Spotify Leans on AI to Keep Subscribers Listening

Spotify is increasingly leaning into artificial intelligence to keep users tuned in.

And as CNBC noted in a report Sunday (March 22), experts say these tech investments could be crucial to the company’s ability as its core offering — music — becomes commoditized across the likes of Apple and Amazon’s music platforms.

The report contends that the core of this strategy is Spotify’s recent integration with OpenAI’s ChatGPT, letting users request music and podcasts through natural language prompts within the chatbot. The move is designed to offer levels of specificity — such as excluding specific artists or matching niche moods — that traditional “like/dislike” feedback buttons can’t match.

Spotify’s internal AI tools are already seeing significant scale, the report added. The iDJ (Interactive DJ) feature, introduced in 2023, now boasts roughly 90 million subscribers who have collectively logged more than 4 billion hours on the app.

In addition, the platform’s “Prompted Playlists” feature allows power users to essentially “write their own algorithm” by setting specific rules for custom mixes, CNBC added.

Co-CEO Alex Norström has said that these investments are paying off, as users are spending “more days in a month” with the platform across various life moments, the report said.

However, analysts suggest Spotify’s edge lies in the high switching costs created by years of curated libraries and trained algorithms, CNBC said.

Michael Pachter of Wedbush Securities likens this to Google’s search dominance, where deep personalization entrenches users so firmly that switching becomes inconceivable.

“Google managed to widen its moat by offering a number of features that make the service stickier, including remembering my credit card and password info,” Patcher told CNBC.

“I can’t even conceive of switching from Google Search, and I think that is what Spotify is trying to establish.”

PYMNTS wrote last week about the company’s role in addressing the proliferation of music being made via AI. Co-CEO Gustav Söderström said during a recent earnings call that the platform should not police creative tools:

“Spotify should not decide what kind of tools you are allowed to use. Are you allowed to use an electric guitar, a synthesizer, a digital audio workstation? Or AI or—more complicated question—a bit of AI. … I do not think it is our decision to make.”

But Söderström acknowledged the customer demand for clarity about how their music was created.

“We’ve been working with the industry to allow creators and labels uploading music to put in the metadata how it was created so that we can surface this to users.”

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