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Note: Our audio creator revenues forecast includes all revenues generated by US-based independent creators on digital audio distribution platforms such as Apple Music and Spotify and independent distribution platforms. It includes advertising, sponsorships, platform payouts, subscriptions, merchandising, and other revenues from podcasts, audiobooks, and digital music and radio content.

Spotify allows music made with autotune or AI tools, as long as it doesn’t venture into impersonation. Last year, a slew of AI-generated music entered Spotify’s library, taking revenue from real musicians and racking up millions of streams.

How can Spotify grow its advertiser appeal? The music platform must tread carefully to attract advertisers while retaining customers.

Spotify’s share of listenership is more than double that of many other music services. Several studies quantify its dominance: For instance, Spotify saw 40% penetration of the population, well ahead of YouTube Music at 33%, and more than double the rates for Amazon Music and Apple Music, per Edison Research’s Infinite Dial 2022 Canada study.

Premium pricing: New subscription tiers, including audiobook and music-only plans, allowed for multiple price hikes. Music licensing: A multiyear deal with Universal Music Group announced late last month offers better artist compensation while potentially eliminating a $200 million annual bundle discount on US mechanical royalties.

Our take: The deal underscores the streaming industry’s evolution, balancing innovation with demands for fairer creator compensation. While streaming has revitalized the music business, financial disparities between platforms and creators remain unresolved. This agreement could set an example for partnerships aimed at addressing these concerns.

The streaming platform said using AI for coding assistance, general operating tasks, and content moderation management reduced costs and improved productivity in 2024. Spotify also said that using Google NotebookLM helped it quickly produce an AI-generated podcast addition to its Wrapped campaign, which received a mixed reaction from users.