Tag: David Kaefer

On Our $10 Billion Milestone and a Decade of Getting the World to Value Music

January 28, 2025

In 2014, the music industry reached a low point when global recorded music revenues hit $13 billion. Spotify’s annual contribution at the time was around $1 billion, with around 15 million paying subscribers. 

In 2024, Spotify alone paid out a record $10 billion to the music industry—totaling nearly $60 billion since our founding. 

For a lot of people, those numbers might go in one ear and out the other. And they’d perhaps ask why Spotify keeps shouting about it.

It’s because the system we’ve built together is working, and where we are now is only the beginning. Today, there are more than 500 million paying listeners across all music streaming services. A world with 1 billion paying listeners is a realistic goal we should collectively set.

Growing the Pie

There’s a vibrant marketplace of streaming services for different types of consumers, each doing its part to normalize the behavior of paying for music streaming. It’s been a collective effort. But there are a few things specific to Spotify that make it not only the most popular subscription streaming service but also the highest paying. 

  1. Retention is priority number one, and retention is driven by personalization, curation, and product innovation. Fans like the recommendations, the expert editorial curation, and surprise-and-delight moments like AI DJ, daylist, and Wrapped, as well as the access to non-music content. They keep coming back, discovering more new artists, and retaining their subscriptions.
  2. We offer an ad-supported free tier, while some services don’t. Beyond the ad dollars this generates, more than 60% of Premium subscribers were once free tier users. Bringing in users who don’t expect to pay for music, and deepening their engagement, means they’re more inclined to become subscribers in the future.
  3. We’re available in more markets and at local price points, meeting people where they are. A decade ago, there was a widely held view that you couldn’t monetize certain markets. But the journey of getting the world to pay for music means making long-term investments. Today, we’re seeing tremendous growth across markets like India, Brazil, Mexico, and Nigeria. These are places where our investments are paying off.

That’s our blueprint and it’s working. 

Growing Careers Beyond the Superstars

I recently read a data point from economist Will Page that said more music is released in a single day than there was in the entirety of 1989. In the pre-streaming era, you were either in the club or not. If you didn’t have a label deal or the means to distribute your music worldwide, you weren’t one of the few thousand artists on shelves at a record store or one of the 40 in rotation on a radio station. 

Now, you can record something today and have it on Spotify tomorrow. Everyone’s invited. Even better, payments to the music industry have shifted from a concentrated few at the top to an increasingly diverse and growing ecosystem of artists finding success. 

Case in point, we estimate that, in 2014, around 10,000 artists generated at least $10,000 per year on Spotify. Today, well over 10,000 artists generate over $100,000 per year from Spotify alone. That’s a beautiful thing.

Think about this: Last year’s IFPI report indicated that Spotify contributes roughly a third of global recorded streaming revenue. But a recent comprehensive study of independent labels and distributors from MIDiA Research showed that Spotify represents more than half of indies’ streaming revenue. What this indicates is that Spotify’s model is uniquely enabling more room for more artists to find success and ultimately sustain a career in music, demonstrating real change across the music business.

Where Do We Go From Here?

Without a doubt, this has been a decade of unparalleled transformation. The global value of music copyright today sits at $45.5 billion. A decade on from its low point, how many other industries have experienced this kind of revival? 

Our goal is to help artists get their work in front of existing and future fans, continue to innovate on their behalf, and deliver it in a way that inspires people to pay for it. Onboarding people to paid streaming is precisely what has increased our payouts—tenfold—over the past decade. 

Reaching 1 billion paid subscribers across all streaming services will be a collaborative effort, requiring innovation, strategic partnerships, and a continued focus on delivering exceptional value to music fans worldwide. It’s a goal we’re confident we can achieve together.

– David Kaefer,

VP, Music Business, Spotify

Spotify Launches Audiobooks in France, Belgium, the Netherlands, and Luxembourg—and Premium Listeners Get Instant Access

October 14, 2024

Since its launch just over a year ago, Spotify’s Audiobooks in Premium offering has helped introduce the format to an entirely new audience across the U.S., Canada, U.K., Ireland, Australia, and New Zealand. We’re seeing more listeners try audiobooks for the first time and embrace new and different books, with hundreds of thousands of unique titles streamed.

Today, we’re thrilled to announce that listeners in France, Belgium, the Netherlands, and Luxembourg will now have access to audiobooks, which includes exciting work from local authors such as Gaël Faye, Maylis de Kerangal, Joël Dicker, Suzanne Vermeer, and Saskia Noort, to name a few.

Eligible Spotify Premium subscribers in those countries will be able to access more than 200,000 audiobook titles as part of their subscriptions. Any title not included in our Audiobooks in Premium offering can be purchased à la carte. Listeners in these regions without a Premium subscription can also purchase any title on Spotify.

 

 

In partnership with publishers from across these markets, Spotify, the world’s most popular audio streaming subscription service, has the potential to grow the size of the audiobook industry overall. We are enabling more listeners than ever to discover and engage with a rich catalog of titles, including in their own language, and paving the way for future innovation of the audiobook format.

“Spotify’s reach presents a significant opportunity to expand the audiobooks market across France, the Netherlands, Belgium, and Luxembourg,” said Antoine Monin, Managing Director, Spotify Western Europe. “Since our launch in Western Europe 16 years ago, Spotify has evolved into a leading platform for music, podcasts, and now audiobooks. We are proud to spotlight this region’s rich literary tradition, with 15,000 French and 15,000 Dutch and Flemish titles joining our catalog, advancing our mission to empower audio creators globally and connect them with audiences both locally and internationally.”

One year of Audiobooks in Premium

While it’s still early days, the reaction to Audiobooks in Premium from authors, publishers, and listeners in available markets has been remarkable. On Spotify, we’ve seen user engagement increase among listeners who started an audiobook for the first time. In the U.S., these users spend an average of five additional hours on Spotify over their first two months after starting a book.

This launch opens up new opportunities for local authors and rights holders and helps create an additional revenue stream for the industry. With 28% of Spotify’s users located in Europe, we’ll continue investing in and growing the available audience and revenue pies for publishers and authors.

Spotify announced this latest expansion today in Paris with a panel featuring voices from across the industry: Laure Saget, CEO of Hachette’s Audiolib and Audiobook Commission President at the French Publishers Association, Liza Faja, Head of Lizzie, the audiobook imprint of Editis, Éric Marbeau, Head of Digital Distribution at Madrigall, parent company of Éditions Gallimard and Editions Flammarion, and Timothée Borne, CEO of the immersive audio content production company Blynd Media.

Spotify’s Audiobook Leaders Explain Why You Should Listen to Books on Spotify

October 3, 2023

For many years, audiobooks have had limited distribution avenues, leading many book lovers to overlook the medium. But our rollout in the U.K., Australia, and soon the U.S. means that tens of millions of Spotify Premium listeners will soon be able to access 15 hours’ worth of audiobooks from over 150,000 options each month, dramatically expanding the audiobooks market. 

In anticipation of this expansion, both David Kaefer, Spotify’s VP of Business Affairs and the Audiobooks Business, and Owen Smith, Spotify’s Head of Audiobooks Product and Tech, have been working diligently with their teams, as well as publishing houses, authors, and narrators, to bring audiobooks to our platform in a seamless way. 

Below they explain to For the Record how the combination of Spotify’s extensive catalog, world-class content discovery capabilities, and Premium offering will result in a magical experience for audiobook lovers and newbies alike. 

Today is a big day for our audiobooks business, but it’s also a big day for our users. What can they look forward to? 

Owen: At launch in the U.K. and Australia, and soon in the United States, listeners will have over 150,000 titles available to them. And they can listen however they would like. So they might focus on one title and finish it, or have ten books open and make their way through all of them slowly. That flexibility is a real benefit of our product. And they’ll have 15 hours a month in which to listen to that mix of content. If they love it and want to listen to more, they can head to our website, where they can buy top-ups so they can get more hours and continue listening. 

David: We really have a top-rate catalog. If you take a look at the top publishers in the book industry, they’re all working with us here at Spotify in some fashion. We don’t have every audiobook—because some audiobooks are exclusive and there’s a couple of pieces of catalog we’ve not licensed—but you’re going to find that most of the top authors, most of the top titles that are available as audiobooks are there, unlocked, in Spotify Premium for you to enjoy. I’m especially excited that we currently have over 70% of books from the New York Times bestseller list. 

I think a lot of people have not seen the mix of flexibility that the hourly listening model gives you with the catalog quality that we’ve been able to assemble. Then you add our investments in discoverability and that’s sort of the trifecta, that’s really a magical combination. 

What excites you most about listeners’ accessing audiobooks in the same place where they already have so much audio content? 

David: This is uniquely Spotify, this opportunity to bring multiple forms of amazing content together and make it seamlessly easy to discover and enjoy them. Compare that to a standalone audiobook app, for example. That experience today still feels a lot like it did 10-plus years ago. I’d buy a book and I must just listen to that book and perhaps be stuck with it. That’s a very different customer proposition.

We want our customers to have flexibility in what they listen to. If I want to dive in and out of music or pods or audiobooks, that’s all possible. 

Owen: These formats can also really borrow from one another. The book industry is particularly excited about using an author’s appearance in a podcast to help promote how people discover and ultimately listen to an audiobook and vice versa. So the opportunities to reinforce and discover across our different formats are definitely going to be there. 

What have we learned from launching other verticals—podcasts, for example—that’s informed this launch? 

Owen: First, you have to have amazing content that people want to listen to. Second, you have to help people find that content. In some cases, book titles will drive discovery themselves. There’s often a cultural book of the moment and people want to go find it. But we also really want to expand what audiences listen to, and to do that we’ve had to invest in recommendations for discovery. So just as we did in our podcasts journey, we’ll do that for audiobooks. 

We’ve got a great initial product that will include audiobooks across all our core surfaces. Our personalized Home feed is certainly one of those and will serve up recommendations based on what you like, as well as some suggestions for your next favorite book; while if you already know what you want, then you can just type it into Search. Then with Browse you’ll find some of our editorial booklists, where we will help you explore the huge catalog available. For example, we will take a genre like mysteries and serve up a curated selection so you can find just the right mystery book for you. 

David: We also have a lot of experience and learnings from our work with labels, music publishers, and podcast studios. The most important thing to remember is that these relationships are partnerships. It’s not about the first time you do a deal, but about building a lasting relationship. For book publishers, podcasters, and people in the music world, it’s important that we can grow the market. That’s our mission for the book industry. So they’re going to be assessing whether our offering is adding listeners and adding revenue that benefits the authors they represent. 

At the same time, we’re looking for the types of product flexibility that we need to be able to really delight users. We want to be able to use exciting new technologies to help people find that perfect book. We might want to evolve the format in a way where it looks fresh and gets people excited to engage.  

Why should someone who’s never listened to an audiobook before start now on Spotify?

David: I think a lot of people were originally surprised by how much they were into podcasts. They were on our platform listening to music, and they decided to give podcasts a try. The rest is history.

For booklovers who’ve never listened to an audiobook, they’ll be thrilled to see that audiobooks are awesome for multitasking moments. When I want to read a physical book or I want to read an e-book, I’m often curled up on the couch during focused time. But if I’m working out or I’m on the drive in to work or I’m dropping off the kids, those are awesome moments to think about “how do I build in an audiobook?” I think families with kids will also be delighted by the types of titles that you can listen to and enjoy together, and I think we’re going to see a lot of families super excited and engaged with this content, and they’re going to get a lot of value from it. 

What do you remember about the first time you listened to an audiobook? 

David: My first memory is of a book series I was a fan of. I had read 10 books and then listened to an audiobook, and it was jarring that the narrator’s voice didn’t match the voice in my head. So one lesson I’ve taken for myself is that the narrator is supremely important. We need to surface amazing narrators so they can be part of our journey.

In the audiobooks world, we need to be thinking of the author and the narrator as almost equal partners. Because as important as it is to write the book, that narration really determines whether somebody is going to stick with a title for often eight or 10 hours. It’s really predictive. So if I’m reading fiction and somebody really just allows me to get lost in the title, we know that that leads to completed listening of the book, and it benefits the author.

Oh, and I also figured out I’m a larger fan of nonfiction than fiction for now! 

Owen: I grew up in the U.K., so my first memory would probably be listening to audiobooks on BBC Radio, where they used to broadcast excerpts and—on rare occasions—broadcast the whole audiobook end to end. I see audiobooks as a wonderful way to replay one of our oldest human traits, which is to tell and pass on stories, whether that’s in a novel, memoir, or even some of the nonfiction books that I listen to for work. One of the great things about the product we’ve built is that I’m now finding new ones that I enjoy more frequently than ever before. 

What audiobooks are you listening to right now? 

David: I’m just starting Grit: The Power of Passion and Perseverance, written and narrated by Angela Duckworth, which is very appropriate for this particular role of launching any new business vertical. For more fun I’m trying out the Millie Bobby Brown novel, Nineteen Steps. 

Owen: I recently finished Stanley Tucci’s Taste, which is a memoir interspersed with stories about food and recipes. I loved the book and he’s a naturally fantastic narrator. I’ve just started Tomorrow, and Tomorrow, and Tomorrow by Gabrielle Zevin, which was a recommendation based on my podcast listening on Spotify.