Spotify had a strong performance in the third quarter, with monthly active users reaching 788 million and revenue approaching 5 billion euros (about 5.6 billion US dollars). However, what is more noteworthy during this financial report conference call is the company's perspective on how people will listen to music in the future, as well as why the rise of AI agencies may be beneficial to its business.
Co-chairman Gustav Söderström ( Gustav S ö derstr öm) believes that this music streaming giant is particularly well-suited for this transition.
Söderström told investors: “Spotify belongs to one of the few categories that truly have the potential to thrive in the era of agents. This is because agents are best at taking over and handling those tasks that people would rather not do themselves. People like to be freed from trivial matters. But entertainment is just the opposite. No one would want an agent to ‘summarize a song’ for them.”
He stated that in the future, listeners will no longer need to open Spotify, search for a particular artist, and create their own playlists. Instead, they can let the AI assistant do the work for them. Users might want a list of music to listen to while running, a podcast they want to continue listening to after discussing a certain topic with AI, or an audiobook review that seamlessly picks up from where they left off last time.
Spotify hopes that these agents will call on these services, allowing users to discover music and interact with Spotify through conversations rather than just through their own applications. It is worth noting that Spotify is the first music service to be integrated with Meta's Muse assistant, and it has also been connected to ChatGPT and Claude.
Söderström said, "Our goal is to become a media service that can be used through any proxy, truly turning the growth of proxies into a tailwind rather than a headwind. That’s exactly what we see now. We see that the adoption of Spotify among these proxies is very good. Other companies may still be thinking about what to do, and many are even stepping back, while we are actually taking the initiative to participate in this wave of growth, rather than standing by and watching."
There have already been some signs of friction in the market regarding how proxies access third-party services. For example, Amazon has blocked Meta's Muse from shopping on its platform, which indicates that large platforms may restrict external proxies when issues such as access rights, security, privacy, or commercial control arise.
The proposition of Spotify is not just that AI should make entertainment content more easily accessible. It should also make the experience more personalized.
Söderström describes today's Spotify as "an intelligent media service packaged as a proxy. Whether you use it directly through our app or through another proxy... Spotify is now also a proxy; you can not only click on it within our app, but you can also converse with it, ask it questions, and give it commands. Today, we can do things that other media services cannot."
He explained, "For example, you can ask Spotify to go through your listening history since 2008 song by song, pick out your favorite songs, adjust their beats by stretching, speeding them up, or slowing them down, and then sort them according to tone and BPM. Next, you can also have it mix these songs into a perfect running playlist that matches your exact pace perfectly."
Spotify has years of listening history data available for use, including artists that users listen to repeatedly, songs that have been skipped, as well as newly discovered music. This information allows it to provide more personalized recommendations than the general AI assistant, which has a limited understanding of individual tastes.
However, Söderström also emphasized that Spotify does not send audience data to partners. Instead, the proxy makes a request to Spotify, and it is Spotify that uses its own system to understand this request and decides what content to play.
