The Rise of Live Audio Across Platforms

Spotify CEO Daniel Ek announced to investors on Wednesday that live audio experiences are poised for widespread adoption, mirroring the trajectory of Stories. The company recently acquired Locker Room, a live audio application, intending to leverage its technology for new conversational formats focused on sports, culture, and music.

Addressing Investor Concerns

Investors inquired about the integration of Locker Room with Spotify’s existing services, which primarily center on delivering pre-recorded content like music and podcasts. Ek explained that live audio represents a new capability set destined for broad implementation across various platforms.

The "Next Stories" Phenomenon

Ek likened live audio to the evolution of Stories, initially popularized by Snapchat and subsequently adopted by numerous platforms, including Instagram and Spotify itself. He believes creators will gravitate towards platforms offering the strongest connection with their audience.

Platform-Specific Live Audio Experiences

Each platform is likely to attract a distinct type of live audio creator. Spotify envisions capitalizing on its strengths in music and culture, bolstered by its substantial podcast investments. The surge in interest in live audio coincided with pandemic-induced lockdowns and the cancellation of traditional events.

From Clubhouse to Widespread Adoption

Clubhouse initially sparked interest in live audio with its exclusive, invite-only format. However, its popularity attracted attention from other tech companies, leading to the development of numerous clones. Today, Facebook, Instagram, Reddit, Twitter, Discord, Telegram, and LinkedIn all have live audio plans in development or already available.

Spotify's Acquisition Strategy

Rather than building a live audio platform from scratch, Spotify acquired Locker Room, originally focused on sports discussions. The service will be rebranded as “Spotify Greenroom” and expanded to include professional athletes, writers, musicians, songwriters, podcasters, and other prominent voices.

Spoken Word and Beyond

During its earnings call, Spotify addressed investor questions regarding the potential for spoken word audio to surpass music streaming in popularity. Ek suggested that spoken word may be just the beginning, with the format evolving over time.

Creator Engagement and Monetization

Ek anticipates that as more users engage with live audio, more professional creators will join the platform. He believes that live audio will provide musicians with opportunities to connect with fans, host listening parties, and ultimately drive monetization through Spotify’s revenue model.

Connecting Creators with Fans

Spotify reports that its over 8 million creators consistently request more avenues for direct fan engagement. Live audio offers a natural solution, leveraging Spotify’s reach of over 350 million users.

Synergy Between Live Audio and Music

Live audio isn’t viewed as a replacement for music streaming but rather as a complementary feature. Ek hinted that fans might gain early access to new music releases through live audio experiences.

Content Quality is Key

Ek emphasized the importance of high-quality content, highlighting Spotify’s existing network of talented storytellers. He believes compelling content will be the primary driver of audience engagement.

Moderation Challenges

A significant challenge lies in moderating live content, as conversations can quickly become unpredictable. Spotify’s stance on balancing free speech with the need to address misinformation and inappropriate content remains unclear. The company has previously removed episodes from its top podcast, Joe Rogan’s show, for various violations.

Establishing Clear Content Values

Before fully embracing live audio, Spotify may need to solidify its content values and develop a comprehensive plan for handling potentially problematic live sessions.

Market Pressures and Future Growth

Despite Ek’s optimism, Spotify’s stock experienced a decline following the earnings call, reflecting concerns about slowing growth and increased competition from rivals like Apple and Amazon. While the company added 3 million paid subscribers, it fell short of expectations for monthly active users and lowered its full-year guidance.

Live Audio as a Potential Catalyst

However, successful integration of live audio could potentially revitalize user engagement and drive future growth for Spotify.