Spotify CEO Daniel Ek is scheduled to retire at the end of this year. The music streaming giant’s next chapter 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).
This effort will be increasingly supported by an AI strategy, including OpenAI’s recent integration with 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 Söderström.
Spotify added 17 million monthly users from July to September, reaching a total of 713 million users by the end of the third quarter. Quarterly sales rose 7% year over year to $4.8 billion, and net income jumped to $1 billion from $344 million a year earlier.
Incoming co-CEO Norstrom said users are spending more time on Spotify than ever before, trying out the company’s non-music content. “More than 39 million users currently stream video podcasts on Spotify, which is a 54% increase year-over-year,” Norstrom told analysts today. He also noted that Spotify’s audiobook catalog has more than tripled to more than 500,000 titles in English-speaking markets.
Further enhancing its new content format, Spotify last month announced a deal with Netflix that will bring 16 of its podcasts to the streaming giant’s platform in 2026. The company tried to allay concerns that the partnership would drive users away by pointing to the increased engagement it typically sees when podcasts are posted on YouTube.
One of the weak spots in an otherwise strong financial report was Spotify’s advertising business. Advertising revenue for the quarter was down 6% year over year. The next co-CEOs will face this challenge head-on as they work to innovate the space through new partnerships with ad tech companies like Yahoo and Amazon. “These changes will take time, but we believe we will see significant results in the coming years,” Norström said.
This was a particularly busy quarter, with Spotify rolling out 30 product updates during the period. This was more than we released in all of 2024. “And the year is not over yet,” Söderstrom told analysts.
New features include playlist mixing tools, taste profile controls, and in-app messaging (which has already attracted around 25 million users). The streamer also announced a collaboration with ChatGPT, which will allow users to connect their Spotify accounts to create custom playlists and request content. Possible prompts might include asking for a “zen-like playlist for when your in-laws come over for the holidays,” Söderstrom suggested.
Spotify has been experimenting with AI through tools like Spotify DJ, which takes user requests and provides customized suggestions. But the company plans to embed AI even deeper into its ecosystem to make its recommendation system more personalized and give creators like musicians, podcasters and authors new tools to engage their audiences.
AI-powered consumer experiences have yet to gain “significant traction,” Söderstrom said. “But we think that will be the case over the next few years, and we think there is an opportunity to reap the net benefits of that.”
