The company behind the world’s leading audio streaming platform is currently riding the crest of a Wall Street rally, seeing how its shares went up by over 30% over six months.
Shares for Spotify Technology SA, the parent firm of the Spotify streaming app, are currently up by over 135% year to date as of Sunday, December 10th. This is despite a slew of layoffs which have led to the dismissal of 2,290 employees. Spotify was driven to retrench and reorganize after demand for its service dwindled back to pre-pandemic levels.
Another factor that has fueled the mass retrenchment is Spotify’s need to recoup over $1 billion in costs from its foray into podcasting, the bulk of which went towards contracts with celebrities who were hired to host these online broadcasts, as well as the acquisition of production studios. Unfortunately, the company’s podcast plans never came to fruition.
So, What Happens Now?
Artificial intelligence is now seen by Spotify executives as the key to improved and increased user engagement.
Indeed, the company has spent the past several months integrating AI technologies into its streaming platform. According to KeyBanc Capital Markets’ equity research analyst Justin Patterson, AI will give the company numerous ways by which it can boost engagement, as well as monetization.
These AI-enhanced solutions will include the launch of several innovations in the coming year. AI DJ, for example, is meant to simulate traditional FM radio broadcasts but allows users to customize content to their tastes. This innovation will be making its way to 50 new markets in its initial rollout.
For premium subscribers, Spotify is rolling out a series of audiobooks for their listening pleasure. An AI Voice Translation service meant to make podcasts accessible to those speaking different languages from the original material is also in the works.