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Daniel Ek: Spotify key to identifying “real fans”

The leading streaming platform is uniquely placed to enable artists to upsell their products to super-fans, Ek told Spotify investors

By Jon Chapple on 06 Nov 2018

Daniel Ek addresses delegates to Spotify's March 2018 investor day

Daniel Ek addresses delegates to Spotify's March 2018 investor day


Daniel Ek, the CEO of music streaming service Spotify, has said the platform will in future be used increasingly to upsell artists’ products, which could include tickets and merchandise, to “superfans” – with Spotify key to identifying who they are.

Speaking during Thursday’s Q3 earnings call, Ek outlined his vision for Spotify – which in the first half of 2018 had 83m subscribers, for a 36% stake of global streaming marketshare – as a leading “marketplace” for artists to connect with their most devoted followers.

UBS analyst Eric Sheridan asked: “How should we think about the ecommerce opportunity – ticketing, merchandising, et cetera – on the platform in the coming years? What are some of the friction points with product partners, et cetera, that Spotify needs to solve to achieve their goals?”

“I think if we uplevel this [sic] and not talk about the specifics of merchandising and ticketing, and instead talk about the fact that at Spotify, our goal is to connect artists and fans,” Ek replied, “and as part of that, for many artists, they have a huge audience on Spotify, and we have a better ability – we believe – over time to discern who are real fans versus not.

“As part of that, you could expect us to enable opportunities as part of our marketplace strategy to create more opportunities for creators to upsell those superfans various products.”

“Many artists have a huge audience on Spotify, and we have a better ability – we believe – over time to discern who are real fans”

Ek also touched on the future of the company’s Spotify for Artists platform, revealing it plans to monetise the service: a “freemium” model, with a limited suite of free tools for artists and their reps, will sit under a paid-for premium service.

Responding to a question from analyst Dick Delfas, Ek said: “Our strategy in our marketplace side of the business is the same as we have on the rest of Spotify, which is it’s a freemium business – meaning there will be a certain amount of products which artists and labels can get for free, and there are others which we will charge money for. So, that’s an evolving strategy when it comes to our product portfolio.”

He was clear, however, that “data, specifically, is very unlikely to be one of those things that we’ll charge for”.

Spotify turned its first net profit in Q3 2018 – though, as MBW notes, that €43m profit made up just 3.2% of its €1.35bn turnover, and can largely be attributed to a €125m tax benefit from its investment in Tencent Music.

 


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