Spotify Hits Half A Billion Users, But Won't Answer The Billion-Dollar AI Question

Music streaming giant Spotify has reached a new milestone of commanding a userbase as strong as half a billion. In its latest earnings report, the Stockholm-based company announced that it now has roughly 515 million monthly active users tuning in to enjoy songs, podcasts, and curated audio shows. On a yearly basis, that's a 22% growth in terms of monthly active user count. Notably, 210 million of those listeners are paid customers, paying north of $9.99 each month.

Spotify says the bracket of paid customers grew by 15% compared to the same quarter in 2022, which also drove up the net revenue by 14% and propelled it to the $3.39 billion ballpark. Spotify is expecting its userbase to reach the 530 million mark in the next quarter, while also hoping to add around 7 million paid listeners. For comparison, Apple Music has less than 100 million users. Last year, Spotify outlined an ambitious plan to reach one billion users by 2030.

While Spotify beat its own growth estimates in Q1 2023, CEO Daniel Ek avoided answering questions about the biggest shift happening in the entertainment industry — AI. When asked about the steps that Spotify is taking to protect the interests of artists and musicians, Ek gave a boilerplate response, noting that the company is in constant dialogue about the rise of AI with industry stakeholders.

Earlier this month, AI tracks mimicking top-tier stars like Drake and The Weeknd hit Spotify and Apple Music, generating waves throughout the industry. Universal Music Group didn't seem too happy about it, and asked Spotify and Apple Music to pull the contentious, AI-generated material. Canadian musician Grimes has announced that every person is free to generate songs copying her voice using AI, and that she will do a 50-50 split of the royalties from such content.

Spotify chief Ek didn't touch any aspect of the AI wave directly. He claimed that the company takes its role of supporting artists and creators "very, very seriously," without outlining any concrete steps or policies to do so. "These are very complex issues that don't have a straight answer on how you take the position depending on what would happen."

However, it looks like Spotify — just like its music streaming rivals, as well as records — is still undecided on what route to take regarding embracing or policing AI-generated tracks, which walk the fine line between copyright violation and creative expression. "We want to strike a balance between innovation and protecting artists," Ek concluded.