Spotify shares jump after 2030 targets and AI music deal with Universal
The company outlined long-term growth goals, expanded creator offerings, and unveiled an opt-in AI covers and remixes tool with Universal Music.
Quick Look
- Spotify shares rose 15% after the company presented 2030 growth guidance and announced an AI music agreement with Universal Music.
- The plan includes long-term revenue targets, new creator subscriptions, audiobook updates, and an opt-in remix tool for artists.
AI-generated summary
Why It Matters
Spotify said this was its first investor day since 2022 and its first under co-CEOs Gustav Söderström and Alex Norström. The company is trying to expand beyond music streaming into audiobooks and podcasts while the music industry confronts copyright questions tied to generative AI.
Spotify shares jumped 15% after the music streaming platform presented guidance for 2030 and announced an AI deal with Universal Music, as the technology raises disruption concerns across the industry.
The company said it expects revenue to grow at a compounded annual growth rate in the mid-teens and projected gross margins of 35% to 40%. Spotify described plans to reach 1 billion subscribers and $100 billion in revenue as its "north star."
Under the deal with Universal, Spotify will allow users to create covers and remixes using the voices of artists and songwriters who opt in. The company said the tool will launch as a paid add-on for premium users and create a new revenue stream for artists.
"Today, there is no media player for both public and private content - or put differently - there is no media player for the generative era," co-CEO Gustav Söderström told investors on Thursday at Spotify's first investor day since 2022. "We believe Spotify will become that."
Spotify is in the middle of a reshuffle. This is the company's first investor day in four years and the first under co-CEOs Söderström and Alex Norström. Founder and former CEO Daniel Ek stepped down at the start of this year after about two decades at the helm.
The company is also trying to show it can be more than a music streaming platform as it expands into verticals such as audiobooks and podcasts.
At the same time, the music industry is undergoing a broader shift. Record labels are grappling with how to protect artists from copyright infringement as platforms that generate music from prompts become more popular, blurring the line between AI-made and human-made music.
Lawsuits have already emerged within the industry. In 2024, Warner Music, UMG and Sony sued AI music startups Suno and Udio, alleging the companies used copyrighted songs to train their AI models.
Suno, which raised $250 million in November, settled with Warner Music last year and signed an agreement allowing users to create AI-generated music featuring participating artists. Universal and Warner also settled with Udio.
Spotify also announced subscriptions for certain creators on the platform, updates to its audiobook feature, and a program allowing certain megafans to buy two concert tickets before they go on sale to the public.
Since 2022, Spotify said it has added more than 340 million users to the platform and grown its subscriber base by more than 110 million.
What to Watch
AI outlook — possibilities, not facts
Spotify is likely to provide more details on timing and pricing for the AI covers and remixes add-on.
Likely · Within days
Investor and industry scrutiny will likely focus on how the Universal agreement handles artist opt-in and revenue sharing.
Very likely · Within days
Spotify will continue highlighting audiobooks, podcasts, creator subscriptions, and fan offerings as part of its effort to diversify beyond music streaming.
Very likely · Within weeks
Open Questions
- When will the AI covers and remixes tool launch?
- How will participating artists and songwriters be compensated under the Universal agreement?
- What proportion of Spotify's future growth is expected to come from audiobooks, podcasts, and creator subscriptions?
- How quickly does Spotify expect to approach its 1 billion subscriber and $100 billion revenue goals?
