Spotify Founder and CEO Daniel Ek's Investor Day 2022 Remarks

Good morning and welcome everyone to Spotify's 2022 Investor Day. I am Daniel Ek. And thank you all for joining in person and for those of you joining through our webcast.

We are excited to be here with you. And today, you will hear from me and a few members of our team about their own observations on the big bets we are making. And we will cover our progress, our investments and dig into how we evaluate success and how I believe that you should think about our business as investors.

I also want to talk about why I believe our future is a lot bigger, and even a lot more interesting than what you might have heard of previously.

Spotify went public in 2018 and four years into that journey, we have netted some notable accomplishments and we all know that we've weathered our share of challenges, but we've also morphed pretty dramatically as a business and I'm not sure that journey is fully understood. And frankly, we probably haven't done a very good job of explaining it.

So as you assess our progress, let me start with what I am sure some of you are thinking. You think that Spotify is a great product with a great experience.

But some may also think that we're a bad business or at least a business with bad margins for the foreseeable future. And others may even think that the audio market is limited and perhaps not that significant. So today we are going to say the quiet part out loud and directly address these assumptions.

To start, I believe we have a great product and importantly, our business is doing really well. But what's even more, we're really investing in building a fantastic, multi-sided platform that has all the ingredients to become one of the truly unique creative platforms in the world. And based on what we see, we are accelerating our moves to seize that opportunity in the near term. And the value creation opportunity is very high.

But nothing inspires confidence like a proven record of success-and success that can be effectively replicated over and over again with better and better results over time. So let's take a quick look back at what we said we would do, and what we achieved.

So at our last investor meeting, we spoke about three core foundations that we believed would differentiate Spotify in the market-Ubiquity, Personalization and Freemium.

These are still the same foundations that drive our business today.

So let's start with Ubiquity:

We shared this concept of ubiquity back in 2018-making Spotify available to anyone on any device. And back then, it was something that no one else was really embracing. At that time, we had about 250 partners.

But today, Spotify has more than 2,000 partners-with integrations spanning from wearables like watches to all facets of the connected life-including cars and even kitchen appliances. And this idea of creating a truly frictionless experience for users was really as much about engagement as it was about convenience.

Today, what's also different is that listeners not only have access to all the world's music, but also have access to more than more than 4 million podcasts and an increasing number of audiobooks. And just like in music, thanks to our early investments in ubiquity, users can listen anywhere and everywhere.

This is something our competitors haven't prioritized because they don't have the same approach. This is a key point of differentiation for Spotify.

Ubiquity has also proven to be a significant driver of new users to the platform, with 28% of all of our new registrations coming from these 2,000 partners. And that's up from 14% in 2018.

People who use Spotify on more than one device represent some of our most engaged users, with lower churn and higher lifetime value, and that's a metric we'll spend more time on a bit later. Today, 89% of Spotify Premium subscribers use Spotify on multiple devices, up from 75% when we last spoke to you.

And further, this experience of innovating across different types of hardware with just about every player in the market makes us really well positioned for whatever comes next. And the more deeply that Spotify aligns with multiple devices, the more we also understand the listener, which leads us to our next foundation. Personalization.

So when you ask our listeners what they most admire about Spotify, more than 81% cite our personalization, and this is what we call discoverability.

Spotify listeners view this as the reason not only to sign up for the service, but also the reason to stay. And they repeatedly tell us that we are a service that just gets them.

And over time, our ability to find the right content for the right listener has improved significantly - and we are driving more discovery than ever before.

For further proof of the power of discoverability, just look at the success of our annual campaign - Spotify Wrapped. So for the last seven years, we've created a stop-sign cultural moment when we celebrate how our hundreds of millions of users listened to Spotify by giving them a completely personalized experience to share with the world.

And while the strength of our brand has been a key point of differentiation for the company, even we have been surprised by the longevity and virality of this campaign. In 2021 was our most successful Wrapped to date, with unprecedented engagement. It was the #1 worldwide trending topic on both Twitter and Tiktok, proving it's really more of a cultural phenomenon than ever.

Our expertise in audio personalization is truly unmatched and we have already begun to apply it to podcasts.

And the final foundation that I want to outline for you in 2018 was Freemium-the combination of our free ad-supported tier and our premium subscription tier. And our strategy was to be available to all consumers on all platforms. So if you wanted t

LINK:	https://newsroom.spotify.com/2022-06-08/spotify-founder-and-ceo-daniel...
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