Featured image: Thibault Penin on Unsplash
Spotify’s future in direct ticketing is in serious doubt after the music-streaming and podcast platform stripped back its dedicated team in the space in its latest round of redundancies.
The Stockholm-based business announced in December that it was slashing its workforce by approximately 17%, with more than 1,500 employees affected.
TheTicketingBusiness.com, which reached out to several individuals affected by the latest cuts, understands that most of the staff members responsible for Spotify’s presence in the direct ticketing space were made redundant.
According to one former employee, Spotify has indicated to remaining engineers at the company that it will seek to revitalise its attempts to gain a foothold in the space before the end of 2024. However, given the apparent failure of its initial venture, it remains to be seen whether such goals are more likely to be fulfilled through the M&A route.
The company started testing the waters with direct ticketing in August 2022, mostly with pre-sales and events featuring lesser-known artists, via the Spotify app and the new Spotify Tickets website.
Speaking about the venture a month later, Spotify chief financial officer Paul Vogel said that artists had been “thrilled with the pre-sales that we’ve had and our ability to target and sell tickets to their super fans and get that audience engaged.” He added: “What we’ve also seen is when people buy tickets through Spotify, they actually then tend to listen to more of that artist on Spotify as well.”
However, by late 2023, efforts to expand the initiative were grinding to a halt, with some having raised concerns about the effectiveness of the technology supporting direct ticketing.
Multiple email-based requests submitted to Spotify for clarification on the latest developments by TheTicketingBusiness.com went unanswered.
The latest round of redundancies comes after 600 jobs were axed at the start of 2023 and 200 roles were cut from the company’s podcast division in June. Before that, Spotify had nearly doubled its workforce in the space of three years.
In a memo to staff regarding the latest redundancies in December, Spotify chief executive Daniel Ek defended the previous drive for expansion but acknowledged “we now find ourselves in a very different environment”.
Spotify’s total revenue grew 11% year-on-year in the third quarter of 2023 to €3.4bn (£2.9bn/$3.7bn), generating an operating income of €32m (£27m/$35m). In the first nine months of last year, the platform added 85 million users, including 21 million paying subscribers.
Spotify has long been hamstrung in its efforts to turn a profit consistently due to high costs. According to the Financial Times, for every dollar Spotify generates in streaming sales, it pays about 70 cents back to the music’s rights-holders.
According to financial analysts at Macquarie, the latest cuts will reduce costs by €300m (£258m/$328m) this year.
Share this