Spotify's tryst with technology

Richard Frankel is Spotify’s global creative director and he insists he works at a technology company, and not an audio streaming app.

He was in Mumbai, right as Spotify India celebrated its fourth anniversary, to talk about Sonic Science 2.0. — research whose findings show how audio affects listeners physically and strengthens their ability to recall memories.

A major find of the study, created in partnership with biometrics research company MindProber and Josh McDermott, PhD, who leads the Laboratory for Computational Audition at MIT, showed that 93% of the brain’s engagement with the content transferred directly into ad engagement and as a result, the ads saw 19% higher Brand Impact on Spotify compared to all other media.

This report is not the only technology-related activity Spotify is up to these days. There is an AI DJ in the beta stages (The DJ is a personalized AI guide that knows you and your music taste so well that it can choose what to play for you), and NFT-enabled playlists; they once again accentuate Frankel’s statement on working for a technology company.

What is interesting is that none of the offerings, regardless of their development stage, has touched the Indian market despite India’s major contribution to the audio streaming app’s global performance.

“We prioritise needs based in that market...,” states Arjun Kolady, head of sales, Spotify India. “You may see us testing 20 different experiments in 20 different countries and as they succeed or fail, we learn from them and then they are rolled out,” he adds.

“Or not” jumps in Frankel who states that even “if we're testing it, it doesn't mean we're committed to doing it.” The global creative director makes it clear that Spotify does not use the tools under tech company OpenAI such as ChatGPT.

“AI on Spotify has more to do with better capturing the best experiences... the test we're doing with AI DJ is built around having better conversations with every listener,” he explains.

And while Spotify will lean on AI to engage better with listeners, not every user feels the same about the app. Some use it every day, some use it from time to time, while many have only started using it. Creating communication campaigns on a global scale is a challenging task.

“We have a brand voice which shows up irrespective of how mature the market is,” states Frankel and adds that the brand understands how it wants to be understood, and then it's just a matter of calibrating the specific message to be relevant for the moment of growth in the given market.

“While we're more focused on explaining how we are here (India), in a market like the UK where we're very well known, we're more likely to talk about the things we are doing in culture or with an artist,” remarks Frankel.

Advertisers, as per Kolady, come to Spotify because “we have a premium brand safe deeply engaging platform that's skewed heavily towards the Gen Z.”

Are the advertisers playing the niche or the mass game? Says the head of sales, “If it’s Unilever, Pepsi, Coca-Cola, They want to be able to penetrate the audience on the platform, and want to scale.”

He also explains that if it is a D2C brand or a startup, or something very specific like Mercedes Benz, they're looking at a specific audience. “Because of our streaming intelligence, we're able to identify the right users for that brand in the right moment.”

Spotify recently partnered with a British low-cost carrier EasyJet where fliers’ music listening history was used to suggest to them their next travel locations. Frankel reveals Spotify receives many such international briefs from clients like Coca-Cola and Heineken.

Back in India, Kolady reveals how for Cadbury Dairy Milk Silk, Spotify created a unique data and API-driven experience in which during the first iteration, users could hide a secret message in a playlist and send it to someone. The second was around putting voice notes in curated playlists.

The Sonic 2.0 study also reveals even when they’re streaming sad music, listeners get a mood boost when they tune into Spotify.

Happy or sad, it is not surprising that at the start of February 2023, the app revealed it beat the industry estimates for both active users and subscribers reaching a total number of 489 million listeners towards the end of Q4; a rise of 14 per cent in premium subscribers, taking the number to 205 million. The industry estimates ranged roughly around 202.3 million.