Why Spotify feels so different now
Have you ever wondered why Spotify feels so different now? Between a cluttered home screen, a Wrapped that felt off, rising prices, and an app increasingly shaped by podcasts, AI features, and background listening, the vibe has shifted. This post unpacks how profit pressures, royalty math and bundling, cost-cutting (and alleged “ghost artists”), plus layoffs and leadership changes have reshaped the platform—what that means for artists, discovery, and the 670 million people who press play every day.
The Feeling: Wrapped, Profitability, and a Changing App
So last December, when should have been a time for me to show the world how much I love doing. Leaping through I spy my right felt a little bit different. It didn’t feel personable. It felt cluttered with I. And I know everyone says this, but My top artist has felt completely off I also wasn’t alone. People took to social media to voice their discontent through the latest edition of Spotify Rap.
I didn’t think too much about it until this past February, when I saw that Spotify announced its first full year of profitability, which is crazy because the company has been around for 18 years as one of the top three music streaming platforms in America. How did it take Spotify so long to become profitable? And was this connected to the most mediocre Spotify Wrapped? And if so, what does this mean for the future of Spotify for its 670 million users?
the homepage when you first open the app is super cluttered. it kind of takes away from what I originally started using Spotify for. for artist Yeah, a million ways to make money and Spotify is not like at the top of that list. and for the company itself, right now, the sort of character witness of, of Spotify shows a very cold and apathetic, view towards the artists that they host. I do think that we are approaching some kind of showdown and reckoning. I do think they can achieve their goals. I think that it’s just to that end, they’re going to find themselves in trouble.
Looking Back: Spotify’s Origin and Early Mission
so before we get into what Spotify’s future could look like, it’s important to first understand Spotify’s past. by looking at Spotify’s original business model. We can learn a lot about why it took the company so long to make money, despite its founder saying he hoped to be profitable by 2009. So in this 12 months, you will make a profit. And that’s that’s what you’re projecting. Yeah. I mean, it’s you know, impossible to say in these market conditions, but, we definitely think that we can be profitable within the next 12 months, this is Daniel Ek, he and another Swedish guy, Martin Lawrence, and set out to change the music industry.
When they founded Spotify, Spotify’s original mission was to offer a file sharing service that was convenient and legal, and tapped into the social discoverability aspect of music. Without services like Spotify that have a free tier of service. There’s actually no way to create, social discovery of music And of course, the two founders plan to monetize that service using their advertising and marketing backgrounds. They knew ads would bring in money, but they had no idea what would drive people to the platform. At first, music was just a way to get traffic for their ad based business, But over time, they fully leaned into music. They teamed up with the major labels and built the freemium model we know today. Free with ads or pay to subscribe.
Building the Audience: Curation, Playlists, and Wrapped
When Spotify started, I think there was a lot of doubt or maybe just not a lot of foresight into just how big and how disruptive it could wind up being.
Spotify’s goal was to build an actual listening audience, unlike its competitors that came later, like Apple Music or Prime Music, which use music streaming as a loss leader to sell iPhones or cat-foot tissue holders.
Spotify achieved that goal by:
- Pioneering the subscription-based model that revolutionized the music industry
- Attracting listeners by offering over 20 million songs on its platform
- Ultimately becoming what Wall Street would call a tech unicorn, despite the company still not being profitable
Expanding Audience and Discovery Features
For the next five years, Spotify continued to be bullish on building out its audience, like when it:
- Acquired The Echo Nest, a music discovery startup back in 2013,
- Which allowed Spotify to offer personally curated playlists based on listeners’ mood and activity
This marked the start of Spotify’s peak era.
The 2015 launch of Discover Weekly alone garnered over 1.7 billion streams in its first five months.
I think that they found there was a lot of value in their curation and their social aspects —
Being able to create playlists and share them with your friends,
Having algorithms show you new music and be a discovery engine.
The Rise of Playlists and Wrapped
After acquiring data startup Echo Nest, Spotify strengthened its playlist strategy by offering playlists curated by both humans and AI algorithms, which led to one of the greatest campaigns in history — Spotify Wrapped.
Spotify Wrapped is one of the greatest things about Spotify. It makes listening to music so much fun.
My top artist was, of course — my God, this is a top artist — I space Megan Thee Stallion.
It was huge for Spotify, and by the end of 2017, Spotify had:
- Over 150 million monthly active users
- 71 million premium subscribers
- An almost 50% increase from the prior year
- 40% control of the global music streaming market
So Spotify’s efforts were clearly paying off.
IPO and the New Era
Spotify debuts today on the New York Stock Exchange.
It has never made money, but could have an initial value of around billions.
Though not paying off in the literal sense, after Spotify’s IPO in 2018, the company entered a new era.
Now that they are a public company, and their only business is streaming, they have a lot of pressure to grow those numbers.
Here’s the key point:
It took Spotify 18 years to become profitable because it has an expense problem.
For every $1 Spotify makes in revenue, it pays about $0.70 back out to music owners.
Costs, Competition, and Royalties
Even though Spotify was making waves building out a growing platform, everyone wanted a piece of the Spotify pie.
- Artists were putting out 100,000 songs a day — quite a lot of music daily.
- By 2018, Spotify had paid out over $9 billion in royalties,
- A massive overhead that ate into its margins, one that its competitors don’t have to worry about.
You see, Apple and Amazon have their streaming services,
but they rely on other parts of their businesses to bring in greater profit margins.
But for a company like Spotify, where music streaming is the core business, royalty costs matter.
The App Store Battle
Spotify has also claimed it’s at a disadvantage because:
- Its app must be downloaded through the Apple App Store for iPhone users
- Apple takes a 30% cut on in-app purchases, eating into Spotify’s revenue
- Spotify isn’t allowed to tell users in the app that they can get a cheaper deal on Spotify’s website
So as Spotify’s costs continued to pile up, it needed a change.
Ultimately, it would require some savvy to make sure Spotify had enough subscribers to offset the expenses.
New Moves: Podcasts, Passive Listeners, and Cost Cutting
To do that, Spotify had to hit three key objectives in order to become profitable.
1️⃣ Expanding Revenue Streams
The first move was to bring in new revenue streams.
Daniel Ek really supported the idea of expanding Spotify beyond music, which led to the introduction of podcasts on Spotify.
- In February 2019, Spotify announced plans to spend between $400 and $500 million on the emerging podcast marketplace.
- It acquired podcast network Gimlet, and podcast hosting platform Anchor FM.
- It also spent millions on exclusive rights to podcast shows and networks.
Daniel said that year that his goal was to be the world’s number one audio platform.
Of the total user base, 21% were listening to podcasts, and at the same time, the number of Spotify Premium memberships grew to over 138 million, a step in the right direction.
2️⃣ Business Strategy Shift
The music side also changed as Spotify started making the shift in its business strategy.
When I first started making this video, Spotify felt, looked, and sounded different — but it was hard to pinpoint exactly what had changed until I read this book.
A guess into how Spotify’s algorithm-driven playlists can really impact music discovery and independent artists.
One of the three lines is the various ways in which streaming services like Spotify use different cost-saving programs in order to protect their bottom lines.
Liz also writes in her book that as Spotify went public, it realized that its greatest asset wasn’t music listeners — it was passive listeners.
The music business has sort of championed this idea of building back the passive listener, which is a phrase the music industry uses to refer to:
- Music for sleeping
- Music for studying
- Music for certain activities, moods, and vibes
Playlists and Listener Behavior
Music playlists became less and less focused on meaningful music discovery, and became more geared towards playlists made for convenience, which is paradoxical to early Spotify when it was all about discoverability.
I think that streaming services are really concerned with retaining subscribers.
Reducing the risk that someone cancels their subscription means providing a product that seems useful in their life.
The way Spotify describes their product to advertisers:
“Take a look at the Morning Brew office — here’s what they’re listening to while they work to content form.”
Even people who are listening to actual music — i.e., music with lyrics made by actual artists — are only half-listening as they go about their day.
3️⃣ Cost Cutting & Ghost Artists
And if you were at the head of Spotify’s executive table, you might think:
“Why pay expensive royalties if we don’t have to?”
And that was Spotify’s second objective — cost cutting.
Ghost artists started becoming one of the biggest issues with this ongoing practice of filling playlists with low-royalty music.
This is material that’s ending up on popular playlists and being served to users without being disclosed or labeled in any way.
- Around 2016, Music Business Worldwide first reported that Spotify was filling playlists for studying, sleeping, winding down, etc., with stock music from fake artists that didn’t exist.
- Filling these playlists with low-cost, ghost artist music lowered Spotify’s overhead costs.
Spotify, of course, denied these claims.
A Spotify rep said that:
“Music on Spotify, including functional music and noise like this, is created, owned, and uploaded by licensed third parties, many from established music companies run by professionals.”
4️⃣ AI Integration
And alongside these moves, Spotify did what every other tech company was doing — AI. AI. AI.
Spotify rolled out new AI-centered initiatives, including:
- AI DJ, which has seen engagement double over the past year (according to a Spotify spokesperson).
- AI Playlist, which lets music fans use prompts to describe the playlists they want.
All in an effort to improve user experience, retain users, and attract new ones.
But then, Spotify’s AI went too far — and messed with everyone’s Spotify Wrapped.
Spotify Wrapped Backlash
“Why was Spotify Wrapped this year actually just horrible?”
It’s like they’re pushing features we don’t necessarily want and focusing too much on AI.
Nothing really stood out compared to previous years.
It included this weird, personalized podcast generated by Google’s Notebook LM, with generic images and design to describe listening habits — and, of course, people voiced their discontent.
“Spotify, I said hurry up with Wrapped, not wrap it up in a mess.”
“Why is it giving ‘I had a school project due Monday and forgot until Sunday at 11 p.m.’?”
“There’s no way this data is correct. They must’ve used AI or something!”
It feels like the Spotify Wrapped outcry is symbolic of public perception of Spotify in recent years —
and with layoffs, two price hikes in the last two years, you’re left wondering:
“What is Spotify actually prioritizing?”
Bundling, Royalties, and Legal Pushback
the cost of the perfect playlist I think would have a lot more to do with the way in which the royalty model, has changed to the way musicians are always being squeezed. Last March, Spotify began paying music publishers and songwriters a discounted royalty rate for streams by increasing its subscription fees. the new premium tier. It gives subscribers access and not just add free music, but also audiobooks and podcasts. that are kind of putting in front of you that aren’t music, which feels like it kind of takes away from what I originally started using Spotify for.
This is a move that Spotify borrowed from its competitors. Playbooks you see up on Amazon were taking advantage of this thing called bundling, which, like the name implies, gives companies discounted rates on music royalties if they group services with other things like podcasts and e-books. Publishers got a royalty cut from subscription fees, but if the subscription isn’t solely music, the cut becomes a lot less because now there are a lot of different sources for the subscription revenue. This was met with pushback. Spotify, after all, started as a music first platform, and mechanical licensing collective, filed a lawsuit against Spotify’s use of the bundling strategy. Which was quickly squashed in court. And since no one has been able to put a stop to this, Spotify can be paying artists roughly 150 million less over the next year, according to Billboard.
Artists React: Exposure, Earnings, and Algorithms
I spoke with these three musicians and composers and asked them how Spotify’s new changes affect them.
My name is India Teria, Caleb Moore, Kurt.
I am a music producer, musician. I have a couple aliases. The main one is called Kurt Stewart.
I’ve done pretty well on Spotify, on like a numbers basis, but it doesn’t always translate to financial success.
What’s the reason for the aliases?
- Part of it is that it enables you to release more music,
- Which I think also is like part of what the industry has turned into — that is, I think, overall net negative,
- Like the nature of streaming platforms in general — it’s kind of quantity over quality.
Exposure and Playlists
With all its new features, Spotify has reshaped the music landscape.
The bespoke playlists curated on Spotify were intentional and played a huge role in introducing listeners to new and emerging artists — which India can attest to.
I feel like in terms of exposure and growth as an artist, landing my first editorial playlist, I can genuinely say changed the trajectory of my career.
I woke up one morning and on the Spotify for Artists app, it tells you how many people are listening at a time — and it said like 500+ people were listening.
And I was like, “What’s happening? Is this a glitch?”
Pretty shortly after that, I started making it onto other playlists, and people started reaching out to me.
That’s how I found my first manager situation and started getting a lot more opportunities.
Algorithms and Human Curation
I’ve had positive experiences with playlists that were curated clearly by a human.
I’ve discovered a lot of music from Spotify’s algorithm — by just recommending songs based on a playlist that I’ve made or whatever.
This is what Doug Ford, the Spotify executive who oversaw editorial playlist creation from 2013 to 2018, has to say about Spotify’s current playlist strategy:
I think that for me personally as an artist, because the niche that I work in is like instrumental music, it would be awesome if Spotify wasn’t clogging their playlists with presumably “fake” artists.
Challenges for Independent Artists
But these changes are even more impactful to artists who use these playlists as vessels to jumpstart their careers.
It’s definitely difficult to grow significantly right now as an independent artist.
There is opportunity for growth — getting on a playlist is extremely important.
I want to say that, especially for an independent or starting-out artist, it’s more important now.
Spotify has, of course, gone out and denied this takeover.
But as someone who’s been using Spotify since 2013, I know there’s a difference in what’s being served to me.
The rep I spoke with said that they’ve redefined how they interpret signals such as skips, replays, and saves — which should create a better listening experience.
Listener Shifts and Changing Habits
But for some users, they’ve started going elsewhere.
I feel like the discovery algorithm on Spotify — everything starts kind of sounding the same.
I’ve heard it called “Spotify Core,” where it all just starts blending together.
And it’s not as interesting to me because I kind of want to go searching for something I haven’t heard before — a new sound.
So what happens when what you originally signed up for doesn’t feel the same anymore?
I used to be kind of exclusive to Spotify. But as time went on, I started checking out other platforms, trying them out, and seeing what felt good.
I don’t think there’s any major benefit that Spotify has given me for a Premium subscriber that I don’t get from paying for Apple Music.
And for artists:
I did learn at a certain point not to really put that many eggs in the Spotify basket.
I mean, it’s easy enough to release your music on there, so I do put all my music on there — but it’s not what I rely on financially.
Which I would say is worrisome for a platform like Spotify, when it relies heavily on artists to fill its content library.
Power Shifts: Labor Movements, Payouts, and Competition
An important development in recent years, I do think, has been the emergence of a new music labor movement:
- United Musicians and Allied Workers
- Music Workers Alliance
- Other musicians’ organizations giving artists more of a collective voice to take on these issues.
In Spotify’s annual Loud and Clear report released back in March:
- The company stated it paid out over $10 billion to the music industry in 2020,
- Which is true, but not directly what goes to music artists.
Artists’ Earnings Reality
Have you made any money off Spotify streams?
Does $250 count as making any money?
If you saw my profile, you’d think there’s good money there, but in reality:
- Even though I had a song montage with close to a million streams,
- It never came anywhere close to letting me quit my restaurant job or anything like that.
Royalty Comparison & Competition
With other platforms offering higher royalty payments, Spotify’s ability to draw artists’ focus to its platform can weaken.
- “I probably have about twice as many streams on Apple than on Spotify,
but I’ve probably made about eight times more money on Apple as well.” - TikTok has also dethroned Spotify as a leader in music discoverability.
The Bigger Picture: Payments & Expectations
To be fair to Spotify, it’s easier said than done to find a solution that makes everyone happy.
- Many regular people outside the industry say,
“Oh, well, Spotify doesn’t pay artists very well.” - And I’m like, “Okay, so do you want your subscription to be $40 a month?”
- Then they’re like, “No!” — as if those two things aren’t related.
I think it’s good to have a bigger pool to spread,
not that it’s even making that big of a difference anyway —
because major labels are controlling most of the streaming revenue anyways.
What’s Next: Profit, Prices, and Identity
After completing its first full year of profitability, Spotify recently hit a small setback:
- The company posted a net loss of $100 million in its most recent earnings report.
- This led to a drop in its stock price.
- In response, Spotify announced a price hike for its Premium subscription in several markets outside the U.S.
- The move helped the stock price recover shortly after.
However, as Spotify navigates what’s best for business, it’s also facing something deeper — an identity crisis.
Leadership Changes
Just as this update was being finalized, Spotify made a major announcement:
- Daniel Ek will be stepping down as CEO at the end of the year.
- He’ll be replaced by the company’s two long-time co-presidents, Alex and Gustav, who already handle much of the day-to-day management and strategic direction.
- The change mainly formalizes their roles rather than introducing a new direction.
Some might say Daniel Ek just didn’t want the extra pressure — but that’s up for debate.
The Bigger Question: Spotify’s Direction
Music is vast, and everyone has different reasons for creating or listening to it.
- One of the major issues in the streaming era is the “one-size-fits-all” model that tries to serve all artists and listeners the same way.
- Moving forward, Spotify might need to explore fairer alternatives that can benefit both sides — musicians and audiences alike.
A Spotify representative confirmed that:
- Music remains central to the company’s core strategy.
- However, Spotify is also evolving into a multi-format platform, expanding beyond just music.
Strengths and Competition
Spotify still excels at certain things:
- It’s a go-to place every Friday to check new releases.
- It often helps users discover music they didn’t know existed.
Yet, competition is heating up:
- Other streaming platforms are improving, offering better or more innovative experiences.
- Despite this, most users stick with Spotify due to habit, affordability, and the social factor — it’s simply what most friends use.
Looking Ahead
It’s uncertain whether Spotify will:
- Return to its roots to reconnect with artists and long-time users, or
- Continue evolving into something broader.
But one thing is clear — Spotify must face these challenges head-on if it doesn’t want to lose the core audience it worked so hard to build.
I’m martably passionate music enthusiast and researcher behind all the content you find here at spotifyapk.
As the site’s owner and publisher, my mission is simple: to provide clear, informative, and useful guides on the ever-evolving world of digital music platforms. Follow the journey and connect on Instagram: @martably! This site is dedicated to informational purposes, fueled purely by a love for music.
