However it speaks to the ambition (and alternative) that Norström sees forward as he prepares to take the helm alongside Gustav Söderström on January 1, 2026.
The management transition, introduced on Tuesday (September 30), will see founder Daniel Ek step again from day-to-day operations after almost 20 years as CEO, assuming the function of Government Chairman. He defined the technique behind the transfer on a name with analysts yesterday, which you’ll be able to examine right here.
For Norström, who’s spent 15 years at Spotify and presently serves as co-President and Chief Enterprise Officer, it represents each continuity and alter.
“The change you’re seeing is gradual,” Norström tells MBW in an unique interview the morning after the announcement.
He and Söderström have already been operating a lot of Spotify’s day-to-day operations for almost three years, with Ek more and more taking up what Norström calls “a training function.”
The timing of the transition coincides with what Norström describes as Spotify hitting “each mark” – citing consumer development, subscriber adoption, and elevated payouts to “artists, podcasters, [and] authors.”
Spotify’s Premium Subscriber base (of 276m) on the shut of Q2 was up by+8 million web subs on the 268 million that the agency counted on the finish of the prior quarter (Q1 2025). Spotify’s whole Month-to-month Energetic Customers, which mix paying customers and ad-supported customers, grew 11% 12 months over 12 months to 696 million. Spotify paid out $10 billion to the music business in 2024 – a full $1bn greater than in 2023.
The corporate can also be “delivery” merchandise at a tempo that pleases the manager, pointing to current launches together with lossless audio (arriving as a Premium function reasonably than a part of a super-premium tier), direct messaging capabilities throughout the app, and playlist mixing instruments.
However maybe most hanging is Norström’s imaginative and prescient for the place Spotify goes subsequent.
Whereas acknowledging that reaching 99% of the world’s inhabitants paying for its providers is perhaps “loopy,” he doesn’t assume 10-15% is unimaginable.
That will translate to round a billion subscribers, a quantity he explicitly references as a longer-term purpose.
The expansion, he believes, will come from markets like India, Bangladesh, Pakistan, and international locations inside Africa, areas the place streaming adoption continues to be nascent however accelerating quickly. He compares the present alternative to “the start of LATAM,” when Spotify started its explosive development throughout Latin America.
“I would like folks to really feel a way of surprise after they come to Spotify.”
Alex Norström
“Music is one thing fantastic. Nearly everybody on this planet has a relationship to it, typically even earlier than they get uncovered to language,” Norström says. “Name me loopy, however I consider that is the largest alternative there may be in client merchandise.”
As he and Söderström put together to formally take the reins, he outlines his long-term imaginative and prescient for Spotify: “I would like folks to really feel a way of surprise after they come to Spotify, which they’re doing now already, however much more,” he tells us. “I would like us to deal with that large alternative in entrance of us: getting nearer to a billion subscribers”.
Right here, Norström discusses his and Söderström’s targets as Spotify’s incoming co-CEOs, masking subjects reminiscent of subscriber adoption, pricing technique, geographic development, Spotify’s relationship with the music business, and extra.
Credit score: Sir. David/Shutterstock
What’s on the high of your to-do listing on day one as co-CEOs?
Initially, I’d say all the pieces goes rather well for us proper now. We’re hitting each mark on consumer development and subscriber [acquisition]. And what’s extra is that we now have, over the previous 5 years, persistently elevated engagement, which is a superb proxy for folks persevering with to like Spotify.
We’re taking market share. We’re not shedding quite a lot of customers once we increase costs. We’re rising the payouts to the music business, to artists, to podcasters, to authors, and so forth. So we’re actually in a very good place.
After which if you consider, what our focus goes ahead, you may give it some thought in two methods. One is, we’ll relentlessly hold including worth again to subscribers and customers. We’ll push the boundaries on the subject of innovation, and we’ll proceed to work actually arduous, hold our bar actually excessive, and attempt to ship.
“Do I believe we’re going to get to 99% of the world’s inhabitants? Perhaps not. That’s loopy. However it’s not so unimaginable to get to 10% or 15%.”
Now we have been delivery greater than we’ve shipped in an extended, lengthy whereas. We simply improved our free tier. We simply launched messages inside Spotify. We launched the playlist mixing instruments, lossless, interactive DJ, and different new AI options. Video has been scaling. We’ve launched audiobooks in additional markets. The listing simply goes on and on. So I’m tremendous happy in regards to the tempo of delivery [products], as a result of it’s about the identical factor: it’s including worth again. That’s necessary to me.
After which there’s an additional, longer outlook. I take a look at the expansion alternative of Spotify. There’s nonetheless a lot left. Take into consideration the subscriber rely we now have right this moment – we contact roughly 3% of the world’s inhabitants.
Do I believe we’re going to get to 99% of the world’s inhabitants? Perhaps not. That’s loopy. However it’s not so unimaginable to get to 10% or 15%. So we predict there’s nonetheless heaps and many development available, and we’re fortunate to have music as our core enterprise as a result of it actually has a really giant TAM [total addressable market].
May you clarify to our readers the way you and Gustav Söderström [pictured inset] will cut up decision-making going ahead as Co-CEOs…
After all. Initially, each of us have been at Spotify for a decade and a half. We each labored actually intently with Daniel for an extended, very long time. Now we have spent quite a lot of time speaking to one another day by day for 15 years, and have been pushed to step by step tackle extra duty and be extra accountable for Spotify. And so the change you’re seeing is gradual.
And extra not too long ago – we’re speaking two and a half, nearly three years in the past now – Daniel gave us much more duty to tackle extra of the day-to-day and overseeing technique and operations of Spotify.
“We do have our completely different domains and specialties, however what’s necessary is that we tackle all the pieces collectively.”
And in that second, we determined to work collectively, nearly joined on the hip, to deal with Spotify’s alternatives and issues. Now we have assembled an built-in crew to develop new instruments that can lead the corporate, and the outcomes have been substantial. The influence has been large over the past two to 3 years.
And to return to your query, the cut up there on the floor is apparent: Gustav’s area experience lies inside product and know-how. Mine is inside subscribers on the buyer finish, in fact, together with promoting and content material. I oversee our renewals, interface with the music business and artists, and handle the opposite verticals as properly. Additionally, the advertising and marketing and markets.
We do have our completely different domains and specialties, however what’s necessary is that we tackle all the pieces collectively, and we additionally know one another’s areas. There may be quite a lot of respect for one another’s area experience. Gustav is deeply serious about enterprise. I like to think about myself as a product man as properly. So, we achieve extra mind capability by combining our particular person capacities, integrating one another right into a single function and duty set.
Spotify
The announcement talked about that Daniel Ek will nonetheless decide capital allocation in his new function as Government Chairman. Does that imply that main M&A selections would nonetheless sit with him, or would that be a joint decision-making course of between you and Gustav in collaboration with Daniel? How would that work?
Daniel has been speaking rather a lot about him taking up the teaching function and being extra of a coach than a participant. And to be sincere with you, he’s been doing that function actually, rather well.
And as he transitions into Government Chairman, he’ll deal with the lengthy arc of the corporate.
And once more, that’s one thing that we take pleasure in coping with collectively. And so far as the function of coach right here, clearly we take that very critically. And we predict that’s largely how we now have operated up to now few years already. So there must be no large surprises.
SOPA/Alamy
You highlighted a statistic about 3% of the world’s inhabitants paying for Spotify, and also you mentioned reaching 10-15% of the world’s inhabitants as paying subscribers is “not unimaginable” – what must occur to get there?
An important factor right here is that music is one thing fantastic. Nearly everybody on this planet has a relationship to it – typically even earlier than they get uncovered to language. And so it’s our job to determine how one can deliver artists’ work to customers wherever on this planet.
So name me loopy, however I consider that is the largest alternative there may be in client merchandise, and you may see that in how a lot folks interact with artwork and music.
So I simply assume the chance may be very giant. And for us, we’re in place. We’re going to proceed so as to add worth and ensure we clear up issues for customers and subscribers.
On yesterday’s name with analysts, You in contrast present development alternatives to “the start of LATAM” – what particularly reminds you of that interval?
That’s query. It’s apparent that the US and Western Europe are additional alongside of their improvement of adopting streaming providers and subscriptions. However there’s quite a lot of development nonetheless available in these areas.
Now LATAM, which you’re asking about, is just not as far alongside. So we’re seeing a lot of development there in and round Mexico and Brazil [for example].
“It’s fascinating to see the numerous development rising from these areas, and I believe it’ll comply with within the footsteps of Latin America, finally additionally reaching Western Europe and the US.”
I additionally talked about yesterday that we’re seeing quite a lot of development popping out of India. India is a incredible nation that’s rising its GDP by 8% 12 months over 12 months, and it’s going to proceed to do this for the foreseeable future.
It’s a really populous nation of 1.4 billion folks. Actually, I believe it’s bigger now than China. Moreover, you will have Bangladesh and Pakistan, in addition to Southeast Asia, which continues to develop. Lots of these markets are very bottom-heavy of their inhabitants pyramid, which signifies that they’ve quite a lot of younger customers, they usually’re nearly taking over streaming merchandise like ours.
It’s fascinating to see the numerous development rising from these areas, and I believe it’ll comply with within the footsteps of Latin America, finally additionally reaching [the adoption levels of] Western Europe and the US.
You particularly talked about India, Bangladesh, Pakistan and markets inside Africa as development alternatives. However these are additionally a number of the lowest ARPU markets. How do you stability quantity development in these areas with sustaining and driving that international profitability Daniel Ek talked about reaching for the primary time final 12 months?
We think about each market particularly and how one can tackle the alternatives there.
And it’s apparent that our ARPU is completely different around the globe, however we take a look at every market in a different way, not simply on the subject of how one can package deal and value a product, however clearly additionally on the subject of content material and how one can do advertising and marketing, and so forth.
And we’re equally blissful when there’s development in India in addition to LATAM, or any market in Europe or the US.
You talked about earlier within the name about driving worth for listeners by way of the merchandise out there by way of Spotify. There was quite a lot of speak round ‘SUPER PREMIUM‘ tiers this 12 months. How a lot of a possibility do you see in Spotify’s subscription choices turning into ‘segmented’ with higher-priced tiers on high of the present Premium providing, or do you see a much bigger alternative in additional frequent value will increase of your current tiers?
It’s query that’s been requested many instances. Now we have a really excessive bar at Spotify on the subject of delivery merchandise, and we’re working actually arduous to attain that on the subject of add-ons and various kinds of extra merchandise to our present portfolio set.
And the best way to consider it’s in case you take a peek at what’s happening in audiobooks for Spotify. Three months in the past we launched an add-on for audiobooks [Audiobooks +].
“Now we have a really excessive bar at Spotify on the subject of delivery merchandise, and we’re working actually arduous to attain that on the subject of add-ons and various kinds of extra merchandise to our present portfolio set.”
You’ll be able to think about the identical recipe for music, or comparable recipe, the place you mainly have your free product, you will have a Premium product, and you’ve got add-ons on high of that.
Proper now, it’s one in audiobooks. Perhaps there might be extra. And proper now, we’re seeing an excellent pure segmentation and self-selection into these completely different merchandise inside that vertical. And it’s working.
And for music, there are quite a lot of completely different segments of individuals and audiences. Trying lengthy into the longer term, it’s nearly like a layer of mosaic on high of this base layer that we’ve had for therefore a few years.
We’ll hold investing in additional worth there. However on high of this, we’ll take a look at all of the completely different segments and attempt to construct merchandise and add-ons.
Daniel Ek wrote that Spotify has “helped reshape an business that’s not solely rising once more, however reaching new heights.” However you’re additionally competing with tech giants like Apple, Amazon, and YouTube for listeners’ and viewers’ consideration. How do you preserve Spotify’s positioning out there?
We clearly can’t communicate to the competitors, however Gustav and I each nonetheless view Spotify as a startup – a giant, large startup that’s rising. And our focus is, once more, relentlessly to maintain including worth and fixing issues for subscribers and customers. That’s how we’ll win. That’s how we’ll proceed to develop and obtain place within the business.
“Clearly, we regulate competitors and what’s happening out there – however we positively focus extra on ourselves and the way we differentiate, and the way we hold fixing issues for customers.”
Clearly, we regulate competitors and what’s happening out there – however we positively focus extra on ourselves and the way we differentiate, and the way we hold fixing issues for customers.
I imply, it’s fairly insane. We’ve talked in regards to the 3% of the world’s inhabitants subscribing to Spotify, however there’s additionally a quantity that we haven’t shared that a lot, and that’s that 90% of customers say that Spotify is important to their every day life. That’s insane to consider.
Gustav mentioned on the decision that his high three priorities are all AI-related and in contrast AI to the cellular shift. I’m curious, from a enterprise perspective, what’s the largest alternative and what’s the largest threat with reference to AI for Spotify?
At each paradigm shift, the door opens up for enormous development and quite a lot of new alternatives. Gustav and I’ve each lived by way of a few these, beginning with the dot-com increase of the late Nineties and early 2000s, and persevering with by way of to Internet 2.0, which formed the business over the past 10 years. After which the smartphone got here alongside as a giant shift, [followed by] social media, and the globalization of all these providers as properly.
“Each of us are very clear-eyed on the truth that AI is the largest shift that we now have ever seen.”
And now we’re getting into the age of AI. Each of us are very clear-eyed on the truth that that is the largest shift that we now have ever seen.
And being the buyer enterprise we’re right this moment, with the footprint we now have right this moment, the potential is simply immense for us. So we’re each very, very enthusiastic about what’s coming, each on the know-how aspect, however in addition to, clearly, the chance for doing extra enterprise and fixing extra issues for customers, and likewise supporting the expansion of the music business.
On that time, by way of the music business, you talked about the renewals that you just’ve accomplished this 12 months with Common, Warner, Sony, Kobalt, Merlin. May you give us an replace on Spotify’s enterprise improvement momentum and relationship with the broader music business right this moment?
Such as you mentioned, we’ve simply accomplished renewals with UMG, Sony, Warner, Merlin, and the listing goes on. You’ve written about it.
And the underlying philosophy we now have in these renewals may be very primary: we view the music business’s issues as our personal right this moment. As a result of ultimately, we’re tied to one another. Like I’ve mentioned many instances earlier than, the present relationships are simply higher than they’ve ever been.
Daniel wrote one thing in his leaving observe that received me fascinated with Spotify’s positioning within the enterprise of music and tech but additionally within the public area. He mentioned “all eyes (and ears) are on us”. You’re a publicly traded firm, and your monetary and consumer metrics are closely scrutinized. You’re additionally a outstanding client product that acts as a conduit for creators to distribute their music, audiobooks, and podcasts to listeners. How do you view your and Gustav’s roles as leaders of Spotify in balancing the wants of these completely different stakeholders – buyers, creators, and shoppers?
One of many issues that Daniel has pushed us to be taught and get extra publicity to up to now three years is to have the ability to deal with a number of stakeholders, and we now have.
Now we have actually engaged past the stakeholders that we’ve been addressing earlier than. So we now have been a part of analyst calls. I’ve personally spent quite a lot of time within the music business the previous three years, main our renewal efforts.
Gustav has hung out on the know-how aspect; I spend time on the enterprise aspect. The coaching wheels have been on, however they’re coming off now, and we consider we’re very well-positioned to proceed doing extra of what we now have finished.
