How Does Spotify Make Money?

 Every industry, field has been developed and upgrade by generation to generation then how the music industry will take backfoot? From listening the songs on radio stations then later downloading the songs in gallery to listen the songs online on Spotify, Gio sawn etc. we have walk miles with upgrading technology but Spotify has created his own different image on the mind of listener and artists and also has provided a better way for both of them to benefit from digital upgradation in music industry. Keep reading to know “How Does Spotify Make Money?”

How Does Spotify Make Money?

History About Spotify

 Spotify has founded by Daniel EK and martin Lorentson in Sweden in 2006.  It is an audio streaming with subscription service app. It is legally domiciled in Luxemburg the company was first launched in Stockholm and Sweden where its operational headquarters are located in. today there are so many online music listening options are available in the market but Spotify is one of the largest music glide service providers with over 500 million active users this is just a monthly basis count including there are approximately 184milion subscribers who is paying for it. this research is based on current research of march 2022.

The reason behind having millions of listeners and being the largest streaming music platform is different and new features, structure and additional different genres, millions of different artists songs in various languages and easy access. Also, with music people can enjoy the podcast as well. nearly 3.6 million podcast titles and over 80 million of worldwide track we get through Spotify and we can enjoy that whenever and wherever we want. Spotify provides a ton of listening options to listener that can be so appropriate for their current moods which can make their movement more special. The service of Spotify is worldwide it offers its service globally with a presence of185 countries and territories 

How Does Spotify Make Money?

So basically, this is all about what exact the Spotify is but how does they make money?  Spotify monetize its streaming services through two prime business segment that is premium services and Ad supported services. The Spotify service is available for both paying and nonpaying members. ad free subscription for free to people which is also convenience to listener or Spotify users also the ad supported services. According to the research of 2021 Spotify made 

Some revenue streams of Spotify

Below there are some revenue streams of Spotify

Premium revenue

As we mentioned above the audio streaming service is for both paying and non-paying members but through premium subscription service, premium subscribers get unlimited online and offline access of music and podcast with high quality streaming without any commercial break. $ 9.99 per month for this plan. If you cannot tolerate that bombarding of ads in the middle of every two-three song you can go with Spotify premium. You have to pay Through this premium service Spotify produce revenue from subscription fees. Also, you can download the songs and can listen it offline. There is different range of plans to fit the needs of every Spotify member. According to the research of TechCrunch out of total406mn that is monthly active users 180Mn people are the premium subscribers. That’s a surprising ratio of 45%. Based on 2021 data premium includes 85% of money Spotify made. With about 200 million subscribers worldwide, it says that in Spotify revenue there is over 90 percent of contribution is of premium subscriptions and the remaining money gets from advertisement’s. 

Ad-supported revenue

In this service both the premium subscribers and non-subscribers can enjoy this ad supported service. The members of ad supported revenue have limited on demand online accesses to the company’s music CatLog but also unlimited online access to its catalog of podcast. Spotify brings out money for its Ad supported segment predominantly through display, audio, and video advertising delivered through your advertising sway. Marshaling with advertising agencies that buy advertising on its platforms rather than agencies clients and also directly with some larger advertisers’.as per the data of 2021, ad supported revenue included 14% of the money Spotify made.

Spotify’s target audience

As Spotify is digital online audio and video platform which provides online podcast content also the users are mostly the youth, people from media industries, creators, artists etc. with millions of different variations of music for different test of music lovers Spotify has set about the beautiful music journey of exploring the music on the note like no one.

 According to their purpose of utilization the target audience of Spotify is advertisers, music lovers that is listeners and content creators. As there are billions of people who use Spotify on daily basis so it’s a very good way for advertisers to reach the billions of people at same time. Advertisers can be premium users or free, brands, agencies, educational institutes, product sellers, businesses etc. can use this platform to reach audiences.

On demand the Swedish serve the streaming service prominently to students and young professionals. according to statistic data the contribution of young professionals of age between 25 to 34 is most significant user segment of Spotify. They also provide various plans for different categories like family plan, student plan where you get some concession and can pay less. 

Competitors of Spotify

Currently Spotify is dominatingly competing the other music streaming industries that is Apple music, amazon music, Pandora, tidal, Tencent music and YouTube music.

The future of Spotify

Spotify is the very first digital online audio streaming platform who added podcast for audience in music is currently a leading brand in the online streaming market, giving both music and podcast feast for their listeners. In 2020 Spotify lock a $100 million deal with podcasting’s most appreciable and famous name joe organ to bring over his tremendously popular series, the joe Rogan experience, onto the platform. In addition to that it also locked the rights to produce Michelle Obama’s podcast.


So overall in music online streaming industry Spotify is currently the most demanded platform. And eventually with this upgrading performances it has bigger and better future in upcoming years.

How Does Spotify Make Money?

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