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Spotify CEO: Some 2022 Investments Were A Mistake

Industry professionals, investors, and listeners alike are wondering the same thing: Were Spotify’s substantial investments in 2022 a mistake? 

Maddy Troy

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Spotify reported its Q4 2022 earnings this morning revealing some financial growth points in the wake of the recent layoffs that cut 6 percent of Spotify’s staff. Most notably, the revenues from subscriptions and ads were both up double digits year over year. 

Where is the disconnect happening and why?

Industry professionals, investors, and listeners alike are wondering the same thing: Were Spotify’s substantial investments in 2022 a mistake? 

On this morning’s call, Spotify CEO Daniel Ek answered, “No… and yes.”

Ek explained that the year 2022 was a mixed bag for Spotify. User growth is way up, new app features made Spotify stand out against competitors, and long-term investments are already having a short-term impact. 

On the flip side, he just laid off six percent of his staff. Ek noted he may have over-invested in some areas relative to market uncertainty in 2022. 

Spotify reached 200 million paid subscribers, making it the first music streaming service to reach that number. In the coming quarter, they plan to reach the goal of 500 million monthly users. Jacob Kastrenakes of The Verge reported on the call this morning;

“Ek reiterated again and again that the company would be reorienting around “speed and efficiency.” The reorg? Speed and efficiency. The goal for 2023? Speed and efficiency. The biggest thing holding Spotify back? Speed and efficiency. (I counted 12 “efficiency” drops between Ek and CFO Paul Vogel just in my notes from the call.)” 

In the wake of this, the CEO said he requires more help at the top of the company. Ek is reframing the top structure at Spotify to work more closely with Alex Norstrom, Spotify’s chief business officer, and Gustav Söderström, Spotify’s chief product officer, Ek said, “materially [this will ] mean we’ll have more brains thinking about these things … to make decisions faster because that’s honestly one of the biggest blockers.”

There are many variables at play for Spotify. Some elements of their business model are working incredibly well, and some need restructuring and attention from more “brains”, as Ek says. The progression of Spotify will stay on our radar in 2023.

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Media Business

Median Age of Podcast Users Nearly 30 Years Younger Than Cable TV

“The ascent of podcasting signals a shift towards on-demand content consumption that aligns with the lifestyles and preferences of younger generations.”

Barrett News Media

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It is no secret that cable TV has seen the age of its viewers continue to rise. But the entire picture is coming into view when juxtaposed against other mediums like radio and podcast users.

A new report from Amplifi Media shows that the median age of cable news viewers is 70. MSNBC is 70, Fox News is 69, and CNN is 67. That median age means that more than half the viewers are actually older than 70 years old.

Network television isn’t a much brighter picture. In primetime, the median age is 64. FOX has the youngest number at 49.5.

However, the median age of podcast consumers comes in at 34.

Steve Goldstein, Founder and CEO of Amplifi Media, believes the drastically younger demographics of the medium make it an ideal platform for advertisers.

“The ascent of podcasting signals a shift towards on-demand content consumption that aligns with the lifestyles and preferences of younger generations,” wrote Goldstein. “We live in an on-demand world, and while other media are adjusting (think streaming apps and YouTube), podcasting has three not-so-secret ingredients that traditional media struggle to match: intimacy, flexibility, and loyalty, which makes podcasting an ideal platform for engaging storytelling, niche topics, and fresh takes.”

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Media Business

Majority of Media Advertising Projected to Be AI-Aided By End of Decade

Forecasts show that 69.5% of all advertising revenue will be AI-aided, while that number is expected to grow to over 90% by 2029.

Barrett News Media

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The rise of artificial intelligence in media has been a focus for several years. But the use of AI in advertising is just getting started, and a new study suggests it will influence the space in the years to come.

GroupM has released its This Year Next Year forecast. In its projections, it believes that AI will be a prominent tool in advertising optimization. By the end of 2024, it forecasts that 69.5% of all advertising revenue will be AI-aided, while that number is expected to grow to over 90% by 2029.

The company also projects that AI-generated content in advertisements will account for 1.6% of all commercials in 2024. GroupM believes that figure is likely to grow to 10.7% by the end of the decade.

While the organization forecasts an increase of $365.9 billion, up 5.8% compared to previous projections, it shows a 1.5% drop in revenue for terrestrial radio, according to RadioInk.

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Media Business

Broadcasters Foundation of America Set for Annual Giving Day Thursday

More than 1,000 broadcasters have been aided by the organization.

Barrett News Media

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The Broadcasters Foundation of America is set to hold its annual Giving Day on Thursday, June 13th.

For more than 70 years, the organization has supported broadcast radio and television professionals during challenging financial times. More than $20 million in grants have been funded by the foundation since its inception.

More than 1,000 broadcasters have been aided by the organization.

To donate to the fund, click here.

In addition to its Giving Day, the organization will hold a mixer at the iHeartMedia studios in New York from 5:30-7:30 PM on Thursday.

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