Spotify has announced updates to its free user experience globally to deepen engagement and provide advertisers with more opportunities to connect with listeners.
Listeners on the free tier can now pick and play any song they want in a playlist. Previously, they could only play in shuffle mode.
Users are now also able to search and play specific songs and can also share tracks. Before the latest updates, no on-demand playback was available.
Moreover, listeners can now use these features in playlists, including the Daylist option, which allows people to discover music that suits a specific moment.
Virtuous cycle
Spotify continues to highlight the free offering as a fundamental stepping stone to its premium tier, alongside its role in allowing advertisers to connect with listeners.
Ben Bullock, director of North America business, said: “More enhancements for users means more enhancements for ads too. The more we can do for the free experience to deepen engagement with listeners, the more opportunity for advertisers to connect with users.”
He called this is a “virtuous cycle”, with the free tier acting as a funnel for revenue, which supports the ad business, then with more engagement leading to more opportunity for advertisers, as well as driving users to the premium subscription plan.
According to Spotify, 60% of users start on the platform with the free version and later upgrade to premium.
At the end of Q2, despite reporting double-digit growth in subscribers and monthly active users, the audio streaming giant’s advertising business saw a 1% decline to €453m.
During the quarter, it launched the Spotify Ad Exchange (Sax), which allows advertisers to access Spotify’s logged-in users via real-time auction, with full addressability and measurement capabilities.
The company expects to see benefits from Sax in the longer term, with chief product officer Gustav Söderström stressing the “need to see some more progress” with Spotify’s advertising proposition during its Q2 results.
Spotify’s ad-supported revenue declines despite growth in advertisers
