[00:00:00] Marcus Johnson: Hey, gang. It's Monday, May 18th. Uh, Danny, and listeners Welcome to Behind the Numbers, an EMARKETER podcast. I'm Marcus. Joining me for today's conversation, we have our senior editor of our marketing and advertising briefing, uh, based in New York. It's Daniel Konstantinovic.

[00:00:19] Daniel Konstantinovic: Hello. Happy to be here. How you doing, Marcus?

[00:00:21] Marcus Johnson: Yeah, very good, mate. How are you?

[00:00:23] Daniel Konstantinovic: I'm good. It's a gray, gloomy day here in Brooklyn, but

[00:00:26] Marcus Johnson: that's all

[00:00:26] Daniel Konstantinovic: right. That's good. I know,

[00:00:28] Marcus Johnson: May 18th.

[00:00:29] Daniel Konstantinovic: Yeah. Someday we'll have the sun.

[00:00:32] Marcus Johnson: I know. When it happens quick, it's definitely a light switch moment, so I guess enjoy it whilst you can, 'cause it gets ... it gets, uh... it turns to Sahara Desert real fast.

[00:00:42] Marcus Johnson: Um, today's fact. Okay, so the mo- I thought this was quite fitting 'cause we're talking about Spotify. So I've got, uh, the most streamed songs ever on Spotify. I've got the most, lots of things on Spotify, so maybe we could do a quick quiz, Danny. [00:01:00] Um, but, uh, so I'll give you... If you can name something in the top three, then you get the point.

[00:01:06] Marcus Johnson: Oh, gosh. Can you name... The first one's pro- probably the hardest, maybe the hardest. Uh, most streamed songs ever on Spotify. Give you half a point for an artist.

[00:01:16] Daniel Konstantinovic: I'm gonna guess, uh, Taylor Swift perhaps is one of the most streamed. Do you think? She's, she's, she's in the top. One of the top artists. Yeah, she's one of the top ones.

[00:01:24] Daniel Konstantinovic: Oh, man. Yeah. You know, I feel like you're gonna say what it is, and I'm gonna be like, "Of course." Yes. How could I not get that? That is 100% what's about to happen. But, uh, Gangnam Style. It's coming back in a big way.

[00:01:35] Marcus Johnson: Uh, no, surprisingly. Uh, most streamed songs, Taylor Swift, she has... Oh, she's not. Oh, that is shocking.

[00:01:47] Marcus Johnson: She's not in the top 20.

[00:01:50] Daniel Konstantinovic: Oh, that is shocking. What? Well, I guess sh- like, compared to other artists, she hasn't been around as long- Ah ... right? Well, that's part of it. I'm trying to think of, like,

[00:01:57] Marcus Johnson: who- Yeah, that's definitely part of it. Yeah. Um, [00:02:00] the most- Gotta be someone who's

[00:02:00] Daniel Konstantinovic: been around the block ...

[00:02:01] Marcus Johnson: most streamed song, well, kind of.

[00:02:03] Marcus Johnson: Uh, The Weeknd's Blinding Lights is the, Spotify's most streamed song ever, with over- Right ... five and a half billion plays as of April 2026. Um, I had to go back and listen to it to remember what that song was. It's a good song. I, I like it. It's good, but most ever is surprising. Yeah. Ed, Ed Sheeran, Shape of You is second, 4.9 billion, and then Sweater Weather by The Neighbourhood.

[00:02:29] Marcus Johnson: Great song. Oof. But third place. That is

[00:02:31] Daniel Konstantinovic: so surprising. Yeah. Yeah, 4.6 billion. You know, I remember reading years ago that Selena Gomez was one of the most streamed artists on Spotify, and that really surprised me. Hmm. Okay. 'Cause, you know, out in the street, you don't really meet a lot of Selena Gomez mega fans.

[00:02:44] Daniel Konstantinovic: But I guess they're out there.

[00:02:45] Marcus Johnson: Is she somewhere on this list? No. Also not here. Maybe she's been

[00:02:49] Daniel Konstantinovic: booted off. She also hasn't really done a lot of music in quite a while.

[00:02:52] Marcus Johnson: Yeah. Yeah, that's true. This is fluid. Most- Streamed artist of all time, um, I'll just give you the point for this one, Taylor Swift. [00:03:00] She is the most- Okay

[00:03:00] Marcus Johnson: streamed artist. She just doesn't have one of the most streamed songs, followed by Bad Bunny and then Drake. With The Weeknd is actually fourth, so he's up there too for that. Um, most streamed album? I don't have a clue. Um... It's one from Bad Bunny. Um, so he's got- Oh, really? Well, I was gonna

[00:03:16] Daniel Konstantinovic: guess, uh, Rumors by Fleetwood Mac maybe- Most streamed album

[00:03:19] Daniel Konstantinovic: but that was a real shot in the dark. It's

[00:03:20] Marcus Johnson: a guess. Uh, most streamed podcast. It's not this one. The Joe Rogan Experience probably. Exactly, yep. Uh, and then the Ger- yep, The Joe Rogan Experience number one. A German language show, uh, is second, called, uh, Gemischtes Hack. And then, uh, Crime Junkie is in third place.

[00:03:36] Marcus Johnson: And then most streamed audiobook, last one for you. Oh, I don't know. Harry Potter? I, I would have thought that Rowling would've been up there as well. Um, or that, uh, Tolkien would've been, uh, first, but he's, he's second. Uh, most streamed, uh, audiobook on Premium, A Court of Thorns- Oh, yes. Yeah ... and Roses by Sarah J.

[00:03:56] Marcus Johnson: Maas, I think is how you pronounce it. Tolkien's Fellowship of the Ring is [00:04:00] second. Um, Fourth Wing by Rebecca Yarros is third. Interesting.

[00:04:06] Daniel Konstantinovic: Yeah. I, I, I keep seeing people all over the city reading the Court of Thorns and- Oh, okay.

[00:04:12] Marcus Johnson: I hadn't heard of it, but- ... that series.

[00:04:13] Daniel Konstantinovic: Yeah, an incredibly popular, uh, fantasy novel series that feels like it kind of, at least to me, came out of nowhere.

[00:04:20] Marcus Johnson: Yeah, yeah. Well, she's got three of the top 20. Uh, she's number one. A Court of Wings and Ruin, seven, A Court of Silver Flames, 16. So, uh, very popular indeed, it seems. Anyway, uh, today's real topic, uh, the big three questions surrounding, of course, Spotify.

[00:04:41] Marcus Johnson: All right, let's set the table. In Q1 2026, how did Spotify do? Total revenue grew 8% in the quarter. Q1 year over year, that's half as fast as last Q1, so not brilliant. Revenue from premium, that's ad-free users, people who pay to get rid of ads, uh, grew 10%. That's down from 16 [00:05:00] last Q1. Revenue from ad-supported users, uh, folks that have ads, fell 5% in the quarter.

[00:05:07] Marcus Johnson: Uh, last Q1 it was up 5%, so a swing from plus five last Q1 to negative five this Q1 for the ad-supported folks. Spotify has 761 million monthly active users, adding 10 million in Q1. That's better than the three they added for Q1 a year ago. So that's how Spotify's done. We're here to talk about the three biggest questions for the company at the moment.

[00:05:31] Marcus Johnson: Um, Danny, what do you wanna throw on the table to, to kick us off?

[00:05:34] Daniel Konstantinovic: Well, since we were talking about the ad revenue- Mm ... uh, decline, I feel like that's a good place to start. Yeah. And my question is, uh, sort of inspired by one Ross asked in our, uh, recording about Netflix, which is-

[00:05:45] Marcus Johnson: Ross Benes, yeah. Yes

[00:05:46] Daniel Konstantinovic: Uh, senior analyst.

[00:05:47] Daniel Konstantinovic: Yep. Right. Sorry, I should have, uh, included his full, uh, government title. He doesn't really deserve it, but- ... Stuart ma- makes me say it. Yeah, we'll work on that. Um, my question is how badly does Spotify even [00:06:00] need to increase its ad revenues? Um- Hm ... the company clearly makes the overwhelming majority of its revenues from subscriptions.

[00:06:09] Daniel Konstantinovic: Yeah. Like, 92%, uh- Yes ... of its revenues come from subscriptions. Mm-hmm. Uh, and you see, you know, even though there has been a, a slowdown there in growth, um, uh, this earnings showed that that is still where the majority of its revenues are coming from. Mm-hmm. So if things keep humming along there and the ad business is struggling, it's had a very slow, uh, crawl over the last several years.

[00:06:32] Daniel Konstantinovic: What... Is there really an urgency there to increase those revenues? I f- I feel sort of- Mixed on it. I'm not entirely sure what my answer is.

[00:06:39] Marcus Johnson: It's a good question. They, they've been getting most of their revenue from, uh, the premium folks for years now. Going back, I just checked, going back to at least 2020, it's been about 90% of their money has been coming from that line item.

[00:06:51] Marcus Johnson: Um, so it's not really shifted over in terms of the share. My question related to that was why has Spotify's ad revenue stalled, and can it [00:07:00] jumpstart this line item? Uh, 'cause even though the share has been, stayed roughly the same, uh, Q1's 5% drop marked the fourth straight quarter of negative ad revenue growth, going from 0.7, uh, to last, last Q1, or Q2, sorry, uh, to negative five, and then negative five roughly, and then, uh, negative five again this Q1.

[00:07:24] Marcus Johnson: So I was trying to figure out what's, what's happened. The previous year, 2024, it was up 10%. Last year, ad revenue fell 2% for the company. And it's strange, Danny, 'cause the number of ad-supported people is going up. Growth has been really strong over that same four-quarter period where it's seen, uh, four straight quarters of, um, negative growth.

[00:07:48] Marcus Johnson: They've added 60 million ad-supported users, um, going from 423 to fi- 483.

[00:07:56] Daniel Konstantinovic: Yeah, you know, I'd be curious to see how much time those [00:08:00] ad-supported users are spending on Spotify, 'cause that could be a reason that- Mm-hmm ... uh, the revenues are not growing so fast. Every platform has to juggle a, the difficulty of getting revenues from advertising and balancing the user experience with it, and I think an audio service is perhaps more vulnerable to a decrease in the quality of the user experience due to advertising, uh, than a video streaming service like Netflix perhaps.

[00:08:27] Daniel Konstantinovic: Mm-hmm. Uh, even though, you know, advertising obviously has a long history with audio formats, I think the, the way people engage with music streaming or expect to engage with it, having, you know, fluidity, listening through a playlist, like, without interruption or just kind of selecting songs on the fly, I think, uh, you know, a heavy ad load there- Feels more disruptive than it does elsewhere.

[00:08:52] Marcus Johnson: Hmm.

[00:08:52] Daniel Konstantinovic: Um- Interesting. And because the revenues are slow despite the growth in ad-free [00:09:00] listeners, I think that's why you're seeing Spotify push so much into other formats that could create new ad space for them. Mm-hmm. Mm-hmm. Um, audiobooks are one, although we haven't really seen them attempt to bring ads into that.

[00:09:12] Daniel Konstantinovic: I'm sure it's probably a complicated, uh, affair there. But, you know, recently they have this partnership with Peloton, um- Mm-hmm ... kind of moving in, like, a lifestyle app direction. That could create, you know, new ad opportunities for them. Um, video podcasts have been a very big push at the company, uh, in the last year to two years.

[00:09:32] Daniel Konstantinovic: That obviously has big advertising implications. Video inventory is much more, uh, you can charge much more for it. Mm-hmm. Um, and it's, you know, viewed as in higher demand. I think you're seeing an effort to move away from just, you know, a free user tier, uh, as the primary or only source of ad revenues.

[00:09:51] Marcus Johnson: Yeah. Marisa, um, who writes for the briefing, was, Marisa Jones, one of our, uh, analysts, was also noting, uh, two new ad formats. [00:10:00] Uh, this is in March. The company testing interactive carousel ads, a multi-card swipeable format, she said, uh, for Spotify Now Playing View. Um, and then also, uh, Spotify reinventing its sponsored playlist feature, giving brands 100% share of voice on Spotify's top playlists.

[00:10:19] Marcus Johnson: They did have some numbers about, uh, time spent, so this, which sur- kind of surprised me 'cause in another piece, Marisa was saying Sp- a Spotify spokesperson told EMARKETER the in-focus app time is up 18% year over year for ad-supported users, directly translating into better ad performance as audio ads see a 14% increase in click-through rates.

[00:10:39] Marcus Johnson: And then some more data. Spotify is saying audiences are 36% more likely to trust music and podcast ads than social media ads. 80% of advertisers agree that audio offers heightened trust in the digital media landscape. But we've seen this disconnect between time spent on audio and ad dollars on audio.

[00:10:55] Marcus Johnson: Mm-hmm. And it's always been this chasm, and it doesn't seem like it's, um, shrinking.

[00:10:59] Daniel Konstantinovic: Yeah. And [00:11:00] clearly they want to increase that. I mean, Daniel Ek has gone on the record saying that, you know, it's moving too slow. We really need to increase the ad revenues. There's been all these pushes like the ones you just named and efforts to make it easier to buy ads on Spotify through established, you know, methods, uh, like opening the doors to programmatic advertising on Spotify.

[00:11:21] Daniel Konstantinovic: Mm-hmm. Seems like they really just wanna tear down barriers to entry. Um, but yeah, it's, it's an interesting- Conundrum. You know, I'm not entirely sure why it's moving so slowly- Yeah ... or what roadblocks they're running into.

[00:11:34] Marcus Johnson: I wanna throw something out there because you mentioned it, um, already. It's one of the ones I had.

[00:11:38] Marcus Johnson: But are there other partnerships that can help bump up engagement? The one you mentioned, so Spotify recently announcing a deal with fitness company Peloton Interactive, offering over 1,400 Peloton ad-free on-demand classes for Spotify's premium subscribers, including strength, cardio, and yoga sessions.

[00:11:55] Marcus Johnson: Spotify also says free and premium users will have access to content from established wellness [00:12:00] creators. Um, I was trying to think of other partnerships that make sense. None, none came to mind, but, um, any thoughts on this partnership, Danny, and, um, how much it could help?

[00:12:08] Daniel Konstantinovic: Yeah, I, I could see a lot of potential partnerships.

[00:12:11] Daniel Konstantinovic: Um, I mean, the first, you know, kind that jumps to mind to me could be, like, a cooking service of some kind. Hmm. You know? Oh, that's very nice. Like, think of something- That's a great idea ... like how The New York Times has done- Mm-hmm ... very well with, uh, you know, a cooking app. Um, I think something like that could make sense on Spotify.

[00:12:26] Daniel Konstantinovic: And, uh, you know, this is the, to my knowledge, the first partnership of this kind that they've struck, and I'm sure it is a testing ground of sorts or something that they kind of want to show around on a platter like, "Hey, look, this could be you- Mm ... if you partner with us to do the same thing." I had a similar question, which was, uh, what does a Spotify lifestyle app look like?

[00:12:47] Daniel Konstantinovic: As- Oh, interesting ... I mean, this is something that is only available to Premium subscribers- Mm ... at the moment, and as they keep adding these things, audiobooks, video, podcast, I mean, those are more widely available, but things like this Peloton partnership or [00:13:00] other potential ones down the line, it could be a way to in- to, to widen the gap between an ad-free user and, uh, a regular free ad-supported user.

[00:13:11] Daniel Konstantinovic: Mm-hmm. Um, and you know, that could be an excuse to do price hikes and increase the cost or have maybe, like, a, you know, select your perks subscription offering. Oh, interesting. Just ways to- Yeah ... to, you know, a- add more flexibility for consumers to make them more likely to subscribe. Yeah. Or if you increase the price, you know, writ large, uh, offload more consumers onto the, uh, or onboard more consumers is maybe a better term, onto the ad-supported version of the platform.

[00:13:41] Marcus Johnson: Yeah, that's a, that's a really good idea, and they're gonna need to do something 'cause they've raised prices in the US I think three times in four years. Mm-hmm. And so they're gonna need to figure out a way to add value before they keep increasing the price there. It does beg the question of, like, who are they trying to be?

[00:13:57] Marcus Johnson: 'Cause I still think of them as the music streaming company. [00:14:00] But they obviously wanted to be the audio everything app, right? With the podcasts and with audiobooks and with music, and now with fitness, um, components. You mentioned, so this a really clever idea, um, recipes and, uh, cooking, um, being part of it as well potentially.

[00:14:17] Marcus Johnson: Um, a lifestyle app, is that what they're trying to be? So it, yeah, I, I do- I think identity crisis is probably a bit strong- Yeah ... but I do think they're kind of wrestling with who they are.

[00:14:28] Daniel Konstantinovic: There's always the pressure of, of being a public company and, and needing to find, uh, you know, new growth levers that will force Spotify and a lot of companies like it to, you know, throw things at the wall and see what sticks.

[00:14:41] Daniel Konstantinovic: I think Spotify was maybe feeling, uh, some type of way, to be super non-specific about it, about kinda being scooped by other, uh, rival platforms. I mean, to your point about them being the audio everything app, Spotify was seen as this, like, hub for podcasting, [00:15:00] and then YouTube comes around and becomes the most popular place- Mm-hmm

[00:15:04] Daniel Konstantinovic: to listen to podcasts, and video becomes a huge part- Oh, no doubt ... of podcasts. Mm-hmm. And I think Spotify then has a moment of, you know, "Whoa, you know, we were the, the top dog here. What happened? Suddenly someone else has come out from underneath us." That was our block. "We need to do exactly what they're doing."

[00:15:16] Daniel Konstantinovic: Yep. Uh, e- or, like, look for whatever the next thing is that we can pounce on.

[00:15:20] Marcus Johnson: And as they do this, they need to make sure that they're maintaining their core competence, that they are the place to, to, to stream music. And I thought this, this chart really surprised me. It's from Activate Consulting. It's basically looking at places where US music listeners discover new music and artists.

[00:15:36] Marcus Johnson: Music streaming services, Apple Music, Spotify, people like that, was third. So it didn't even seem like it's the place to discover new music and artists anymore. Mm-hmm. Actually, um, YouTube was number one, 65% of people discovering music and artists there. At number two, 53%, social media platforms, Instagram and TikTok, and then music streaming, 39%.

[00:15:57] Marcus Johnson: TV shows and movies was- Hmm ... almost as much [00:16:00] in terms of discovery. So if you're not going there as a primary place to discover new artists and music, then what are you going there for? Um, obviously to listen to music, but you wanna keep people engaged. And they, they need to do something with engagement as well.

[00:16:14] Marcus Johnson: Um, this is something else that came out of this, um, this question around partnerships and trying to bump up engagement was according to our forecast, time spent with Spotify has been hovering around the 50, 5-0, minute mark for the last decade almost according to our forecast. Um, and it's high. It's close to an hour, but it's not growing.

[00:16:33] Marcus Johnson: Um, it is sec- third, sorry, only compared to YouTube and Netflix when you look at all the different things people do, um, digitally. It's ahead of TikTok, Instagram time, Hulu, Reddit, Disney Plus, et cetera, et cetera. Um, it's third, but it's flat.

[00:16:47] Daniel Konstantinovic: I think your point about, um, discovery is a really interesting one.

[00:16:51] Daniel Konstantinovic: I think for sure Spotify's utility as a music discovery tool has diminished somewhat. I think in, uh, i- it's gotten lost [00:17:00] a little bit in the desire to chase engagement and increase time spent in the service.

[00:17:05] Marcus Johnson: Mm-hmm.

[00:17:05] Daniel Konstantinovic: A lot of, of services, social media platforms, video platforms will Re-suggest things to you that you have already seen, um, or that you are highly likely to engage with.

[00:17:15] Daniel Konstantinovic: It, it shows you more of what it knows works for you. Mm-hmm. And perhaps a music service is more vulnerable to the negative effects of that, because people do want to discover new artists and find new music. But if Spotify is just kind of resurfacing the same songs you're already listening to or- Yeah

[00:17:34] Daniel Konstantinovic: promoting specific songs or artists across its, you know, various playlists, a habit will form that users will not think of it as a place to discover

[00:17:43] Marcus Johnson: new things. Yeah. I don't. I think of it as your utility. Um, they just said 7 million podcasts now on Spotify. I can't remember the last time I discovered a new one.

[00:17:52] Marcus Johnson: Yeah. And I don't think it was through Spotify. I think it was, um, I think it was probably The Gray Area- Mm-hmm ... um, with Sean Illing, I think is his name, [00:18:00] and it was ... I was, um, reading an article and i- in the article, they mentioned the podcast. Anyway, what else do you have? What else are we throwing out there in terms of big questions for Spotify?

[00:18:08] Daniel Konstantinovic: My last one is a little bit of a pivot. Um- Yeah. Let's do it ... I'm wondering what Spotify can do about AI, AI slop, uh, a- and how it might impact the service. Nice. I think this is one that a lot of, uh, platforms are dealing with. Mm-hmm. But the frequency with which we see stories of, you know, of song going viral on Spotify and, oops, it is AI generated, and no one knew.

[00:18:31] Daniel Konstantinovic: It, it seems to be increasing, and I think that suggests that maybe their detection methods for these things are lacking somewhat. Um- Mm-hmm ... and that's another thing that could damage, like, the value perception of the service. Yeah. Yeah. At the same time that they're doing things like Peloton audiobooks trying to show, like, "Look at all this stuff you can do here at Spotify," things like AI kind of work against that and, uh, hamper those efforts.

[00:18:57] Marcus Johnson: Yeah. This was exactly the question I had, [00:19:00] uh, which was... My, my question was how Spotify solved the AI problem by adding verified badges to distinguish human artists from AI ones. To explain, Laura Cress of the BBC, uh, was saying that o- the audio streaming giant, uh, said, "Verified by Spotify," that phrase, that text, and a green check mark icon would appear next to an artist's name when they meet, what they call defined standards demonstrating authenticity.

[00:19:27] Marcus Johnson: Uh, she notes that this could include having linked social accounts on their artist profile, consistent listener activity, or other signals of a real artist behind the profile, uh, such as merchandise or concert dates. Problem with this, though, in the article, Ms. Cress was noting that, um, some folks are pointing out that a verified account only proves that the artist is human, not that the music was made without using AI.

[00:19:52] Daniel Konstantinovic: One issue is fake, if you will, artists who are releasing their own songs that get very popular. [00:20:00] Impersonation is another one- Mm-hmm ... uh, and something that's certainly happened before on Spotify with AI-generated music. But then what do you do if, you know- Bad Bunny decides, like, "I'm gonna release a song with- Yes

[00:20:12] Daniel Konstantinovic: uh, AI. AI was used to make this piece of music." Mm-hmm. What's the policy there? You know, I'm sure Spotify will be more lenient with these artists that are big revenue drivers or engagement drivers- Mm ... for them, but- Right ... you know, it opens up this whole gray area, and do artists have to disclose it? Uh, will Spotify require that?

[00:20:30] Daniel Konstantinovic: How will it be shown in the app? Will they just say no outright? I think, uh, the last one is pretty unlikely given that Spotify has pushed a lot of AI features onto consumers, like AI DJs, AI-generated playlists. Mm-hmm. I doubt that they would come out and be like, "AI is out of the question," like, "That's not allowed here in any capacity."

[00:20:49] Daniel Konstantinovic: Uh, but it is just a strange line to tiptoe, and I think it's such a, a strange tightrope walk. Like, consumers are using things like the AI DJs and, [00:21:00] you know, the AI-generated daylists, for example. Uh, those have been big successes for Spotify. But, you know, if you look broadly at consumer sentiment around AI in really like any sector that it is used in, it's really negative.

[00:21:14] Daniel Konstantinovic: Mm-hmm. So what do you do- Mm ... uh, about that? Like, how do you balance the, the consumer sentiment there?

[00:21:21] Marcus Johnson: Part of the problem here is will it even be accurate? And Ed Newton-Rex, a campaigner for creators' rights and former AI executive, was saying Spotify's approach could punish real human artists who don't have some of the markers the verification is based on, like touring or selling merch.

[00:21:34] Marcus Johnson: That's part of it. But going back to what you were saying before, yeah, labeling the music is gonna be much more difficult. Um, professor of music at the University of Durham, Nick Collins, said Spotify's, which is just a cool title, professor of music- ... um, said Spotify's decision was unsurprising given the ongoing public outcry around gen AI, but added it would be a trickier task if it ever tried to label the music itself.

[00:21:57] Marcus Johnson: AI usage is not binary, um, [00:22:00] between entirely authentically handmade and fully AI-generated. We can have lots of in-between cases. So yeah, big question is gonna be how much AI makes it AI. Is it 50%? Like, what's- ... the threshold? Yeah. Um, an article in the British newspaper The Guardian, which I was reading, um, said Deezer, which is a competing platform, uh, disclosed last, uh, disclosed recently that synthetic tracks, uh, now make up 44%, uh, so AI-made, up 44% of all new music uploaded to its service each day.

[00:22:33] Marcus Johnson: So it's a problem. It's becoming a problem real fast.

[00:22:36] Daniel Konstantinovic: Yeah. You know, on the one hand, it's benefited Spotify hugely to, uh, make it easier to upload music onto the platform, but then this is a really big drawback then. any platform with that kind of a model is going to face.

[00:22:49] Marcus Johnson: There was, um, another note about them, uh, going beyond the badge, adding a new, uh, information section to all artist pages.

[00:22:58] Marcus Johnson: So whether or not they hold verified status, [00:23:00] displaying career highlights, release patterns, live performance history. Company said, uh, it's gonna compare it to nutritional labeling for food, giving listeners a way to gauge an artist's track record on the platform. I don't know if people are gonna do that, uh, have time to, to verify or check the credentials or the history of, uh, h- an artist before listening to them, um, or after listening to them.

[00:23:22] Marcus Johnson: But that's something else they're doing. The one other note I thought was of interest was a Forbes contributor, Corey Martin, saying there was a decline in premium subscribers in North America. So not overall, but in the specific region, North America. The US and Canadian markets, long considered the most cons- commercially important in the streaming world, appear to be sa- are reaching saturation.

[00:23:40] Marcus Johnson: Total MAU growth, monthly active user growth, with 12% globally masks a more complicated picture at home, where price increases over the past two years have slowed subscriber adds even as they improved per user economics.

[00:23:53] Daniel Konstantinovic: Maybe not so surprising since, uh, this is kind of its biggest market and- Yes ... there, it has had [00:24:00] really, uh, a really long runway to build, uh, relationships with consumers.

[00:24:04] Daniel Konstantinovic: Mm-hmm. You know, from years, uh, you know, I remember when I was in college in 2014, there were these student, uh, deals. Even before that, when I was in high school, you could pay really cheap to get Spotify and y- you know, speaking for myself, that has definitely made me, so far, a lifelong user of the service.

[00:24:21] Daniel Konstantinovic: Mm-hmm. And I'm sure there are a lot of people like that. So not a lot of room for upward growth perhaps in its biggest market.

[00:24:27] Marcus Johnson: All right, Danny, let's pick three. Uh, I'll let you go first. I'll go second. You can have the final choice. What's number one?

[00:24:32] Daniel Konstantinovic: I think the ad revenue question. Does Spotify need to, uh, have a large ad business?

[00:24:39] Daniel Konstantinovic: Mm. Given that the subscriptions are the overwhelming majority of its revenue.

[00:24:43] Marcus Johnson: You go second, 'cause I might pick one of your, I might pick one of your ones. You, what do you have sec- You go, go pick the second one. What's your second favorite?

[00:24:50] Daniel Konstantinovic: Uh, my second favorite Probably the, uh, lifestyle service question Okay I'm really curious what direction this goes in

[00:24:57] Marcus Johnson: That's where I was leaning.

[00:24:58] Marcus Johnson: Um, I'm stealing that [00:25:00] one Stealing yours, sorry. No, no, no, no, I was stealing... You're stealing yours back from me. Uh That's true. Reclaiming It's sort of... They also introduced messaging as well am- amongst users, so- Yeah, that's right Are they trying to be, uh, you know, more like an Instagram that has a huge music and audio component and trying to be...

[00:25:18] Marcus Johnson: I mean, you said lifestyle, you know, also maybe more of a social app. Um, so we'll see how that goes. All right, I'll pick one of the AI ones. I will pick have they solved the problem with the verified badges, just 'cause it's more recent news. I think your question, if you zoom out, this one's very... The verified badges is, like, of this moment- Okay

[00:25:36] Marcus Johnson: but I think your question about what are they gonna do about AI music is, is an important one zooming out for the rest of the year and beyond. Um, but I'll pick, uh, the verified badges one. So top three, does Spotify even need to increase ad revenues? The second was what does a Spotify lifestyle service look like?

[00:25:52] Marcus Johnson: And then third, has Spotify solved the AI problem by adding verified badges to distinguish human artists from AI [00:26:00] ones? Um, that's our top three for your big questions for Spotify at the moment. Thank you so much, Danny, for hanging out with me today and putting together this list.

[00:26:06] Daniel Konstantinovic: Yeah, of course. That was fun.

[00:26:07] Marcus Johnson: Yes, sir. Uh, thank you of course to the production crew. We've got Lance and Mike helping out with this one. And thanks of course to everyone for listening in to Behind the Numbers, an EMARKETER podcast. Um, watch upcoming episodes of our video podcast on YouTube and Spotify, or of course listen on Apple Podcasts.

[00:26:20] Marcus Johnson: Uh, I will be back on Friday, but Suzy will be here with the Reimagining Retail show this Wednesday talking to, uh, Christopher Carl, the US CMO of aliExpress.