Spotify Is Going After the World’s Eardrums

Spotify solidified itself as the audio platform of choice. However, it wants to become something else. Apparently, it is aiming to become the world’s TikTok for audio.

Recently, Spotify racked excellent numbers to boot. Revenue was at $2.9 billion, which was a 27% jump from the same quarter in the previous year. In addition, the sales for their ads grew by nearly 75%, which translates to $375 million.

Their active listeners also grew by almost 20%. Spotify now has 380 million subscribers, 170 million of which are paying subscribers. Stock valuations increased by 10%, adding a value of $5 billion.

Daniel Ek, Spotify’s founder, changed the game. Now, he is planning for something bigger. While other media companies are fighting for eyeballs, Spotify wants to dominate people’s eardrums. Ek has said that audio is an underestimated industry, stating that it should be a multi-billion-dollar industry.

He’s confidently said that audio is Spotify’s war to win. Much of the world of music is still analogue, despite the introduction of digital music decades ago. For one, the radio technology is 135 years old. Despite being old, it has stood the test of time.

The radio industry reaches 3 billion people. Each year, radio stations globally rack $30 billion in revenue from ads. In the US, two-thirds of audio ad spending goes to the old-school radio industry. Ek has said that it is a massive source of revenue that people can shift online.

What Daniel Ek aims to do now is to make Spotify the final frontier of all digital sound. He wants the platform to dominate not just music but also all kinds of things that people hear—talk shows, storytelling, news, education and even audiobooks.

What he wants to accomplish is empowerment, not for him but for creators. He is looking forward to giving audio creators a platform where Spotify can open up new categories for sound. The goal is to have Spotify use its algorithm to deliver content that the user will love—like what YouTube does to its users.

The founder of Bond, a venture capital firm, Mary Meeker, said that smartphones made it easy for people to take photos. As such, platforms like Facebook and Instagram got big. She further said that there was an opportunity to evolve audio in the same way.

Spotify had a rough start. In 2011, it joined tech companies, but it entered a messed-up industry, the music industry. Nevertheless, it got a good start by offering a product that people can use to play songs no matter where they are.

They also introduced a streaming model that many people preferred over piracy. The users got to build their libraries, and this made it easier for Spotify to prevent users from switching to another platform.

However, its success did not come easy. In 2017, Ek noticed that something odd was going on in Germany. Music labels in Germany at that time were uploading audiobooks. The Spotify platform was built for 3-minute songs, so the experience was terrible.

In the audiobooks, fast-forwarding and backtracking was a mess. The chapters were re-shuffled, and they were out of order. Despite this, some audiobook titles were a hit, and this prompted Ek to reconsider.

This incident convinced Ek that the users of Spotify were interested in other things, too. At that time, Apple dominated podcasts. So Ek thought that it was the right time to shake things up a little bit.

In that period, podcasts were not streaming live. Instead, people had to download the episodes. It was at this moment when Ek realized that the Spotify platform was an excellent software for podcasts.

To jumpstart the plan for eardrum domination, Spotify created a buzz in 2021 by signing a $100 million deal with the Joe Rogan Experience. Joe Rogan is one of the biggest names in Podcasting.

Next, Spotify made deals with bigger names like Barack and Michelle Obama. There were also deals with Harry and Meghan Markel. Fans of Kim Kardashian were also in for a show. The first phase of the plan is to dominate podcasts. So they signed these deals to build a catalogue of podcast shows from the biggest stars.

In February of 2021, the company launched an advertising network. The network enables brands to serve targeted audiences. For example, they can show the ads to the brand’s shows or on the podcasts of those who opted in the advertising process.

Spotify is sharing its data. It provides users with tools that help them analyze their performance. They can also measure how effective their campaigns are. On the other hand, its main competitor, Apple, is not as generous to its creators.

The next plan is for Spotify to create another revenue stream for their fans. They plan to give content creators to monetize their fans. One of the pipeline plans is to give content creators empowerment to launch exclusive content, early access or interactive experiences.

The plan is not that far from what Patreon and OnlyFans have. However, Spotify will dominate audio in the same way that some game developers for casino online Canada dominate the gambling industry.