Speaking at their annual Open House event in Stockholm last week, Spotify gave journalists the opportunity to ask questions up close and personal, with the company’s growth plans, its stance on AI and concerns about their high-profile Wrapped promotion being front and centre.
In brief, many Spotify users took to social media to share their Wrapped results this year – as they do every year and as Spotify loves them to do – however this year it wasn’t so much to boast about the extreme brilliance of their diverse musical taste but rather to wonder what the hell had happened.
Many users complained that the last Wrapped – the annual recap of your listening habits that Spotify calculates for every user and which points them back at what they’ve been listening to reveal their favourite, artist, song etc, often with surprising results – was more surprising than usual in 2024.
I.e. The last Wrapped – released 4 December 2024 was – for many users, full of inaccurate data and tracks and artists that users hadn’t been listening to or expressed any kind of preference towards.
Diabolical data?
Was there some foul play afoot? Were Spotify intentionally feeding you leads to tracks that they (for whatever reason) would rather that you listened to rather than what you actually did listen to? And what data/knowledge was it basing its suggestions on? Had they helped themselves to data that users had unwittingly let slip elsewhere?
After all, Spotify is famously a platform built on algorithms. Why listen to the same old music when there’s so much new stuff out there? Allow it to serve you the songs it thinks you might like, based on your previous listening data or… whatever else it can get its hands on… and it’s all good. Go with the flow and enjoy.
However, approach it with a specific intent to listen to a particular artist, or – heaven forbid – the complete works of an artist, in album order by date of release, and the number of hoops you have to jump through to prevent the algorithm butting in and ‘helpfully’ feeding you what it thinks you want instead can – even in 2025 – be maddening.
In short, is Wrapped a nostalgic recap of what you listened to so you can do it all again (as users seem to think) or an annual usage-increasing ploy designed to surface new music ‘that you’re going to love’? And with continued growth and the acquisition of new users being the metric by which Spotify’s new-found profitability is now measured, that’s not a hard conclusion to come up with.
So what went wrong?
It’s thought that Spotify’s stream counting – tallying how many times tracks were streamed rather than the listening time spent enjoying an artist – may be to blame, with the work of artists who favour short tracks (think Charli XCX and Pink Pantheress) being increasingly (and unevenly) surfaced as a result.
Did Spotify simply nudge their Wrapped-calculating algorithm in ever so slightly the wrong direction in 2024?
The arrival of more high-profile releases in Wrapped playlists teamed with increasing worries around data security and privacy concerns collectively heightened users’ questions and suspicions. And – it’s claimed – the garish, ever more social-friendly graphics and imagery used, this year has proved something of a turn-off.
If the aim was to encourage Spotify users to share the fact that they use (and love) Spotify to their friends then this particular tactic would appear to have backfired.
But Spotify are keen to point out that they’re already all over the ‘problem’.
“If you look at the numbers it was the biggest Wrapped we’ve ever had,” explained CPO and co-president Gustav Söderström. “But there was more negative feedback than we’ve seen before,” he admitted. “So, we just need to do better – there’s a lot of pressure for this year’s Wrapped to be a much better version.”
“I think people just wanted something newer, something that wasn’t there the year before. There was also some feedback that some of the things people loved from years before were not there,” he continued.
“We didn’t just want to tack on everything that we ever did – maybe we should have.” But with Wrapped 2025 already in progress, Söderström stressed that Spotify is “working hard on making it the best that it’s ever been.”
A new Pro tier?
Also on the table for discussion were hot topics such as a rumoured new, higher priced paid for ‘Music Pro’ tier for ‘superfans’.
“If you’re an artist and you have a big fanbase, you actually do want to talk to them too. But how do you scale it? And how do you make that so that it’s not then an exclusionary thing?” asked CEO Daniel Ek.
Citing the service’s Fans First features – where artists can send their fans invites to buy tickets or merch – Ek pondered: “What more things can we do like Fans First that scales, and that provides a great experience for the artist, and provides a great experience for the consumer? That’s how we think,” he said.
“But I do agree that the need – the creator need or the artist need – exists. And the consumer need is there too. The question is just how do you create a great experience?” he asked while asserting that they’re “incredibly right” that this is what superfans want.
AI music: Welcome or not?
And what exactly is Spotify’s stance on AI-generated music? Rival service Deezer is actively on the rampage to delete and ban AI-made tracks from polluting their streams. Meanwhile, Spotify is seemingly less militant…
“This is the early days of creativity (with AI’s help). We want more humans to make it as artists and creators, but what is creativity in the future with AI? I don’t know. What is music anyway?” asked Ek.
“You can now generate full-on videos entirely… Does that mean you’re a lesser artist than someone who hand-drew all of these things yourself?” asked Ek, while head of artist and industry partnerships, Bryan Johnson suggested that there is “infinitely small consumption of fully AI-generated tracks on Spotify”, and that “there is no dilution of the royalty pool by AI music.” Yet…
Perhaps wary of shareholders’ thoughts, their need for profit and an unwillingness to turn their back on tech’s hottest growth zone, the company line appears to be – at present – let AI live.
“We’re excited about GenAI because it gives us English language input for the first time… It’s now not just clicks on streams,” said CPO and co-president Gustav Söderström, predicting the rise of prompts and requests, powered by AI, becoming the main way in which users will listen.
Price hikes?
So, will the newly profitable Spotify be putting its prices up soon? Spotify’s chief financial officer Christian Luiga explained the pros and cons of cashing in at this stage. “The day we start to compromise on the value-to-price ratio… then we are going in a totally different direction.,” he suggested. “We don’t even want to think about that day, because that’s not part of our DNA,” he said.
“Increasing prices, then losing 10% of subscribers is not worth it for us, because that’s not our strategy. We don’t even discuss those things in our management team.”
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