Spotify CFO Paul Vogel said the streaming service aims to go far beyond its musical origin to become the world’s best audio app, enriching its offerings with features like podcasts, audiobooks and live music.
“We want to be the world’s # 1 streaming audio player, and that means having everything you can think of in audio,” Vogel said Thursday at the MIT Sloan CFO Summit, noting that Spotify has $ 3.5 billion in cash on its balance sheet available for expansion.
“In the next five to ten years, there will be 3 [billion] to 4 billion phones compatible with smartphones – why wouldn’t each of these phones have an audio streaming app? Vogel said. “And if they want to have an audio streaming app, let’s make ours the best.”
In the third quarter, Spotify increased its monthly user base by 19% from the previous year to 381 million, the company reported last month. Its “premium” paid subscription also increased by 19% compared to the third quarter of 2020 to 172 million. Advertising revenue during the period jumped 75%, driven in part by growing podcast business.
“We believe that over time the advertising industry will continue to grow,” said Vogel, noting that the advertisement appears on Spotify’s free listening service. “I see no reason why the advertising industry couldn’t be as good and as healthy as a high-end industry in the long run. ”
In its most recent expansion, Spotify this month announced the acquisition of Findaway, an audiobook company.
The company’s acquisition strategy “leads to user growth, better engagement, more time, higher lifetime value,” said Vogel. “We can invest a lot in things – we want to take risks. “
Spotify plans to go further in disrupting the media, Vogel said, warning against underestimating its impact.
“What you’ve seen over time, especially in the media space, is that I think people are trying to use old paradigms to understand where the business and the markets are going,” a- he said, noting the upheaval in entertainment streaming caused by Netflix.
“The opportunities are limitless – they are limited to your imagination,” Vogel said, adding that the podcasting industry is particularly promising and ripe for improvement.
“Podcasting was that business that for 20 years hasn’t changed – it was just an RSS feed – no way to do anything different,” he said. Now Spotify offers listeners “discoverability” in podcasts.
“When you listen to podcasts, we’re going to recommend additional podcasts that you didn’t even know you wanted to listen to,” he said.
Meanwhile, Spotify will pursue innovation in music streaming, Vogel said.
“We’ve invested a lot in R&D and infrastructure to create an experience where when you go to Spotify it improves,” he said. “Your playlists get better, what we show you gets better, your experience gets better, so you hear new and unique songs. “
The company’s ambitions go beyond consumers, he said. It also aims to improve the experience for musicians and other audio creators.
“What we also want to become is the best platform for creators to create and disseminate their art,” he said. “Whether it’s music, whether it’s podcasting, whether it’s anything else, if you come to Spotify and we make it easy for you, we help you monetize and we help you market yourself, you’re going to want work more with us. . ”