Alex Norström doesn’t need you to consider Spotify as a tech large. He desires you to consider it as “a giant, massive startup that’s rising.”
This mindset from Spotify’s incoming co-CEO may appear incongruous for a corporation whose 276 million paying prospects account for 3% of the world’s inhabitants, and which in 2024 achieved its first full yr of profitability.
Nevertheless 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 Govt Chairman. He defined the technique behind the transfer on a name with analysts yesterday, which you’ll 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 internet subs on the 268 million that the agency counted on the finish of the prior quarter (Q1 2025). Spotify’s complete Month-to-month Energetic Customers, which mix paying customers and ad-supported customers, grew 11% yr over yr to 696 million. Spotify paid out $10 billion to the music trade in 2024 – a full $1bn greater than in 2023.
The corporate can also be “transport” merchandise at a tempo that pleases the manager, pointing to latest launches together with lossless audio (arriving as a Premium characteristic fairly than a part of a super-premium tier), direct messaging capabilities throughout the app, and playlist mixing instruments.
However maybe most putting 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 may be “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 objective.
The expansion, he believes, will come from markets like India, Bangladesh, Pakistan, and international locations inside Africa, areas the place streaming adoption remains 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 individuals to really feel a way of surprise after they come to Spotify.”
Alex Norström
“Music is one thing great. Nearly everybody on this planet has a relationship to it, generally 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 shopper 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 individuals 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 huge alternative in entrance of us: getting nearer to a billion subscribers”.
Right here, Norström discusses his and Söderström’s aims as Spotify’s incoming co-CEOs, overlaying subjects comparable to subscriber adoption, pricing technique, geographic development, Spotify’s relationship with the music trade, and extra.
Credit score: Sir. David/Shutterstock
What’s on the high of your to-do record on day one as co-CEOs?
To start with, I’d say the whole lot goes rather well for us proper now. We’re hitting each mark on consumer development and subscriber [acquisition]. And what’s extra is that now we have, over the previous 5 years, persistently elevated engagement, which is a good proxy for individuals persevering with to like Spotify.
We’re taking market share. We’re not dropping plenty of customers once we elevate costs. We’re growing the payouts to the music trade, to artists, to podcasters, to authors, and so forth. So we’re actually in a very good place.
After which if you concentrate on, what our focus goes ahead, you possibly can give it some thought in two methods. One is, we’ll relentlessly preserve including worth again to subscribers and customers. We are going to push the boundaries in terms of innovation, and we’ll proceed to work actually arduous, preserve our bar actually excessive, and attempt to ship.
“Do I believe we’re going to get to 99% of the world’s inhabitants? Possibly not. That’s loopy. Nevertheless it’s not so unimaginable to get to 10% or 15%.”
We’ve got been transport 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 record simply goes on and on. So I’m tremendous happy concerning the tempo of transport [products], as a result of it’s about the identical factor: it’s including worth again. That’s essential to me.
After which there’s an extra, longer outlook. I have a look at the expansion alternative of Spotify. There’s nonetheless a lot left. Take into consideration the subscriber depend now we have at the 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? Possibly not. That’s loopy. Nevertheless it’s not so unimaginable to get to 10% or 15%. So we expect there’s nonetheless tons 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. To start with, 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. We’ve got spent plenty of time speaking to one another daily for 15 years, and have been pushed to regularly tackle extra accountability and be extra accountable for Spotify. And so the change you’re seeing is gradual.
And extra lately – we’re speaking two and a half, nearly three years in the past now – Daniel gave us much more accountability to tackle extra of the day-to-day and overseeing technique and operations of Spotify.
“We do have our totally different domains and specialties, however what’s essential is that we handle the whole lot collectively.”
And in that second, we determined to work collectively, nearly joined on the hip, to deal with Spotify’s alternatives and issues. We’ve got assembled an built-in group to develop new instruments that can lead the corporate, and the outcomes have been substantial. The affect has been huge over the past two to 3 years.
And to return to your query, the cut up there on the floor is clear: Gustav’s area experience lies inside product and expertise. Mine is inside subscribers on the buyer finish, in fact, together with promoting and content material. I oversee our renewals, interface with the music trade and artists, and handle the opposite verticals as nicely. Additionally, the advertising and markets.
We do have our totally different domains and specialties, however what’s essential is that we handle the whole lot collectively, and we additionally know one another’s areas. There may be plenty of respect for one another’s area experience. Gustav is deeply all for enterprise. I like to consider myself as a product man as nicely. So, we acquire extra mind capability by combining our particular person capacities, integrating one another right into a single function and accountability set.
Spotify
The announcement talked about that Daniel Ek will nonetheless decide capital allocation in his new function as Govt Chairman. Does that imply that main M&A choices 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 so much 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 Govt Chairman, he’ll give attention to 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 significantly. And we expect that’s largely how now we have operated up to now few years already. So there ought to be no massive surprises.
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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 great. Nearly everybody on this planet has a relationship to it – generally even earlier than they get uncovered to language. And so it’s our job to determine methods to 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 shopper merchandise, and you’ll see that in how a lot individuals interact with artwork and music.
So I simply assume the chance could be very giant. And for us, we’re in an excellent place. We’re going to proceed so as to add worth and ensure we resolve 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 an excellent 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 plenty 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 number 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 plenty of development popping out of India. India is a improbable nation that’s rising its GDP by 8% yr over yr, and it’s going to proceed to do this for the foreseeable future.
It’s a really populous nation of 1.4 billion individuals. In reality, I believe it’s bigger now than China. Moreover, you may have Bangladesh and Pakistan, in addition to Southeast Asia, which continues to develop. Quite a lot of these markets are very bottom-heavy of their inhabitants pyramid, which implies that they’ve plenty of younger customers, and so they’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 steadiness quantity development in these areas with sustaining and driving that international profitability Daniel Ek talked about reaching for the primary time final yr?
We think about each market particularly and methods to handle the alternatives there.
And it’s apparent that our ARPU is totally different around the globe, however we have a look at every market in another way, not simply in terms of methods to package deal and worth a product, however clearly additionally in terms of content material and methods to do advertising, and so forth.
And we’re equally completely satisfied 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 when it comes to the merchandise out there through Spotify. There was plenty of discuss round ‘SUPER PREMIUM‘ tiers this yr. How a lot of a possibility do you see in Spotify’s subscription choices changing into ‘segmented’ with higher-priced tiers on high of the present Premium providing, or do you see an even bigger alternative in additional frequent worth will increase of your present tiers?
It’s an excellent query that’s been requested many instances. We’ve got a really excessive bar at Spotify in terms of transport merchandise, and we’re working actually arduous to attain that in terms of add-ons and several types of further merchandise to our present portfolio set.
And the way in which to consider it’s if you happen to take a peek at what’s happening in audiobooks for Spotify. Three months in the past we launched an add-on for audiobooks [Audiobooks +].
“We’ve got a really excessive bar at Spotify in terms of transport merchandise, and we’re working actually arduous to attain that in terms of add-ons and several types of further merchandise to our present portfolio set.”
You may think about the identical recipe for music, or related recipe, the place you mainly have your free product, you may have a Premium product, and you’ve got add-ons on high of that.
Proper now, it’s one in audiobooks. Possibly there can be extra. And proper now, we’re seeing an excellent pure segmentation and self-selection into these totally different merchandise inside that vertical. And it’s working.
And for music, there are plenty of totally different segments of individuals and audiences. Trying lengthy into the long run, 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 preserve investing in additional worth there. However on high of this, we’ll have a look at all of the totally different segments and attempt to construct merchandise and add-ons.
Daniel Ek wrote that Spotify has “helped reshape an trade 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, massive 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 an excellent place within the trade.
“Clearly, we keep watch over competitors and what’s happening out there – however we undoubtedly focus extra on ourselves and the way we differentiate, and the way we preserve fixing issues for customers.”
Clearly, we keep watch over competitors and what’s happening out there – however we undoubtedly focus extra on ourselves and the way we differentiate, and the way we preserve fixing issues for customers.
I imply, it’s fairly insane. We’ve talked concerning 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 each 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 cell shift. I’m curious, from a enterprise perspective, what’s the largest alternative and what’s the largest danger with reference to AI for Spotify?
At each paradigm shift, the door opens up for enormous development and plenty of new alternatives. Gustav and I’ve each lived via a few these, beginning with the dot-com growth of the late Nineteen Nineties and early 2000s, and persevering with via to Internet 2.0, which formed the trade 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 nicely.
“Each of us are very clear-eyed on the truth that AI is the largest shift that now we 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 now we have ever seen.
And being the buyer enterprise we’re at the moment, with the footprint now we have at the moment, the potential is simply immense for us. So we’re each very, very enthusiastic about what’s coming, each on the expertise 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 trade.
On that time, when it comes to the music trade, you talked about the renewals that you simply’ve accomplished this yr with Common, Warner, Sony, Kobalt, Merlin. May you give us an replace on Spotify’s enterprise improvement momentum and relationship with the broader music trade at the moment?
Such as you mentioned, we’ve simply accomplished renewals with UMG, Sony, Warner, Merlin, and the record goes on. You’ve written about it.
And the underlying philosophy now we have in these renewals could be very primary: we view the music trade’s issues as our personal at the moment. As a result of in the long run, 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 word that acquired 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 shopper 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 totally different stakeholders – buyers, creators, and customers?
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 now we have.
We’ve got actually engaged past the stakeholders that we’ve been addressing earlier than. So now we have been a part of analyst calls. I’ve personally spent plenty of time within the music trade the previous three years, main our renewal efforts.
Gustav has frolicked on the expertise 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 now we have executed.
