up two-thirds of the market with a robust record high $13.3 billion. This long and ongoing arc of success has only been possible thanks to the determined and creative work of record companies fighting to build a healthy streaming economy where artists and rightsholders get paid wherever and whenever their work is used.”
If the price of an individual streaming subscription plan were adjusted for inflation in 2023, it would cost $13.25 instead of roughly $10 a month, Warner Music Group CEO Robert Kyncl said on Wednesday (March 8) — a statistic that doubled as a plea for streaming companies that have yet to raise fees to get in line.
While several of the big music streaming companies — including Apple, Amazon and Deezer — have raised their baseline prices recently, the biggest one of all, Spotify, has so far held off on raising the $9.99 pricetag on its U.S. premium subscription plan. Though Kyncl didn’t specifically address Spotify on Wednesday, when he spoke at the Morgan Stanley Technology, Media & Telecom Conference, he said companies that haven’t raised their prices are playing a role in the undervaluing of music.
“We are the lowest (cost) form of entertainment,” he said. “We have the highest …engagement, highest form of affinity and lowest per hour price. That doesn’t seem right. It should change in an orderly fashion.”
While Kyncl is far from an unbiased commenter on price hikes — music labels stand to gain significant revenues from DSPs raising their subscription prices — Kyncl says the 12 years he spent at YouTube has shown him companies can raise prices if they have a product consumers cherish.
“YouTube TV has grown its subscription from $35 to $70 while growing … because they have a superior product,” Kyncl said.
During the wide-ranging presentation, Kyncl also expressed empathy for executives at TikTok who are at “a company that’s kind of embattled today with lots of different institutions around the world.”
“As someone who’s kind of gone through that, it is much better to have friends and not fight a war on every flank,” he added, recalling the contentious relationship YouTube once had with the music industry.
TikTok is engaged in ongoing negotiations over remuneration to rights holders, a group that includes Warner Music Group (WMG). On Wednesday, Kyncl noted WMG is open to a friendlier dynamic with the popular music discovery tool so long as it works for “both sides.”
“That’s all I look for, fair setup on both sides and to grow a business together,” Kyncl added.
Abu Dhabi-based music streaming company Anghami says its revenues grew by more than 35% to $48 million in 2022, driven by strong growth in paid subscribers, according to a statement the company released sharing its preliminary unaudited results for last year.
The company says its total number of paying subscribers grew 21% year-over-year to 1.52 million, while the overall number of music streams rose by 20% amid growing demand for Anghami’s music content, roughly 60% of which was Arabic-language in 2022.
“Our ability to provide an exceptional user experience and to deliver the best music and entertainment content in the (Middle East and North Africa) region and beyond is reflected in our strong financial performance in 2022,” Anghami CEO Eddy Maroun said in a statement.
As the most popular streaming platform in one of the fastest-growing streaming markets in the world, Anghami says it will achieve profitability later this year. But the company has faced its first public growing pains in recent months in the form of a lawsuit and regulatory reprimand.
In December, U.S.-based publishing company Reservoir Media and its Middle East partner PopArabia sued Anghami for alleged copyright infringement related to a dozen Western and Arabic songs by artists including Lil Jon and 50 Cent. Anghami has defended its payments to rights holders and called the lawsuit baseless and defamatory.
In January, the Nasdaq market exchange, where Anghami is publicly traded, notified the company that it was in violation of a filing rule requiring Anghami to submit a balance sheet and income statement to support its interim results for the second quarter ending June 30, 2022. The company had only submitted a press release with financial results for the period.
The regulatory flag did not affect Anghami’s listing or ability to trade on the exchange, and Anghami apparently remedied the issue this month by filing unaudited condensed financial statements for the first half of 2022 and 2021.
However, in a Feb. 27 filing, Anghami noted that its independent auditor, Ernst & Young Middle East, resigned this year and has been replaced by Grant Thornton. Ernst & Young audited Anghami’s financials for 2021 and 2022 without issue, but did include paragraphs in each of the year’s reports “regarding substantial doubt about Anghami’s ability to continue as a going concern,” Anghami said in the filing.
Grant Thornton is expected to release an audited version of the company’s full-year 2022 results by mid-April.
Spotify unveiled a slew of new features and touted its commitment to music discovery in a sprawling, 90-minute Stream On presentation Wednesday (March 8). CEO Daniel Ek called it “the biggest” transformation the platform has gone through in a decade.
“We hear the same things again and again from the creator community,” Ek told the Stream On audience. “Get me closer to the fans, give me more ways to engage, and help me better monetize.” These three imperatives were the thread that connected the many, many initiatives Spotify extolled on Wednesday.
Vertical Feed, Previews and Pre-Saves
The most noticeable change designed to make Spotify “feel alive,” as Ek put it, was the introduction of the swipe-able vertical feed, which replaces the old static carousels of playlists and recommendations. The new feed is video-based, and it will play previews of music and other audio content, like podcasts and audiobooks, in what Spotify co-president Gustav Soderstrom called “a powerful new way to get that first listen.”
“When I open my homescreen, I won’t have to choose what I might be interested in just based on a cover art that I’ve never seen before, or an episode name I’ve never heard of,” he added. “Instead, I can instantly hear the most interesting part of a song or an episode.”
If the new feed is meant to pique the interest of curious fans, the new pre-save feature allows artists to capitalize on fan interest months before a potential release. Artists have been using third-party technology to run pre-save campaigns for years, but Sulinna Ong, Spotify’s global head of editorial, suggested that Spotify’s pre-save function would resonate in a different way because it’s a dedicated listening service.
“There’s a disconnect between where music is being teased and where music is actually being streamed,” she noted, in what could be interpreted as a subtle shot at TikTok. “The most powerful time to reach fans is when they’ve chosen to engage with music, like when they open up Spotify.”
Fans who pre-save a release will be notified when the song or album comes out. Spotify’s data indicates that 80% of pre-savers return to the platform to stream the song or album during their debut week.
Statistics like these were sprinkled throughout Stream On by the platform’s executives. Sometimes they were testaments to Spotify’s enormous reach, with Ek noting at one point that the platform served more than 10 million creators and enjoyed more than half a billion listeners spread across 184 markets.
In other instances, the numbers served to illustrate the power of Spotify’s tools. “These days, Spotify recommendations drive close to half of all user streams,” Soderstrom said. “Each time your music gets played on a playlist like Release Radar, you receive, on average, three times more streams from that listener over the next six months. And when a listener decides to follow you, they listen to, on average, five times more of your music.”
This, he continued, sets Spotify apart from platforms that deliver “just a fleeting moment of viral fame,” in what sounded like another jab at TikTok.
Discovery Mode and Smart Shuffle
Interested in learning about the effectiveness of Discovery Mode, which allows artists to take a lower royalty rate in order to gain more algorithmic exposure on the platform? Spotify had some numbers to share.
“On average, we’ve seen users save Discovery Mode songs 50% more often, add them to playlists 44% more, and follow the artists 37% more,” said Joe Hadley, the streamer’s global head of artist partnerships and audience. “And that’s just what they see in the song’s first month of Discovery Mode use.” He hinted that the program was especially powerful for new artists by stating that “algorithmic recommendations” are responsible for one-third of all new artist discoveries on Spotify.
Those algorithmic recommendations also factor into Smart Shuffle, a new feature that augments user-created playlists with Spotify’s picks — all of which are informed by the listener’s history. Users often heavily stream these new playlists “for the first several months after creation,” Spotify wrote on its blog. “But over time they stream these playlists less frequently in favor of new music or mixes.” Smart Shuffle aims to “breathe new life” into those old collections of songs by “shuffling tracks and adding new, perfectly tailored suggestions.”
Marquee and Clips
Spotify also cited stats to demonstrate the impact of Marquee, which offers full-screen sponsored recommendations for new releases. “On average, Marquee is 10 times more cost effective at getting listeners to stream your music on Spotify than ads on the most popular social media platforms,” Ong said.
Another feature that Spotify rolled out to a wider user base through Spotify for Artists is called Clips, which lets artists add 30-second videos to their profiles. “We built Clips to give artists a platform that inspires fandom and long-term success, not quick hits of content that just tap into the latest meme,” Spotify explained in a video about the feature. “Clips… help drive metrics that really matter to your career, like saves, follows, and streams.”
Concert Listings and Fans First
Last summer, Spotify announced that it had joined forces with Ticketmaster, AXS and more on a new Live Events Feed that captures “most of the world’s concerts” in major markets. Executives reaffirmed the platform’s commitment to this initiative at Stream On. Ong said that Spotify listed over 840,000 shows last year and promised that, going forward, “personalized concert listings [will be] featured more prominently across the app.”
Hadley picked up the thread, noting the platform will also now surface an artist’s upcoming gigs in the app’s “Now Playing” view. “It’s one of the most powerful places to market your shows and will grab your listeners’ attention right when your music resonates most,” he said, adding that fans can now tap a button marked “Interested” for concert listings, which adds those shows to a personal gig calendar in the app’s Live Events feed.
On top of all this, Spotify announced that it would expand its Fans First program in the U.S., which will ensure that an artist’s top listeners “are first in line for merch exclusives and ticket pre-sales by sending them emails and notifications to let them know when they have special access,” said Ong.
Spotify CEO Daniel Ek has been envisioning this day — the launch of several new features and key changes, presented at the company’s Stream On event in Los Angeles on Wednesday (March 8) — for quite some time. The first iterations of Stream On 2023 existed “about two years ago,” Ek tells Billboard. “We ramped it up seriously, like, 18 months ago, and then 12 months ago, it was like, ‘Wow, okay, we need to bundle this thing, that thing — put it all together now.’”
The result was a series of innovations rolled out simultaneously: a new vertical-swiped homepage with an interactive feed for Spotify’s mobile app; the expansion of video-based tools like Canvas, Spotify Clips and Previews, that rely on looped visuals and exclusive content from artists; greater access to its Discovery Mode program, which trades algorithmic exposure for lower royalty rates; and “countdown pages,” a long-awaited pre-save feature for upcoming albums. Some of these features have been long in the works, and have already drawn comparisons to visual-based platforms like TikTok and Instagram, but the 90-minute upfront (which also included presentations by Spotify co-president/chief product officer/chief technology officer Gustav Söderström, global head of editorial Sulinna Ong and global head of artist partnerships Joe Hadley, among others) was aimed at optimizing the listener experience and amplifying artistic voices on the platform. As Ek directly told creators watching the global livestream: “Spotify is open for business.”
Shortly after the Stream On event, Ek sat down for a rare Q&A about the ambitious rollout, heightened tech competition, acknowledging Geo Z listener habits and not being caught up in the “time on app” craze. (Ed. Note: this interview was been edited for clarity.)
During your Stream On presentation, you spoke about how this is the most dramatic period of innovation for Spotify in a decade. Why now? Why this moment?
I mean, there are so many aspects of this that probably won’t get the spotlight. As an example, and Gustav mentioned this on stage, we’ve kind of rebuilt. We’re known for our Discovery platform, and for how good we are at machine-learning and AI and recommending new stuff. But we’ve actually, underneath the surface, redone that entire system, and meantime, our designers have obviously been tinkering around with the best way of promoting content the best way for discovering content.
And, in the meantime, our artist teams have been expanding our Canvas programs — I think we’re up to 70% of covers on Spotify now having some sort of Canvas. More and more artists were taking advantage of the platform, with lyrics and Canvas and all these things already, and we saw that the more rich storytelling we could do on the platform the better it would be. And then, couple that with this algorithm- and machine-learning you need underneath all of that to be able to do this and have a magical experience, all three of them started coming together. And that was when I said, probably 18 months ago, “Okay, we need to pull all of this together as one — because this will be a massive thing, and we can’t do this as separate parts.”
I think that there are two types of companies when when you’re developing products: One tries to get it all together, and [make] it beautiful. Generally at Spotify, we are more kind of agile — we release things quite early, we test a lot of things, a lot of things don’t work, some things work and we double down on them. But we felt this was such an important step that we needed to kind of like bring it all together and release it as one thing, because otherwise, people wouldn’t understand it, and it wouldn’t get the right reception from consumers, but also — frankly — from creators as well.
You spoke about how “individuality and creativity” are being prioritized by this new interface. How much of that is being driven by the way Gen Z listeners want to engage with music over passive listening — is that a big part of what you’re rolling out?
Absolutely. You’re 100%, right, it’s about looking towards younger consumers for inspiration. And I’m a firm believer in the [William Gibson] quote, “The future is already here — it’s just not very evenly distributed.”
I’ve got two young kids, and quite often, you can just look at your own kids and see what they’re doing, see a glimpse of the future. So that’s definitely been part of it, but I do think that oftentimes, when you look at these types of things, there’s a universal truth in what’s happening here. So yes, younger [listeners] are more interested in visual discovery, and all those things that they’re used to because of all the other apps and platforms and other stuff. But the reality is, if you think about it, in the music industry, when we went from having a radio to MTV, it was a hell of a lot better, and it allowed totally different artists to get a new way of communicating. And that probably meant some artists actually weren’t going to be as successful as MTV took off, but there were other artists that were excellent storytellers visually, too. Michael Jackson’s “Thriller,” how the storytelling came alive — the sort of backstory that came in this music video — that was one way, right?
The truth is, as someone who grew up with MTV — funny side note, I actually learned how to speak English through MTV — I kind of feel like we’ve been relegated to, just press play and listen to the background. But as more and more music became playlists, there are all these artists that I don’t know anything about. I don’t know what they look like, and [have] no idea who they are, how they express their individuality and creativity. And so what we’re announcing today is really a chance for them to tell part of the story of what they want the world to see, as part of who they are, and get a chance to build connection. And when we’ve tested this concept with artists, the response is exactly that. That’s not just among younger [people], but even slightly older people too. When you discover someone, having this sort of richness, being able to see the person, to be able to see their vision come to life, builds that connection.
When you look at how much of this presentation today emphasized video expansion — from Previews to Spotify Clips to extending video with podcasts — how much are these innovations driven by feeling in your gut where things are headed, and how much is driven by competition on other platforms and social media?
A bit of both. I think everyone who says that they’re not inspired by anything that’s going on around them, it’s complete bullshit, to be honest. So I mean, I’ve played around with everything — I play around with the Voice apps, where you can Auto-tune yourself to sound really good. We take inspiration from all of that, of course. But we try to also look at more than just copying features for features’ sake — we try to look for, “What are the needs?”
If you want to find out what Spotify is going to do, it’s actually very simple. All you’ve got to do is look for a big consumer need and a big creator need, and when there’s a win-win between the two of them, that’s when we will do something. It’s really as simple as that. And so that’s the bar for me: is this something that consumers want, first and foremost, because if you don’t want it? It doesn’t matter that the creator wants it — it’s not going to be a great thing. And vice versa: if the consumer wants something, but the creator hates doing it, it’s not going to be sustainable long-term. So you’ve got to try to find out what that middle [ground] is. And a lot of times, I wish I could say that there’s this kind of defining moment, where you sit together in a room and figure it out. It’s not how innovation works, in my opinion. It’s organic.
You mentioned podcasting — we started uploading lots of videos there. Canvas has worked out really well. So it was this natural evolution where we started seeing that visual expression together. One of my fears honestly was like, does that mean we’ll be more like the other platforms? But both because of the types of creators that we have, and also the fact that we don’t expect you to sit two hours in front of that endless screen and watch stuff — we expect you to find something you really like, press play, put it in your pocket, and use that visual way of going from point A to point B faster. We’ve done the algorithms, we’ve done the UX, to do exactly that, opposed to some of these other social platforms that want you to stick around and watch the entire time.
I wanted to ask about something that Gustav said during the presentation that I found really interesting: “Our goal is not to steal time — it’s to help users save time.” There’s so much emphasis across every platform right now of “time spent on app” — getting users from a few seconds with an app open to a few minutes — whereas Spotify wants users to find something they like and then keep it moving.
Yeah, it’s exactly right. I call the concept “nutritious versus delicious.” I feel like everyone’s trying to go towards shorter, shorter, shorter-form content, more bite-sized. And then we have this counter-movement with podcasts, where someone’s willing to listen to two hours of someone going super deep on a very slim topic as well. We obviously want to allow creators to create whatever way they want to do, but out of the two extremes, we’re definitely more in the latter camp. We want creators to really form a connection with their audience rather than just trying to get a viral clip going, and next morning, it could be 50 other people who are successful [instead].
In terms of Discovery Mode, and giving artists a better chance of finding that first play and gaining a new listener — is there any concern of that tool like that losing some efficiency once you open it up to a much wider population of artists, where at some point it becomes to discern what’s worthwhile and what’s noise? Does that tension exist for you?
I mean, there’s absolutely that kind of tension. However, I think this is the beautiful thing — with these algorithms and personalization, we’re not all the same. So the kind of artists you like and the kind of artists I like might be very different. And some of these artists will get exposed to people more like me, and then other artists similar to you will get that exposure. There’s room for all of these things to play together, whereas in the past, you had a commercial radio station that had like 50 or 60 songs on rotation. We can actually cover a lot more than ever before in terms of giving artists exposure, and I think that’s also visible in our numbers.
I talked about onstage the notion that even the 50,000th most-streamed artist, which is kind of far down the list, is still making probably $50,000 across not just Spotify, but across all the other recorded music sources. And if you add touring, if you add all the other stuff, that’s probably a full time musician. It’s a very different music industry today. So I see the tension — and obviously, you’re right, on the long tail of things, it means some people won’t get that attention. But I think on the quality side, we will be good, and we will constantly improve, just like we’ve always had to, to give you better and better recommendations.
You are building Spotify for the long haul, and today was about continuing that building process. I was curious about how you strike the balance between growth and over-extension — finding the right opportunities that make sense for Spotify, without becoming too unwieldy?
I mean, look, it’s not easy, and I wish there was like a silver-lining way to answer it, but I think it comes back to what I talked about. We have three main constituents at Spotify, and two of them are dominant, and the third one, I have to pay attention to. The three main constituents are creators and consumers — they’re the ones that are front and center in everything that we do — and then the third is Spotify itself, my employees, shareholders, all that other stuff. So as I’m working on something, or we’re considering something, it really honestly is as simple as I mentioned: Do I believe that there’s a win-win-win, that gets us there all the faster?
I will probably do stuff that’s great for consumers and great for creators, and not great for Spotify. We’ve done a lot of those things, but I can’t do that endlessly — we’ve got to run a business as well. So it’s about trying to have those three things, the list that every decision goes through. It’s a very simple thing. Is this a win-win for creators and consumers, and will this work out for Spotify? If the answer is yes, then we will do it.
In 2022, about 57,000 artists earned more than $10,000 in royalties from Spotify, the company disclosed Wednesday (March 8) in the latest report published to Loud & Clear, a microsite that provides transparency into the amounts Spotify pays to creators on its platform.
That works out to just 0.6% of artists on Spotify making at least $10,000 in royalties. But using Spotify’s narrow definition of “professional or professionally aspiring” artists, more than a quarter of that group earned more than $10,000 on the platform in 2022.
How did Spotify get to that figure? Of the 9 million artists who have uploaded music to Spotify, 3.4 million have published 10 or more songs. From that group, only 213,000 artists average at least 10,000 monthly listeners, an amount Spotify calls “the beginning of an audience.” For context, newcomer Peyton Parrish, the No. 99 artist on Billboard’s Artist 100 chart, has 1.26 million monthly listeners on Spotify. There were 57,000 artists with at least 120,000 monthly listeners in 2022, according to Loud & Clear.
A similar data point came from Spotify’s integration with Songkick, Ticketmaster and other ticketing platforms: In 2022, 189,000 artists had at least one ticketed concert or event. Spotify says that “demonstrat[es] professional activity outside streaming.”
The number of artists making at least $10,000 on Spotify increased 144%, up from 23,400 in 2017. The upper echelon of Spotify payouts grew at about the same rate: 1,060 artists made more than $1 million in royalties in 2022, a 130% increase from 460 in 2017.
But the growth in the number of artists hitting these mile markers hasn’t kept pace with the overall growth of the platform. From 2017 to 2022, Spotify’s subscriber base grew 189% to 205 million, the number of ad-supported monthly active users rose 217% to 295 million and total revenues (which now includes some podcast advertising) increased 187% to 11.72 billion euros ($12.4 billion).
Spotify has announced the addition of new landing pages designed to help artists promote upcoming releases, including the option to add a pre-save button directly on Spotify.
Dubbed “Countdown Pages,” the new feature also allows artists to tease exclusive content, pre-order merchandise, preview track lists and add a timer counting down to release day all in one place. It was introduced at the company’s Stream On event in Los Angeles on Wednesday (March 8) by global head of artists partnerships and audience Joe Hadley and head of editorial Sulinna Ong, with help from the Jonas Brothers.
The pre-save feature is a long-awaited addition to the streaming platform. For years, artists have been creating their own campaigns via third-party pre-save services to get fans to save upcoming releases to their playlists before they’re released. Many believe that having impressive pre-save statistics can help artists, particularly DIY and emerging talent, receive better consideration for Spotify’s playlists given that a high amount of pre-saves likely indicates high demand.
With Spotify’s new in-house pre-save option, fans who use the feature will get a push notification when the release is out, urging them to come back to the app and stream it. According to Spotify’s own research, over 80% of pre-savers stream the song within its debut week, and the new push notifications may boost this conversion rate.
Beyond the Jonas Brothers, Spotify showed clips of other popular artists endorsing the new feature, including Jennifer Lopez, Karol G, Luke Combs and 6lack.
“There’s a disconnect between where music is being teased and where music is actually being streamed,” said Ong, likely referencing the increased popularity of teasing songs on TikTok. “The most powerful time to reach fans is when they’ve chosen to engage with music, like when they open up Spotify. That’s why we’ve built Countdown pages.”
The Countdown pages will also allow the artist to incorporate Clips — aka short vertical video messages, similar to Instagram and TikTok Stories — to promote upcoming releases. Though Clips are not new on Spotify, the feature was previously limited to specific playlists and top stars. Slated to open up to more artists this spring, Clips can be featured on both Countdown Pages and an artist’s Spotify profile.
Spotify officially announced that it has expanded access to Discovery Mode, a contentious program that gives artists the chance to gain more algorithmic exposure on the platform — through Spotify Radio and autoplay — in exchange for a lower royalty rate. The company made the announcement during its Stream On event on Wednesday (March 8), where CEO Daniel EK unveiled what he described as “an entirely new and updated Spotify experience.”
Artists or their teams can now easily enter tracks into Discovery Mode through the Spotify for Artists tool as long as their distributors are participating in the program. “While labels can continue to access Discovery Mode through our team, I’m excited that Discovery Mode is now available directly within Spotify for Artists today,” Joe Hadley, the streamer’s global head of artist partnerships and audience, said on Wednesday. “Now, thousands of independently distributed artists and labels have access to Discovery Mode.”
Managers who are eager to get their artists’ music in front of as many people as possible have been enthusiastic about Discovery Mode — telling Billboard it’s a “brilliant tool” that can yield “incredible results,” for example. On the other end of the spectrum, music industry trade organizations and members of Congress alike have denounced the program as a new digital form of payola that will eventually lead to an overall decrease in the amount of royalties flowing from Spotify to labels and artists. Several members of Congress also questioned Spotify about whether Discovery Mode meets guidelines set forth by the Federal Trade Commission, which notes that “disclosures of paid content” should be “clear and conspicuous.”
Spotify’s announcement about Discovery Mode’s expansion should not come as a surprise to much of the music industry — for several months, it’s been quietly emailing artists to tell them they can use the program through Spotify for Artists. “We’ve been in testing mode, but the results speak for themselves,” Hadley told the Stream On audience. “On average, we’ve seen users save Discovery Mode songs 50% more often, add them to playlists 44% more, and follow the artists 37% more. And that’s just what they see in the song’s first month of Discovery Mode use.”
The streaming service first announced that it was testing Discovery Mode towards the end of 2020. In a blog post at the time, Spotify said it developed the program in response to artists “tell[ing] us they want more opportunities to connect with new listeners.” Discovery Mode provides artists and labels a chance to “identify music that’s a priority for them, and our system will add that signal to the algorithm that determines personalized listening sessions.”
“To ensure the tool is accessible to artists at any stage of their careers, it won’t require any upfront budget,” Spotify wrote in its blog post. “Instead, labels or rights holders agree to be paid a promotional recording royalty rate for streams in personalized listening sessions where we provided this service.” Last year, managers told Billboard that the royalties they received on plays from Discovery Mode were 30% less than the royalties they received from plays elsewhere on Spotify.
In 2021, Representatives Jerry Nadler (D-NY) and Hank Johnson Jr. (D-GA) expressed their concerns about Discovery Mode, noting in a letter to Spotify that it could “set in motion a ‘race to the bottom’ in which artists and labels feel compelled to accept lower royalties as a necessary way to break through an extremely crowded and competitive music environment.” Last year, Reps. Yvette D. Clarke, Judy Chu and Tony Cardenas also wrote to Spotify, worrying that Discovery Mode “preys on unwitting” listeners who aren’t aware they’re being served a song thanks in part to a promotional program with a back-end cost.
Spotify has defended Discovery Mode by touting its impact on artists’ streams and pointing to supporters, including TuneCore and Terrace Martin, that offer positive testimonials about the program on the company’s website. “Artist and label teams have told [us] for years that they want more agency in reaching new listeners and driving meaningful connections on our platform,” Spotify said in a statement last year. “Discovery Mode, in its early phase, delivers just that.”
The streaming platform also offers artists access to another paid advertising program called Marquee, which shows users a full-screen recommendation for a new release. Spotify has touted Marquee’s bang-for-buck, writing last year that it “delivered 10x more Spotify listeners for every dollar spent on similar social ads” and “a 100% higher click-to-listen-rate, on average, than similar social ads.”
During the company’s Stream On event, it announced that Marquee, which had previously just been available to artists in the U.S., will expand to acts in the U.K. and Australia as well. “It’s one of the most effective tools out there to market new releases,” said Sulinna Ong, Spotify’s global head of editorial.
Spotify is launching a TikTok-like vertical-swiped homepage to its mobile app. Though Bloomberg leaked the news last week, the new homepage was officially unveiled by company executives at Spotify’s Stream On event Wednesday (March 8).
The new homepage — unveiled during the demonstration led by Spotify co-president/chief product officer/chief technology officer Gustav Soderstrom — will trade Spotify’s formerly static carousels of playlist and song recommendations in favor of a vertical, swipeable, video-based interactive feed which will automatically play previews of music, podcasts and audiobooks for users in hopes of helping them discover new content.
The top of the homepage will continue to boast a few quick links to help users instantly find their favorite podcasts, audiobooks and playlists.
“When I open my home screen, I won’t have to choose what I might be interested in just based on a cover art that I’ve never seen before, or an episode name I’ve never heard of,” said Soderstrom. “Instead, I can instantly hear the most interesting part of a song or an episode.”
The new video-centric feed, as well as other announcements at Stream On, represent a move away from positioning Spotify as a solely audio-focused company and toward creating a more audiovisual platform. As Spotify CEO Daniel Ek noted in his introduction, “In the past few years, people likely thought of Spotify as being the best destination for listening. But today, this evolution is really about bringing Spotify to life.”
Spotify has spent years trying to assert itself as the world leader in audio products, diversifying its offerings from music to exclusive podcasts, live audio and — most recently — audiobooks. But not all of these pushes have played out well for the company. At least six of its live audio programs, for example, were canceled after roughly a year.
The company began to offer more visuals in recent years to strong success, including adding video capabilities to some podcasts and its Canvas feature which lets artists showcase a looping video to accompany their songs. According to Spotify, songs that use Canvas are 145% more likely to get track shares, while listeners are 5% more likely to continue streaming them.
The Canvas feature will now play an even bigger role at Spotify, Soderstrom noted, as artists’ Canvases will now serve as the visual backdrop for audio previews on the app’s newly designed homepage.
The news of its more interactive, vertical homepage marks Spotify as the latest major tech company to seemingly take cues from TikTok. Instagram and YouTube have made pushes to popularize short-form, vertical video offerings on their sites in the last few years, while on the music side, apps like Discz, a swipeable music discovery service à la Tinder, have proven there’s an appetite for interactive music recommendations. SoundCloud followed suit this week as well, announcing a vertically-based Discover page that uses AI to power tailored recommendations.
While Selena Gomez has been dealing with some tough online drama over the past few weeks, the star’s fans have been supporting her every step of the way — especially when it comes to her music.
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Gomez’s songs (on which she is the lead artist) registered 16.1 million on-demand U.S. audio streams in the week ending March 2, according to Luminate, up from 11 million the week before. The new total is her best audio streaming week since the week ending Nov. 10, 2022 (17.6 million), which was most likely linked to the release of her Selena Gomez: My Mind & Me documentary on Nov. 2.
That extra 5.1 million streams in the U.S. comes out to a bonus $27,030 for the recording rights holders, plus another $6,245 in publishing revenue, Billboard estimates.
While there is no clear cause of the boost, Gomez has been in the headlines quite a bit recently related to her alleged feud with Hailey Bieber, who is married to her ex-boyfriend, Justin Bieber. It all started after the Only Murders in the Building star confessed on TikTok in February that she’d over-laminated her eyebrows. Kylie Jenner then shared a photo with her friend Hailey holding the camera close up to their own professional-looking brows.
Fans believed that the similarities between the posts was no coincidence, and that perhaps the reality star and model were making fun of Gomez. “This is reaching,” the Kardashians star commented about the situation on a TikTok. “No shade towards selena ever and I didn’t see her eyebrow posts! u guys are making something out of nothing. this is silly.”
At the time, Gomez added that she’s “a fan of Kylie,” though she has since commented on fan-made TikToks shading Hailey, writing “I love you” to one fan who slammed the Rhode founder for being a “nepo baby” and a “mean girl.” On a resurfaced video of Hailey pretending to gag at the mention of Taylor Swift’s music, Gomez replied, “So sorry, my best friend is and continues to be one of the best in the game.”
However, most recently, Gomez has encouraged her followers to be more empathetic. “Please, please be kinder and consider others mental health,” Selena commented on one of her recent TikToks sharing her makeup routine. “My heart has been heavy and I only want good for everyone. All my love.”
—Additional reporting by Trevor Anderson & Colin Stutz