05 DANIEL EK

CO-FOUNDER/CEO SPOTIFY

Spotify’s 2023 was defined by both a fundamental change to the streaming platform’s economic model and significant layoffs that, along with a $1 increase in premium individual plans across several regions, returned the company to profitability for the first time in more than a year. All the while, Spotify showed serious growth in monthly active users and active subscribers. The former were up 26% year over year, to 574 million in the third quarter; the latter up 16% year over year, to 226 million, according to the company’s third-quarter earnings report.

Amid industrywide debate over streaming economics and fair compensation for artists, Spotify announced three modifications to operations in November: a streaming threshold that music tracks must reach to qualify for royalties; penalties for proscribed levels of fraudulent activity; and a minimum track length for nonmusic noise uploads to earn revenue. When announcing this news, the company said that the changes will enable it to drive approximately “an additional $1 billion in revenue toward emerging and professional artists over the next five years.”

The first round of staff cuts, which affected 6% of Spotify’s workforce, came in January. “In a challenging economic environment, efficiency takes on greater importance,” Ek wrote at the time. A second round in

June, which focused on the podcast division, cut another 2%, and a third in December laid off 17% of employees, totaling nearly 1,500 people. “We still have too many people dedicated to supporting work and even doing work around the work rather than contributing to opportunities with real impact,” Ek wrote. “We have to become relentlessly resourceful.”