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2023 was a record year for Spotify in terms of subscriber growth, but with sluggish economic growth and the cost of living crisis, how can the music streaming giant continue its solid growth trajectory while managing the transition to a more efficient and profitable business?

Speaking at the Cannes Lions Festival of Creativity 2024, Gustav Gyllenhammar, Spotify’s vice president of subscriptions and markets, said part of the answer lies in reaching new global audiences – both on the artist and audience side – while continually looking for ways to create more value for existing subscribers through new content and. personalization.

Although the Swedish music giant has grown dramatically since its founding in 2008, it is not immune to the economic downturn that many technology companies have faced since the pandemic. In December last year CEO Daniel Ek announced a 17% reduction in the Group’s workforce, citing economic difficulties and a renewed focus on operational efficiency.

Six months later, the company is focusing on new platforms, partnerships and innovation. Gyllenhammar explained to Euronews how international expansion and world music will lead Spotify into a new phase of global growth.

The music industry crosses language barriers

Gone are the days when non-English language music was only a small part of the music industry. As the world has become more diverse and connected, Spotify Record growth in popularity of artists from Southeast Asia, Latin America and Africa.

According to the investor report for the first quarter of 2024 66,000 artists who have generated at least $10,000 (€9,327) through the Spotify appmore than half come from countries where English is not the native language. Latin music, K-pop and Afrobeats as well as other genres from West Africa are enjoying increasing popularity.

Conversely, the increase in international artists attracts a much more diverse group of listeners and Spotify is seizing this opportunity – and the first step is greater exposure and connection with local artists and communities.

“Spotify’s strategy includes connecting with local communities through teams on the ground around the world who work really closely with all players in the music industry.

“We want to support young artists in their careers and develop their music further.”

The key, the company says, is to apply its proven growth strategies from saturated English-speaking markets to new regions by initially focusing on the freemium model and demonstrating the value of the platform to new users.

“Freemium is really the cornerstone of our strategy. The benefits of the premium service only really come into play the more fans use the free service. The global development of the music industry is a project close to our hearts at Spotify.”

One app for multiple audio files

In addition to entering new markets, Spotify sees increasing value for its existing subscribers as an important part of its future growth and operational efficiency. For example, new content such as podcasts and audiobooks are already available. Premium subscribers in some markets.

By integrating additional features into subscriptions, the company can survive any economic uncertainty if users want to reduce their subscriptions, Gyllenhammar argues.

“We offer audiobooks as part of our premium service in many markets around the world, such as the UK and Ireland, and consumers really like this. We want to offer consumers better value for money.”

What is Spotify’s business plan?

Although the number of subscribers worldwide is already over 600 million, Gyllenhammar says there is still a long way to go and the Future of music and the audio streaming looks good.

“I think we’re very pleased with the evolution we’ve seen over the last few years, but as we know, there are eight billion people in the world. We see a phenomenal opportunity to grow in more emerging markets around the world. Music plays so many roles in a consumer’s daily life,” he concluded.

Watch the video above to hear more from the Spotify interview.

Find more content from Cannes Lions here Here.

Additional sources • Filmed and edited by Arnaud Augst