Spotify is planning to hire hundreds of employees and is committed to expanding its advertising sales business in Europe and other regions. Spotify’s move is aimed at increasing revenue from customer groups. The music streaming giant has a large customer base, but most customers do not pay monthly fees.
Lee Brown, the head of Spotify’s advertising business, said the company has increased its advertising sales staff in Europe, Australia and Canada by 70%. He said: The company is investing in the advertising business. In the long run, the situation where advertising revenue accounts for less than 10% of the company’s total revenue is about to go forever.
Brown also revealed that Spotify has hired an advertiser with 25 years of international experience Business executive, this executive will be responsible for leading the company’s international advertising sales business.
Spotify’s revenue currently comes from two sources: paid subscriptions and advertising to non-paying users. Spotify’s advertising business has been hit by the new crown epidemic, but this year the business has resumed growth.
Among the company’s 365 million monthly active users, 210 million users will receive advertisements, and this part of the revenue accounts for approximately 12% of its total revenue. Some analysts said: Advertising not only brings revenue to Spotify but also reduces the company’s operating costs, because advertising reduces the number of songs played, thereby reducing the music royalties to a certain extent.
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The number of podcasts on Spotify has also grown significantly. As of the second quarter, the number of Spotify’s podcasts rose to 2.9 million, an increase of nearly 12% from the previous quarter. This has also increased Spotify’s advertising revenue, because podcasts attract more users and the airing time is longer than in the past, thereby leaving more time for advertising.
Spotify is currently working hard to provide advertisers with more advertising tools and plans to provide advertisers in Germany, France, Spain and Italy with a powerful advertising platform-Megaphone. Spotify acquired Megaphone last year. Broadcasters can make and release advertisements through this advertising platform, earn income from them, and measure the influence of podcasts through this platform.
Up to now, Spotify has spent hundreds of millions of dollars to strengthen its podcasting business. Earlier this year, Spotify and Apple both launched paid subscription platforms for podcasts, which further intensified the competition between the two companies. According to market estimates, the Swedish company is expected to surpass Apple for the first time in the number of podcast listeners this year.