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Though Spotify has focused its energy on podcasts in its quest to become the king of all things audio, the company hasn’t entirely abandoned its roots as a music streaming service, as seen with the launch of its latest test: selling tickets directly to fans.
While Spotify, run by Daniel Ek, hasn’t signaled it’s ready to take on Live Nation’s ticket-selling business, a direct-to-consumer ticketing platform would be a natural progression for the audio giant. Already, the Stockholm-based company provides listings from sellers like Ticketmaster and Eventbrite on its app and leverages users’ listenership data to inform its Fans First program, an email marketing initiative that allows artists to give their top listeners offers and has generated $300 million in revenue since launching in 2017, according to Charlie Hellman, Spotify’s vp and global head of music product.
At a glance, Spotify has a numbers-informed leg up over its potential ticket-selling competitors, and the company appears to be putting that to the test with the Aug. 10 launch of a designated website to sell presale tickets directly to Spotify listeners in the U.S. for a select group of seven artists: Annie DiRusso, Tokimonsta, Osees, Dirty Honey, Limbeck, Crows and Four Years Strong.
A Spotify rep declined to share what its ticket revenue share breakdown has been for the test launch. “At Spotify, we routinely test new products and ideas to improve our user experience. Some of those end up paving the path for our broader user experience and others serve only as important learnings. Tickets.spotify.com is our latest test. We have no further news to share on future plans at this time,” the spokesperson said.
Spotify is joining the ticket-selling game at an opportune time, as live shows and tours begin returning in full force. On Aug. 4, Live Nation reported record quarterly revenue amid soaring fan attendance. As of August, Live Nation said it has sold 100 million tickets this year — more than it did in 2019. The top 10 artists sold more than $513 million in tickets (including service fees) during the second quarter, up nearly 56 percent from the second quarter of 2019. On an earnings call, Live Nation CEO Michael Rapino said he expected ticket sales to be even stronger in the back half of the year, thanks to major global tours on the calendar. (Bad Bunny, Harry Styles, Lil Nas X, Post Malone and Lizzo are just a few of the artists slated to begin touring later in 2022.)
Spotify still has its relationships with ticket sellers to maintain, which could help explain its careful entry into selling presale tickets. But the audio company could find an opportunity to improve its strained relationships with artists, who have long spoken out about its lackluster royalties payments, by offering a better deal on ticket sales — especially since Spotify’s primary business is driven by subscriptions and, increasingly, ads, rather than ticket sales.
“In a lot of ways, these monetization businesses are where our promotion businesses stood a couple years ago — early stage, but with huge potential. And just like our promotion businesses, we expect to build for scale,” Hellman, Spotify’s global head of music product, said during Spotify’s investor day in June. “As we diversify revenue streams for artists and identify the best ways to increase spending from a user base that is well on its way to 1 billion, we will further enrich artists, even outside of their rapidly growing streaming royalties — and deliver margin impact for Spotify.”
This story appeared in the Aug. 17 issue of The Hollywood Reporter magazine. Click here to subscribe.
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