Spotify’s CEO and Co-Founder Daniel Ek” width=”970″ height=”656″ data-caption=’With CEO Daniel Ek transitioning to executive chairman, Spotify bets big on A.I. and a broader mix of formats. <span class=”lazyload media-credit”>David M. Benett/Dave Benett/Getty Images for Spotify</span>’>
Spotify CEO Daniel Ek is set to step down at the end of this year. The next chapter of the music streaming giant will revolve around a “multi-format strategy” that expands the platform to include more video podcasts and audiobooks, Ek told analysts on the company’s third-quarter earnings call today (Nov. 4).
That effort will also increasingly be underpinned by an A.I. strategy that includes a recent integration with OpenAI’s ChatGPT. “We’re building Spotify for the long-term,” said Ek, who will transition to executive chairman next year. The CEO duties will be split between Alex Norström and Gustav Söderstrom.
Spotify added 17 million monthly users between July and September, reaching a total of 713 million users by the end of the third quarter. Quarterly revenue climbed 7 percent year-over-year to $4.8 billion, while net income surged to $1 billion from $344 million a year ago.
Users are spending more time on Spotify than ever before as they experiment with the company’s non-music content, said incoming co-CEO Norström. “More than 39 million users have streamed a video podcast on Spotify now—that’s a 54 percent increase year-over-year,” Norström told analysts today. He also noted that Spotify’s audiobook catalog has more than tripled to over 500,000 titles in English-speaking markets.
To double down on its new content formats, Spotify last month announced a deal with Netflix to bring 16 of its podcasts to the streaming giant’s platform in 2026. The company sought to ease concerns that the partnership might drive users away by pointing to the engagement boost it typically sees when its podcasts are posted to YouTube.
One weak spot in an otherwise strong earnings report was Spotify’s advertising business. Ad-supported revenue fell 6 percent year-over-year for the quarter—a challenge the incoming co-CEOs will face head-on as they work to revamp the segment through new partnerships with ad-tech players like Yahoo and Amazon. “While these changes will take some time, we believe they’ll yield significant results in the years ahead,” said Norström.
It was a particularly busy quarter, during which Spotify rolled out 30 product updates—more than it launched throughout all of 2024. “And we’re not even done with the year yet,” Söderstrom told analysts.
New features include playlist-mixing tools, taste profile controls and in-app messaging (which has already attracted some 25 million users). The streamer also unveiled a collaboration with ChatGPT that lets users create custom playlists or make content requests by connecting their Spotify accounts. Potential prompts might include asking for “a playlist with a Zen-like vibe for when your in-laws come to visit for the holidays,” Söderstrom suggested.
Spotify has previously experimented with A.I. through tools like Spotify DJ, which takes user requests and provides tailored suggestions. But the company plans to weave A.I. even deeper into its ecosystem, making its recommendation systems more personalized and giving creators such as musicians, podcasters, and authors new tools to engage audiences.
A.I.-powered consumer experiences haven’t yet achieved “massive traction,” said Söderstrom. “But we think that there will be over the coming years, and we think we have the opportunity of being a net beneficiary of that.”
