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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.<\/span><\/p>\n Spotify and Universal Music Group struck a licensing deal allowing listeners to create AI-generated covers and remixes of songs from participating artists, as the streaming company seeks to unlock new growth beyond traditional music subscriptions.<\/p>\n The tool would be a paid add-on within Spotify\u2019s app for subscribers and was framed as a way for artists and songwriters to make more money in royalties. Spotify said it expected revenue to grow at a \u201cmid-teens\u201d annual rate with gross profit margins between 35 and 40 per cent through 2030. Shares were up 16 per cent on Thursday. <\/p>\n \u201cWhat we\u2019re building is grounded in consent, credit and compensation for the artists and songwriters that take part,\u201d said Spotify\u2019s co-chief executive Alex Norstr\u00f6m. <\/p>\n Universal Music\u2019s chief executive Lucian Grainge said the AI product was \u201cfirmly artist-centric, rooted in responsible AI and will drive growth for the entire ecosystem\u201d. <\/p>\n Artificial intelligence has become one of the music industry\u2019s most contentious issues, with artists raising concerns about copyright, consent and whether AI-generated music could dilute the value of human-made work. <\/p>\n Jack Antonoff, who is signed to Universal Music\u2019s publishing arm and frequently co-writes with Taylor Swift, Spotify\u2019s most-streamed artist, last week denounced what he called the \u201cnew ways you can fake making art\u201d. <\/p>\n The deal came as Spotify, the leading music streaming service, laid out plans for a range of products aimed at its most dedicated users, marking the company\u2019s clearest attempt yet to build a higher-spending \u201csuperfan\u201d business beyond music streaming.<\/p>\n The push includes AI-generated \u201cpersonal podcasts\u201d, premium fan subscriptions, exclusive concert ticket access and pricier audiobook add-ons, all aimed at turning Spotify\u2019s most passionate users into bigger spenders.<\/p>\n In its first investor day in four years, Spotify executives said the company\u2019s next phase of growth will come less from adding casual listeners and more from convincing its biggest fans to pay more for what it called \u201chigher-ARPU experiences\u201d, referencing a metric for average revenue per user. <\/strong><\/p>\n \u201cThere is no such thing as an \u2018average user\u2019,\u201d the company said. \u201cOur biggest monetisation opportunities increasingly come from our most engaged audiences.\u201d<\/p>\n Spotify announced \u201cReserved\u201d, a feature giving top listeners early access to concert tickets, alongside new tools allowing artists and podcasters to sell subscriptions directly to fans on the platform. It also unveiled new audiobook add-on tiers aimed at heavier listeners.<\/p>\n The \u201cPersonal Podcasts\u201d allow users to generate customised audio content by entering prompts into Spotify. Another product, called \u201cStudio by Spotify Labs\u201d, is a desktop app designed to create more personalised audio experiences by drawing on listening habits and, with permission, information from calendars, inboxes and notes.<\/p>\n Spotify described the announcements as part of a broader shift towards what it called the \u201cera of Generation\u201d, in which media experiences are \u201cdynamically shaped around each user\u2019s taste, context and intent in real time\u201d.\u00a0<\/p>\n Recommended<\/p>\n A lot has changed since Spotify\u2019s last investor day.<\/p>\n The music streaming company cut about a quarter of its workforce, raised prices across the world and achieved sustained profitability for the first time in its history.\u00a0<\/p>\n At the start of this year, co-founder Daniel Ek stepped down as chief executive, ending a two-decade run at the helm of the company he created. He handed control to longtime lieutenants Norstr\u00f6m and Gustav S\u00f6derstr\u00f6m, two Swedish executives he had spent years grooming as successors.<\/p>\n Spotify is no longer viewed as a scrappy start-up fighting to prove its business model. Investors increasingly see that phase as complete. Instead, attention has shifted to what comes next.<\/p>\n Spotify\u2019s gross profit margins have climbed from roughly 25 per cent in 2023 to 33 per cent in the first quarter of 2026, helping establish credibility with investors after years of scepticism over whether music streaming economics could improve.<\/p>\n But despite the operational progress, Spotify shares have fallen nearly 40 per cent over the past year, lagging far behind the broader S&P 500 index, which has gained more than 20 per cent over the same period. Investors are looking for a new catalyst for growth.<\/p>\n","protected":false},"excerpt":{"rendered":" Unlock the Editor\u2019s Digest for free Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter. Spotify and Universal Music Group struck a licensing deal allowing listeners to create AI-generated covers and remixes of songs from participating artists, as the streaming company seeks to unlock new growth beyond traditional music subscriptions.<\/p>\n","protected":false},"author":1,"featured_media":49632,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[49],"tags":[2358,24571,686,5647,24572,1415],"class_list":{"0":"post-49631","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-aigenerated","9":"tag-highspending","10":"tag-music","11":"tag-spotify","12":"tag-superfans","13":"tag-targets"},"_links":{"self":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts\/49631","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=49631"}],"version-history":[{"count":0,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts\/49631\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/media\/49632"}],"wp:attachment":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=49631"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=49631"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=49631"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}