Spotify has been working to make playlists a extra engaging facet of the music streaming expertise – and doubtlessly to make them right into a characteristic that may carry in additional income. Up to now, the hassle appears to be paying off.
In response to co-founder and CEO Daniel Ek, the Sweden-headquartered music streaming service is now host to some 8 billion user-curated playlists, and of these, 725 million have been created for the reason that begin of 2024 alone. That’s on prime of the playlists created by Spotify itself.
“Enjoyable truth: the nation on this planet that makes probably the most playlists per consumer is South Korea – 50% greater than every other,” Ek wrote in a current LinkedIn submit.
And we are able to count on there to be many extra playlists on Spotify sooner or later, as the corporate is now bringing AI know-how to its playlist options.
In April, Spotify introduced the beta launch of AI Playlist, a software that permits subscribers to make use of textual content prompts to robotically create new playlists.
Starting with iOS and Android customers within the UK and Australia, subscribers will have the ability to kind in prompts alongside the traces of “an indie folks playlist to present my mind a giant heat hug,” “enjoyable music to tide me over throughout allergy season,” or “a playlist that makes me really feel like the primary character,” and AI Playlist will spit out a listing of prompt tracks.
Customers may even have the ability to refine their outcomes with further prompts comparable to “extra pop” or “much less upbeat.”
What’s extra, Spotify could also be relying on the recognition of superior playlisting to draw extra customers to its higher-tier subscriptions.
In response to a report in Bloomberg in June, Spotify will likely be launching new playlisting options and track administration instruments as a part of a pricier new tier that can embody HiFi audio – a core ask of Spotify subscribers, and a long-awaited promise from the streaming service.
It’s not clear whether or not AI Playlist will likely be a part of this new tier, which is anticipated to launch later this yr, or whether or not Spotify has different playlist methods up its sleeve.
What is evident is that Spotify has been working so as to add worth to its paid subscriptions at a time when the streaming service (together with its rivals) has been elevating costs – at the least partly on the behest of music corporations which have lengthy argued music is underpriced within the client market.
After instituting its first-ever value hike in the summertime of 2024 – which raised the value of a US particular person Premium subscription from $9.99 per thirty days to $10.99 – Spotify has continued the hikes, elevating its US month-to-month particular person Premium value to $11.99 this spring, and the the UK value for the equal tier to GBP £11.99.
On firm earnings calls, Ek has stated that Spotify has been shifting its focus from constructing a paying subscriber base to rising margins with the intention to guarantee profitability, one thing that, till lately, has eluded the streaming large.
He has additionally stated that, as the corporate raises costs, he desires to make sure that prospects are getting further worth for that cash.
To that finish, Spotify has expanded lately from music to podcasts and audiobooks, which at the moment are a part of its Premium subscriptions. As of final fall, particular person Premium plans include 15 hours of audiobooks per thirty days.
Spotify has additionally launched a standalone audiobook-only tier, at $9.99 per thirty days within the US, and has additionally launched music-only tiers within the US and UK.
Nonetheless, not all of Spotify’s strikes to extend its margins by way of new and differentiated tiers have met with approval from the music business.
US publishers and songwriters are up in arms over a call this spring by Spotify to categorise its default Premium subscription tier as a “bundle,” on condition that it now consists of audiobooks. That’s as a result of, below the US Copyright Royalty Board’s Phonorecords IV settlement, streaming companies will pay decrease mechanical royalties for bundled companies than for standalone music companies.
Spotify’s transfer has resulted within the Mechanical Licensing Collective (MLC) suing the streaming service in US federal court docket.
Among the many MLC’s allegations are that Spotify’s new audiobooks-only tier isn’t what it claims to be, and truly presents entry to music as nicely – at a cheaper price level than the standard Premium tier.
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