By 2022, Spotify had 273 million ad-supported users. The Spotify Audience Network was born as the result of the acquisitions of Anchor and Megaphone. Spotify Audience Network is the underlying advertising infrastructure that supports its ad-supported user base. In addition, the ad-supported stream is getting more and more interesting as Spotify is ramping up its advertising network efforts. The ad-supported revenue stream, while it has lower gross profit margins, it works as a sales funnel for the company to attract and retain premium members. In fact, over time, free users likely convert into premium members, and they are retained for a long time. The interesting part is that the ad-supported side of the platform is self-sustaining, and it works as an excellent funnel for Spotify to attract as many premium members as possible. Of these, 295 million premium members and 205 million ad-supported members. Indeed, by 2022 Spotify had a total of 489 million users. Spotify follows a freemium business model, where it leverages a powerful free app with hundreds of millions of users. By 2022, Spotify had 489 million users, of which 205 million premium members and 295 million ad-supported users. Of these revenues, 87.4% or €10.25 billion came from premium memberships, while over 12.6% or €1.47 billion came from ad-supported members. Founded in 2008 with the belief that music should be universally accessible, it generated €11.7 billion in 2022. Spotify has a free ad-supported service and a paid membership. Spotify is a two-sided marketplace where artists and music fans engage. Indeed, in 2023 with 16.5% of Spotify’s shares, he’s worth around $3.7 billion.ĭaniel Ek’s net worth is highly tied to the market valuation of Spotify. Home Pageĭaniel Ek is one of the founders and one of the principal shareholders of Spotify.Digital Business Models Podcast by FourWeekMBA.
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