• Act I: In February 2019, Spotify achieves its first quarterly profit in its history.
• Act II: By July 2024, Spotify records two consecutive quarters of profitability and is nearing its first profitable year.
• Act III: In February 2025, Spotify announces that 2024 was its first profitable year ever.

Six years after achieving its first quarterly profit ever, Spotify made $1.235 billion in net profit. 2024 was a groundbreaking year for the streaming company–one that could transform its future forever. The platform reported a full-year profit for the first time in its history. How’s that for an elixir for investors?

Many thought such an outstanding milestone was impossible. Throughout the years, Spotify has burned cash while building an empire of 675 million users. 40% of them are paying subscribers.

How did Spotify manage to convert persistent losses into profits? And, most importantly, who bore the cost of this transformation?

The Impossible Equation: Paying the Music Industry and Making Money

Spotify was launched with a seemingly unsolvable contradiction known as the 70-30 rule. Around 70% of its revenue was allocated to music royalties paid to record labels, artists, and publishers. The remaining 30% had to cover technology, marketing, product development, global offices, and salaries for more than 9,000 skilled employees.

This equation seemed to condemn Spotify to an ongoing deficit.

Competitors such as Apple Music and YouTube Music could operate with virtually no profits because they’re backed by their multi-billion-dollar parent companies. However, Spotify needed to find a way to attain profitability or face extinction. The journey has been long and fraught with controversy.

“[For the first 16 years,] all we were focused on was driving meaningful scale. We did not worry about profitability,” Spotify founder and CEO Daniel Ek said on a conference call with analysts.

Price Increase After a Decade of Stability

After maintaining its standard price of $9.99 for over a decade, Spotify finally raised its rates. This move broke a self-imposed taboo against double-digit pricing. Two rounds of increases in several markets raised the price of the Individual plan. This simple maneuver boosted the average revenue per user and shot the gross margin up to 32.2%, a new record.

Spotify discovered that users didn’t abandon the platform after this moderate price increase. Notably, nearly all digital entertainment providers (including Netflix, Disney+, and Apple TV+) were also raising their rates.

The phenomenon of price inelasticity allowed Spotify’s 263 million paid subscribers to generate more revenue without a proportional increase in costs.

Transition from Music Platform to Media Ecosystem

Spotify’s strategic diversification has been a masterstroke. It’s no longer just a music streaming app. It’s evolved into an audio and video ecosystem, which includes:

• 6.5 million podcasts
• 330,000 video podcasts
• 350,000 audiobooks

This multi-product expansion has a hidden financial advantage. When a user listens to a podcast or watches a video podcast, Spotify doesn’t pay royalties for that playback. With music, each stream generates payments to record labels. In contrast, podcasts and videos are mainly monetized through advertising or direct agreements with creators. As a result, the unit cost is much lower.

Keeping users within the app while reducing costs was a brilliant strategic move from Spotify. With more than 270 million users consuming video content, the platform has gradually lowered its average cost per hour of use. If a user spends an hour listening to their favorite podcast instead of music, Spotify saves significantly on payments to record labels.

Year Zero: The Era of Efficiency

In December 2023, Spotify announced it would cut around 17% of its workforce, meaning about 1,500 employees. Back then, few expected that this would be the decisive factor leading the company to profitability. In the end, it was the third round of layoffs within less than 12 months.

“Over the last two years, we’ve put significant emphasis on building Spotify into a truly great and sustainable business… [Spotify] invested significantly in team expansion, content enhancement, marketing, and new verticals. These investments generally worked… [However,] our cost structure for where we need to be is still too big,” Ek shared in a letter to employees.

This acknowledgment signaled the end of an era characterized by growth at any cost. It also marked the start of what the company internally referred to as “the year of monetization.” The focus shifted from endless expansion to maximizing the value of each user and every hour of content consumed.

This change was a direct response to pressure from Wall Street. After years of tolerating and even encouraging loss-making tech companies, investors had already shifted their mindset. Rising interest rates and a more demanding economic landscape forced companies to demonstrate their ability to generate profit rather than just pursue growth.

“By most metrics, we were more productive but less efficient. We need to be both… We still have a ways to go before we are both productive and efficient,” Ek said.

The shift toward austerity led to a tangible improvement in financial performance. Operating expenses dropped from 30% of revenue in 2023 to 24% in 2024. This adjustment meant that the 18% revenue increase wasn’t offset by new costs. The results were becoming evident.

With this move, Spotify had abandoned its ambition to become the “Netflix of audio,” at least in terms of producing costly exclusive content. Acquiring Gimlet, Parcast, and The Ringer, and signing million-dollar contracts with Joe Rogan and the Obamas didn’t yield the expected returns. Throughout 2023 and 2024, the streaming company scaled back or shut off several of these initiatives, opting for a more sustainable model.

A Blow to Emerging Artists: If You Don’t Reach 1,000 Streams, You Don’t Exist

In its quest for profitability, Spotify has implemented decisions that significantly change the landscape for creators. One of the most controversial moves is the policy that, since April 2024, any song that doesn’t get at least 1,000 annual streams will no longer generate royalties.

According to Spotify, this measure aims to redirect nearly $40 million toward artists with larger audiences. That amount was previously allocated in inefficient micropayments. A company spokesperson explained that it’s about optimizing revenue sharing and avoiding the distribution of funds in very small amounts.

Denis Ladegaillerie is the CEO of Believe, the parent company of digital music distributor TuneCore. He was particularly critical of the decision. “What signal as a music industry do you send to aspiring artists if you go in that direction?” Ladegaillerie told Music Business Worldwide.

Spotify’s move may seem reasonable from an efficiency standpoint. In the end, many small payments weren’t even processed due to minimum banking thresholds. However, it also sends a discouraging message to emerging artists. They won’t receive any rewards if they don’t achieve a certain level of popularity.

Moreover, some critics argue that this could be just the beginning. The platform might set future thresholds at 5,000 or 10,000 streams, further limiting artists’ opportunities. This approach prioritizes profitability at the expense of musical diversity.

Spotify is adopting other measures to “clean up” its catalog. This includes imposing restrictions on ambient and white noise sounds that generate many passive streams with little engagement. While combating fraudulent content is necessary, these policies also impact legitimate creators of ambient or meditative content.

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The Inequality of Distribution: $10 Billion That Doesn’t Reach Everyone

The streaming economic model generates impressive numbers globally but reveals huge disparities in distribution. Spotify announced earlier this year that it will pay more than $10 billion to the music industry in 2024, bringing its total contribution to nearly $60 billion since its founding in 2006.

In a post on X, Ek defended that record, saying, “Spotify pays out more than any other music retailer—more than any other music streaming service. That’s a fact.”

But he also admitted an inconvenient truth: “Spotify doesn’t actually pay artists or songwriters directly. Just like all other streaming services, we pay rights holders, like record labels or publishers. Those rights holders are responsible for passing on streaming revenue to the artists based on the contracts they’ve signed.”

He added: “What we do know is that Spotify pays out roughly two-thirds of every single dollar we generate from music back to the rights holders. So, it’s always unfortunate and frankly disappointing to hear stories where the majority of those payments don’t make it through to an artist or songwriter.”

Variety published an article highlighting this gap between what Spotify pays and what artists receive. Beneath the impressive numbers, the reality is complex. According to Spotify’s “Loud & Clear” report, approximately 1,500 artists generated more than $1 million in royalties from Spotify alone in 2024. The number of creators generating royalties at each threshold—from $1,000 to $10 million annually—has tripled since 2017.

According to Variety, however, these numbers should be taken with caution. The money does not go directly into artists’ pockets. Record labels and distributors take a share, producers receive a cut, and managers also claim a portion. “Any notion that each of those 1,500 artists is pocketing $1 million a year (or more) from Spotify, let alone all streaming services, is wildly inaccurate,” Variety states.

Damon Krukowski, a former member of indie band Galaxie 500, recently published a post on his Substack questioning Spotify’s figures. He noted that they’re not audited and argued that Spotify isn’t a retailer, as it claims, to justify its commission. He pointed out that businesses such as bars, shops, and cinemas pay a higher percentage—50% instead of 30%—to rights holders.

The system is particularly unfair to songwriters. According to MIDIA Research data cited by Variety, of the roughly $0.004 generated per play on Spotify, 56% goes to the recording side (including the record label, distributor, and artist), 30% stays with Spotify, and only 14% goes to the publishing side (which includes the publisher, performing rights organization, and songwriter).

Of that 14%, the songwriter receives 68%, a fraction of the total. With most popular songs today credited to multiple songwriters, “the human brain can’t even comprehend the infinitesimal amount the creators of most songs earn per stream,” Variety notes.

The Elephant in the Room: Legal Minimums

One lesser-known aspect of Spotify’s economic model is how publishing rates—what songwriters and publishers are paid—are determined. While recording rates are negotiated directly between Spotify and record labels, the Copyright Royalty Board (CRB) sets publishing rates in the U.S. through a process the publishing industry considers outdated.

These rates have been gradually increasing. For 2023-2027, the CRB raised the rate paid to songwriters and music publishers by 23%, bringing it to 15.35% of a streaming service’s U.S. revenue. However, it remains far below what record labels receive for sound recordings.

“It is also important to note that this discrepancy was not instituted by Spotify or any streaming service,” Variety clarifies. However, Spotify has actively fought against larger increases. The company recently faced backlash—and even a lawsuit—for its music-audiobook bundle. Billboard estimates the move will reduce royalties paid to music companies by $150 million next year.

According to Variety, “That sleight of hand may have delighted shareholders, but was a major loss for music creators.”

Technology and Algorithms: The Flip Side

Spotify’s profitability is not solely driven by price changes. Advances in technological efficiency have allowed it to serve content to hundreds of millions of users with relatively low infrastructure costs.

Its investment in AI features, including Spotify DJ, launched in 2023, aims to boost engagement without increasing costs proportionally. Spotify states that in 2024, its AI-driven recommendation system greatly improved music discovery, creating over 3 billion personalized playlists monthly. These algorithmic efficiencies improve the user experience while optimizing content distribution and reducing operational costs—a win-win-win scenario.

After years of skepticism about Spotify’s profitability, Wall Street responded enthusiastically. Shares surged 11% after the February announcement and have continued to rise. Spotify’s market capitalization recently surpassed $124 billion—more than Universal Music Group and Warner Music Group combined.

The narrative has shifted from “Can it do it?” to “How much more can it grow?” Ek has defined 2024 as “the year of monetization” and promises that 2025 will be “the year of accelerated execution.”

Winners and Losers

After nearly two decades, Spotify has found the formula for profitability. This milestone marks a turning point not only for the company but for the entire music industry.

The winners are clear:

1. Shareholders, who have seen the company’s value soar.
2. Executives, whose strategies have paid off.
3. The European tech sector, which now boasts a profitable global champion.

Major labels have also thrived, earning record revenues annually while preserving their dominant position in the industry.

However, there are also clear losers:

1. Emerging artists, who struggle with Spotify’s play-threshold model.
2. Songwriters, who earn only tiny fractions per song.
3. Employees, many of whom have been laid off in the name of operational efficiency.

As Ek put it: “At the end of the day, artists are doing incredible things and fans around the world are deciding who succeeds. We’re proud to play a role in that.”

But the key question remains: Will Spotify’s role evolve into a more equitable system for all participants in the music ecosystem, or will the pressure to maintain profitability simply reinforce existing inequalities?

As Variety puts it, “But streaming’s payment system, devised back when it generated so little money that the difference between 13% and 15% was almost irrelevant, is in dire need of revision,” now that it has proven it can generate substantial profits.

Like many technological revolutions, the digital transformation of music has created an industry where music consumption is at an all-time high, and revenue is approaching pre-digital levels. Yet paradoxically, it has never been harder for the average artist to make a living solely from music.

Time will tell whether Spotify’s financial success leads to a more sustainable system for all or simply cements a model that benefits a privileged few. For now, its $1.138 billion net profit proves that the once-elusive equation has finally been solved.

Image | Fortune Live Media

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Spotify closed 2024 with a historic milestone: its first full year of earnings after years of balancing between occasional gains and consecutive quarters in the red. And it did so while expanding beyond music.

Why it matters. Not only did the company end its first year in the black, but it proved it can be profitable without sacrificing growth. This comes as Wall Street demands results from tech companies, showing little patience for future promises.

• Six years ago, Spotify turned a profit for the first time.
• Now, it has achieved its first fully profitable year.

The numbers

• 675 million monthly active users (up 12% year-over-year).
• 32.2% gross margin (a record).
• $493 million in operating profit.
• $10 billion paid to the music industry ($60 billion since its launch).

The context. Spotify has been quietly but radically transforming. It’s no longer just a music streaming platform—and likely never will be again. Its catalog now includes:

• 6.5 million podcasts.
• 330,000 video podcasts.
• 350,000 audiobooks.

According to the company, 270 million users have consumed video content.

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This shift is a major opportunity. Spotify keeps users engaged while offering content that doesn’t require hefty royalty payments—a win-win. On top of that, its bet on advertising is paying off.

Between the lines. Spotify’s strategy goes beyond audio. It’s building a full creator ecosystem, following a model similar to YouTube’s. In its earnings report, the company highlighted key milestones:

• 70% of eligible programs participate in its affiliate program.
• The number of video creators is growing by more than 50% annually.
• Diversification reduces reliance on record labels.

What’s next? The question is whether Spotify can sustain this profitability, especially amid fierce competition for user attention from TikTok, Apple and YouTube, which is doubling down on podcasting.

Spotify CEO and founder Daniel Ek has a broader vision: “We will continue to focus on initiatives that have long-term impact.” This profitability may just be the first step in a deeper transformation of its business.

Image | Thibault Penin (Unsplash)

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“The next era of streaming innovation.” That’s how those involved describe the deal Universal Music Group and Spotify have struck. The multi-year agreement will impact recordings and artist royalties and is billed as the first step in what the companies call the “streaming 2.0 era.”

The deals are back. The pact is notable for many reasons, but mostly because it’s the first deal of Spotify with a major industry player in several years. There’s also talk of improving artist payment terms, which have been declining since last April due to a U.S. tariff on the platform aimed at audiobook listeners. Leveraging a 2023 law, the tariff allowed Spotify to reduce songwriter royalties, provoking backlash from the music community. This deal with Universal addresses some of the issues raised by that tariff, but it’s not solely focused on that.

Spotify for superfans. The concept of “streaming 2.0” isn’t new—Universal has been exploring it for some time. But this deal marks a significant step forward. What might “streaming 2.0” look like? The Verge describes it as “Spotify for superfans.” According to Universal, this could include “super-premium” subscriptions offering perks such as early access to music, exclusive deluxe editions, high-resolution audio, and artist Q&A sessions.

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More streaming than ever. “Streaming 2.0” aims to enhance platforms’ technological capacity to deliver extras to consumers. This means platforms need deals with major labels to provide better-quality audio, accompanying videos, exclusive content, and artist-specific perks. Alternatively, the majors themselves could merge their streaming services, much like what occurred in the video streaming sector after Netflix’s rise. Is Spotify following suit?

Does this deal make sense? Similar ideas have been tried in the video streaming world. Prime Video, for instance, includes features like “X-Ray,” offering trivia, filmographies, and e-commerce options tied to its content. However, few would argue these extras are a major draw compared to its catalog of movies and shows. These days, people prioritize catalogs—they subscribe, binge content, and unsubscribe in quick cycles. While extras like those in “streaming 2.0” may sweeten the deal, are they truly the foundation of streaming’s future?

Image | Heidi Fin (Unsplash)

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In this post, we’ll explain the main differences between Spotify Free and Spotify Premium so you can understand each option and make an informed decision. While the free plan provides access to the music streaming service, it significantly has more limitations than the Premium subscription.

Spotify Free vs. Spotify Premium

The comparison table below showcases Spotify’s features and highlights which ones are accessible in the free version. It covers all Spotify Premium plans, including Individual, Duo, and Family plans. However, the table focuses on the differences between the free and paid versions rather than the distinctions among the several paid subscriptions.

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Main Differences

First, it’s important to note that while Spotify advertises its Premium version as offering high sound quality, it actually provides one of the lowest sound quality in the streaming world. It’s the only major service that doesn’t offer HD quality. With a Premium subscription, you receive 320 kbps, which is comparable to MP3 audio quality from 15 years ago. While this may be enough for most users, it’s worth considering that the free plan offers an even lower audio quality.

The most well-known difference between the two versions is that the free version includes ads that interrupt playback every few songs. Additionally, if you opt for the free subscription, you won’t be able to download music for offline listening, nor can you customize or rearrange your playback queue.

Spotify Free also plays random songs, meaning if you want to play songs in any order, you’ll need to pay for a Premium subscription. Moreover, it lacks features such as real-time listening with friends on different devices and several AI functions.

Despite these limitations, both versions allow you to create custom playlists and enjoy social features, such as seeing what your friends are listening to. You can also view song lyrics without having to pay, which was once a paid-only feature, and use Spotify Connect to control playback on one device from another. In addition, all subscriptions, whether paid or free, offer access to the popular Spotify Wrapped feature.

Image | Shutter Speed

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Spotify Wrapped 2024 is now available for both free and Premium accounts. The streaming service has released its annual overview of the users’ listening stats from the past year. You can find out who your top artists, albums, and songs were, as well as your favorite music genres.

This year’s Wrapped introduces some exciting new features. You can explore your 2024 listening trends by discovering your musical phases throughout the year. Spotify will also generate a playlist with your favorite tracks, along with new favorites that relate to special moments. Additionally, you’ll see your top artist, complete with data on your longest listening streak.

Spotify collects listening data from all its apps and unifies it under your account. However, to access Spotify Wrapped 2024, you’ll need to use the mobile app. Be sure your app is updated, which you can do via Google Play for Android and the App Store for iOS.

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How to See Your Spotify Wrapped 2024

To access your annual overview of listening stats, you need to look for the Spotify Wrapped banner in the Spotify app on your phone. Alternatively, you can visit the official website: https://www.spotify.com/us/wrapped/.

Spotify Wrapped presents a slideshow similar to Instagram Stories that features your listening stats. The first slide displays the total number of minutes you spent listening to music throughout the year.

Next, you’ll learn which song you listened to the most during the year. It’ll also indicate whether you’re one of its top listeners, if applicable.

Following that, you’ll see a list of your top 5 songs of the year. In case you’re interested, each slide includes a share button so you can easily post your stats on social media.

Then, you’ll come to the slide dedicated to your musical phases. This section highlights different periods throughout the year when you gravitated toward specific genres.

Your musical phases are a significant aspect of the Wrapped experience. You’ll see several slides showcasing different phases, illustrating the months when certain genres were more prominent in your listening habits. In total, you’ll see three different phases.

In the next two slides, you’ll discover your top artists in 2024. First, you’ll see your top artist based on your listening data, followed by a list of your top 5 artists.

Finally, the last slides summarize all your listening data, which you can also share on social media. The overview graph offers various designs, so you can share the one you like best.

Additionally, Spotify generates playlists featuring your top tracks. In some countries where music videos are available (the U.S. isn’t among them), users may also get a playlist of music videos from their favorite artists. This year, you can also check out your DJ Wrapped list, where Spotify's AI DJ tells you about your most-listened to songs of the year.

Image | Heidi Fin

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Podcasts were once defined by audio. Now, they’re becoming as much about video as sound. In a surprising twist, YouTube, not Spotify or Apple, has emerged as the top platform for podcasts.

This shift. Something amazing has happened to this format. A few years ago, Google and YouTube didn’t seem to have an answer for the rise of podcasts, but they didn’t need to because people were changing how they consumed them. It was no longer enough to listen to them, people wanted to watch them.

Hello, video podcast. The transition to video podcasts was quiet and gradual. Creators began uploading their podcasts to YouTube with a straightforward approach: placing a camera in front of them to record both video and audio. The result was a format that has resonated with users and gained widespread popularity.

YouTube dominates the segment. The rise of video podcasts has propelled YouTube to a 31% share of the U.S. podcast market, outpacing Spotify at 29% and Apple at 15%, according to The Wall Street Journal.

Changing the reference. In 2020, the landscape was markedly different: Apple led with a 24% share, followed by Spotify at 20% and YouTube at 18%. Since then, YouTube’s influence has steadily grown, driven by a format that allows listeners to watch podcasters in action.

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Election-driven success. According to the Journal, video podcasts gained additional momentum during the 2024 U.S. presidential election. President-elect Donald Trump appeared on a dozen video podcasts during his campaign, generating 100 million views on YouTube, underscoring the format’s mass appeal.

Spotify shifts to video. Spotify CEO Daniel Ek, whose platform has invested heavily in podcasts, acknowledges the trend. “Everything is shifting to video,” Ek said, noting that Spotify is ramping up its video podcast offerings.

“If you said five years ago that people would want to watch people talking and sitting in front of a microphone, I’d say probably not,” Ek added.

YouTube capitalizes on the trend. This format gained traction during the pandemic as podcasters uploaded Zoom conversations to YouTube, meeting a demand for more personal and visual interactions. The platform has invested heavily in supporting video podcasts, leveraging its popularity as a go-to destination for content creators. Spotify did the same thing years ago, but YouTube’s vast reach and adaptability have helped solidify its dominance.

People are consuming more and more of everything on YouTube. This shift aligns with broader viewing habits. YouTube has become a fixture in living rooms, rivaling Netflix and other streaming platforms. Nielsen data shows that 150 million Americans watch YouTube on TV monthly, making it the most-watched platform in the U.S.

Gen Z leads the charge. Gen Z, particularly those aged 13 to 24, has embraced video podcasts. An Edison Research survey found that 84% of this demographic consumes video podcasts, drawn by the visual connection to creators. As the podcasting landscape evolves, video has transformed what was once an audio-first medium. YouTube’s rise reflects how audiences increasingly want to see the people they’re listening to—a shift that’s redefining the industry.

Image | Austin Distel (Unsplash)

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Spotify is taking a big step in its competition with YouTube. The popular audio streaming platform wants to enhance its presence in the video market. To do so, it has decided to boost the creation of new video podcasts through a partner program specifically designed for content creators.

Spotify’s Partner Program will be available starting on Jan. 2, 2025 in the U.S., United Kingdom, Australia, and Canada. According to the company, the initiative will enable creators to earn revenue based on the engagement their content receives from paying subscribers.

Spotify Is Targeting YouTube

YouTube dominates the video market, hosting millions of content creators who often monetize their work. In fact, many podcasts that were initially available only in audio format on other platforms have transitioned into video podcasts on YouTube.

For its part, Spotify is one of the most popular platforms for listening to podcasts. Most of its content is audio-only, although video versions of some of these podcasts are also available on YouTube. Spotify’s new program is expected to encourage the emergence of more video podcasts on the platform.

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Spotify claims that more than 250 million users have watched video podcasts on the platform. Additionally, nearly two-thirds of podcast listeners prefer podcasts that also include a video option. This shift marks a significant evolution for Spotify.

Despite these changes, many users still view Spotify primarily as an audio content platform. It remains to be seen how this transition will affect user perception and whether they’ll come to recognize Spotify as a platform that also focuses on video.

Moreover, Spotify has recently launched other initiatives to enhance video content. In October, the platform began rolling out music videos in select markets, although the U.S. isn’t among them. This feature allows users to enjoy songs alongside official music videos, similar to YouTube and YouTube Music.

Image | Spotify

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Meta CEO Mark Zuckerberg has a new wardrobe, a new swagger, and now, a new name: Z-Pain. That’s the moniker Zuckerberg uses in his new cover of "Get Low" with T-Pain, an acoustic version of the hit from the 2000s.

Zuckerberg unveiled the song on Wednesday in an Instagram post, explaining that it was a gift for his wife, Priscilla Chan. The billionaire said that the song was playing at the college party where he first met Chan in 2003, adding that both of them listen to it every year on their dating anniversary.

Click on the photo to view the post on Instagram.

Curiously, the pair met while they were waiting in line for the bathroom. Zuckerberg proceeded to ask Chan out on a date, telling her that they would need to go out soon because he might get kicked out of school. The rest is history: Zuckerberg would go on to found Facebook, always supported by Chan. The Meta CEO married Chan in 2012. They have three kids together.

For their 21st anniversary, Zuckerberg said he wanted to make their own version of the song, leading him to enlist the help of T-Pain.

Zuckerberg Sings to Wife Priscilla Chan With the Help of T-Pain

It’s safe to say that if you’ve followed Zuckerberg’s public profile, you would never expect to hear the man sing, especially not something like, “Til sweat drops down my balls.” Alas, if the last few years have taught us anything, it’s that the Meta CEO is far from the geeky and awkward kid in sweatshirts.

I had to cover my mouth to keep from screaming from shock in public as I wrote this. However, I can’t help but admire the gesture and give credit where it’s due. While Zuckerberg is no singer, it’s clear that he worked hard on the song for his wife, and that’s cool. T-Pain also chimes in with help on the chorus and has a featured verse in the song.

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That being said, I will never be able to look at Zuckerberg the same way again after hearing him sing about balls and panty lines. But my opinion doesn’t matter and neither does yours. The only one that matters is Chan’s, and she appears to have loved it.

“It’s so romantic,” she said after some laughs in an Instagram story posted by Zuckerberg. “21 years later I can’t get quite as low, but it brings back a lot of fond memories.”

Images | Spotify (edited) | Xataka On

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Many companies, such as Amazon and Dell, are putting strict return-to-office policies in place, while others, like Microsoft and Spotify, are taking a different approach by not requiring their employees to return to an on-site work model.

In a recent interview with the online publication Raconteur, Spotify CHRO Katarina Berg said that forcing employees to return to the office would be like treating them “like children” and emphasized the company’s dedication to remote work.

“Back to what they know.” Berg expressed understanding for the reasons behind many companies’ return-to-office policies but explained that Spotify doesn’t need to reverse its remote work model, which it introduced in 2021. “You can’t spend a lot of time hiring grown-ups and then treat them like children,” she said.

According to Berg, companies “are going back to what they know.” She added, “[Spotify is] a business that’s been digital from birth, so why shouldn’t we give our people flexibility and freedom? Work is not a place you come to, it’s something you do.”

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If productivity doesn’t drop, let them stay at home. Similar to Microsoft, Spotify associates teleworking with productivity levels. According to Berg, productivity levels haven’t been affected by the company’s remote work policy. However, she expressed concerns about work dynamics, collaboration, and innovation in a remote work context.

Instead of using lack of innovation as an argument to justify returning to the office, Spotify has initiated collaboration with the Stockholm School of Economics to conduct research on how to improve internal communication.

“It is harder and we all struggle to collaborate in a virtual environment. But does that mean that we will start forcing people to come into the office as soon as there is a trend for it? No,” Berg told Raconteur. She also said, “We know what happens when people sit down and you can actually look each other in the eye. It’s different to being on screen.”

Going back to the office for a purpose or because you want to. Spotify is embracing a distributed work model but still maintaining its offices. According to Berg, the company is considering reducing its real estate investment but is allowing employees to come to the office voluntarily. “People who work here tend to love music. We try to find things that make people want to come into the office rather than forcing them to,” Berg said. One of these things are regular “listening lounge” sessions.

The only mandatory in-person requirement at Spotify is for small teams to meet face-to-face for one week each year. “By having one week where small teams travel to meet up, we can energize people and still have a low impact on the climate. It has worked really well,” Berg said.

Remote work despite layoffs. Like many other tech companies, Spotify has also reduced its headcount in the last few months. In 2023, the company carried out three rounds of layoffs, with the final round impacting 17% of its workforce. However, Spotify has chosen to maintain its commitment to telecommuting due to factors such as talent retention.

“It wasn’t pleasant to do but it was a business decision. We wanted to mature and we need to become a great business as well as a great product. We had to say goodbye to people that had done really well for us,” Berg told the outlet.

Image | Alpha Photo

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On Tuesday, Spotify CEO Daniel Ek confirmed the long-rumored launch of a Deluxe plan for the streaming service. This plan will offer high-fidelity audio and other premium features.

However, this move isn’t just a one-time event.

Why this matters. The significance of this move lies in the growing trend among technology companies to offer ultra-premium versions of their products and services to cater to their most demanding users, who are willing to pay more.

Some context:

• Spotify announced its HiFi service over two years ago, but its development has been slow.
• Ek has confirmed that the company is working on a Deluxe version, which will cost about $5 more than the current premium subscription.
• This strategy is similar to what other tech companies are doing in their respective markets.

The “ultra-premium” trend follows this pattern:

1. A company launches a basic product or service.
2. Then, it splits its offering into two: a free or cheaper version alongside a paid or more expensive version.
3. It eventually introduces an ultra-premium version that’s better and more expensive in order to monetize the most enthusiastic users.

Some examples. The Apple Watch originally had basic (aluminum) and premium (steel and other materials) versions. In 2022, Apple introduced the Ultra model, which was more expensive than the previous premium version. Besides being geared to people with active lifestyles that practice sports, it aimed to provide a significant improvement in quality for the product’s fan base.

Initially, the tech giant offered the iPhone as a single annual model. Subsequently, it introduced the Plus, Pro, and Pro Max versions. In the broader phone market, there’s a noticeable increase in prices and a growing acceptance of them.

Recently, Microsoft raised the price of Game Pass to establish a new, more affordable version as the standard offering. This move also reflects the trend towards more segmentation and a stronger appeal to the most enthusiastic users.

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Business logic. In 2023, Apple CEO Tim Cook confirmed the use of this strategy, anticipating the future launch of an even more expensive iPhone than the Pro Max. “I think people are willing to really stretch to get the best they can afford in that category,” he said. If a company sees an opportunity to raise prices or offer more expensive versions that will continue to be popular, it should do so.

This strategy can be likened to an economic cocktail:

• Base: the standard product, accessible to most or all users.
• Body: the premium version, targeting those looking for something more.

Cherry on top: the ultra-premium option, designed for true enthusiasts or those in a privileged financial position.

Why it works. The strategy segments the market and enables catering to different levels of purchasing power and enthusiasm for the product. In other words, the most loyal customers are willing to pay more.

This approach not only increases revenue but also enhances the company’s brand image, reinforcing perceptions of quality and exclusivity.

The challenge is to balance exclusivity with inclusivity, offering additional benefits to loyal fans without alienating the broader user base, many of whom may not view these changes favorably.

The launch of Spotify Deluxe exemplifies how tech companies are redefining premium services. In a highly competitive market, the message is clear: If you’re willing to pay more, you’ll get more.

Image | Fábio Alves

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