Which Spotify Questions Should We Cover ?
On Friday Feb 4th, @pat_connolly, Ross Klein, @uplusk and I will be hosting an investing discussion about Spotify.

Which of the $SPOT questions below should we cover? We're trying to narrow it down to about seven questions.

Upvote your favorites in the comments!

Is there an important Spotify topic that should take priority?


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Nathan Worden's avatar
1) CEO Daniel Ek said that Spotify’s goal is to get 40% of revenue to be coming from ads. Is that 'audacious goal setting' as a managerial tactic or is that an actual financial target that he believes in?
Dissecting the Markets's avatar
@nathanworden I think its audacious considering that 90% of their revenues come from premium subscriptions
Nathan Worden's avatar
2) Ad-load: how many ads per 15 minutes do you think free users will put up with?
Pat Connolly's avatar
@nathanworden They recently added mid roll ads to the Joe Rogan podcast.

Beforehand you could just skip the first couple minutes of the episode as he did ad reads but now you can't preemptively avoid ads (you're also shown a visual pop up ad when you open the app to find the skip button).
Nathan Worden's avatar
@pat_connolly Very smart, if I know I'm not going to be interested in ads I try and skip past them right away. The first like 8 minutes of Rogan or Tim Ferris was always 'skip time' for me.
Dissecting the Markets's avatar
@nathanworden if it's short episodes, only one ad per episode. If its long, like one every 30 minutes.
Nathan Worden's avatar
3) Why are podcasts strategically important to Spotify?
Dissecting the Markets's avatar
@nathanworden my answer to that is that the economics of podcasts are much better than the economics of music streaming. The economies of scale that come with having one fixed costs and no variable costs (assuming that there's little to no advertising needed to get people listening i.e. Joe Rogan, Addison Rae, etc.) makes the business a whole lot more attractive.

Also, podcasts are already garnering more views than your average TV networks like CNN.
Nathan Worden's avatar
4) What percentage of users on Spotify are paid subscribers?
Heavy Moat Investments's avatar
@nathanworden Question 4 and 5 are pointless imo. Just a number you can look up on the last earnings report. I upvoted the most interesting questions.
Nathan Worden's avatar
Thanks @stonkmetal! Very helpful :)
Dissecting the Markets's avatar
@nathanworden I think its a good question as long as you tie it to finding how many potential premium subscribers Spotify could have in the future
Nathan Worden's avatar
5) How many monthly active users does Spotify have?
Chris Tolvkin's avatar
@nathanworden Spotify released earnings yesterday and here are the updated numbers (also from the investor relations page)
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Nathan Worden's avatar
6) Why would an advertiser rather put their ad on Spotify than Facebook or TicTok?
Dissecting the Markets's avatar
@nathanworden because many have a message to say and aren't fond of making videos or images to convey that image
Nathan Worden's avatar
7) Which area of growth presents the biggest opportunity for Spotify?
=> Live events
=> Programmatic podcasting advertising
=> Increasing the ad load on free users
=> Self-serve recurring ad revenue
Dissecting the Markets's avatar
@nathanworden I say live events. Free users will get fed up if there receive more ads than they're currently receiving.
Nathan Worden's avatar
8) What do you want to see Spotify invest in more, more sales people, or more automation for self serve advertising?
Dissecting the Markets's avatar
@nathanworden I say invest more in finding ways to change the way in which creators get paid. Audius is already disrupting Spotify.
Nathan Worden's avatar
9) Will future growth come more from the ad-supported or premium users?
Dissecting the Markets's avatar
@nathanworden I say premium users. They're more profitable and many of us don't like ads.
Nathan Worden's avatar
10) What is the difference between a US listener and an emerging market listener? Is one worth more than the other? By how much?
Dissecting the Markets's avatar
@nathanworden that's a good question!
Nathan Worden's avatar
11) How much has Spotify's premium revenue decelerated?
Nathan Worden's avatar
12) Brining in revenue is one thing, but achieving profitability is another. How can Spotify combat against the record labels squeezing their margins?
Nathan Worden's avatar
13) Spotify guides for monthly active users but they miss their targets all the time (Netflix has trouble guiding MAUs too). Why is it so hard to guide for monthly active users at scaled subscription platforms like these?
Nathan Worden's avatar
14) How can advertising be integrated into podcasting beyond just a host reading the ad?
Nathan Worden's avatar
15) A lot of big advertisers are becoming more choosy about which podcasts they want to advertise on. There’s a cluster of podcasts where they want to be. Is there much value in advertising on the long-tail of podcasts?
Dissecting the Markets's avatar
@nathanworden I think that advertisers should be able to choose which podcasts specifically they can advertise on. There are many small and niche podcasts that provide a great place for some businesses to advertise on.
sam stribling's avatar
I’d be interested in you guy’s take on the recent Neil Young vs. Joe Rogan. Specifically, that $SPOT spent a record amount to bring Joe onto the platform but other artists are leaving. What kind of risk is this and can it spread beyond these two artists.
Nathan Worden's avatar
Really great thoughts @dissectmarkets! Thanks for all your input— most of your points I agree with, and some will be very fun to unpack more on the discussion. Thanks for your thoughts! Will share these with the crew :)
With Rogans $100m contract isn’t Spotify sponsoring misinformation and claiming they’re avoiding censorship? How is that a good business model when they’re bleeding subscribers?

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