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–Hannah Doyle

Spotify’s Business Shift, Explained

Despite having 489 million users and plenty of brand recognition, Spotify still loses money every year.

Its most recent quarterly earnings report suggests Spotify plans to fix that by doubling down on a revenue strategy that places ads ahead of premium memberships. We’ll explain.

How did we get here?

• Spotify took the Netflix approach to growth—by spending the last several years shelling out more than $1 billion on buzzy original podcasts from flashy names like the Obamas, Joe Rogan, The Ringer, and more.

• But revenue didn’t necessarily follow popularity and its stock price dipped 60% in 2022.

Which brings us to today: Despite its growing user base, Spotify is still operating at a loss and recently had to lay off 6% of staff. Among those heading out the door is chief content officer Dawn Ostroff, who largely engineered Spotify’s podcast-first strategy.

So now? Spotify appears to have set its sights on becoming the platform every podcaster uses to distribute and their content—moving away from signing mega-pricey one-off deals and toward becoming a self-serve platform where anyone can publish content that Spotify monetizes.

• What that could look like: Spotify wants to build advertising technology that resembles YouTube's AdSense revenue sharing program, according to Bloomberg.

• The target audience? Spotify hosts almost 5 million podcasts and says it wants to reach 50 million creators to incubate them on-platform.

Some context: YouTube, a major competitor in the audio space, shared about half of its nearly $30 billion in advertising revenue last year with creators. Spotify hasn't publicly said anything about its plans for creator payouts.

Side note: Drake is hopeful. “We should get bonuses like athletes to motivate the future artists to be consistent and competitive,” he put on his IG story.

Twitter to Share Ad Revenue with Creators

Twitter CEO Elon Musk announced late last week that the platform will begin sharing revenue with creators, falling in line with Instagram, YouTube, and TikTok.

The details: Twitter will share revenue from reply-thread ads with creators. Creators must be subscribed to Twitter Blue (which runs you $8/month) to participate. 

Beyond that? Most other details are scarce, including what cut Twitter plans to take.

Big picture: Throughout his bumpy time at the helm of Twitter, Musk has become increasingly interested in the creator experience on the platform, from launching high quality longer-form video to revamping view metrics.

Sponsored by Spreadshop

How One Creator Turned Haters into Fans (and Profit) 

Meet Daniel Batal—a Spreadshop creator who used the power of Merch-On-Demand to clap back to a hater.

After an online troll called him a wannabe rockstar, he replied with a catchy song and music video titled “I’m Not a Rock Star” and a custom t-shirt he quickly designed and sold on Spreadshop.

Their platform lets you easily create custom designs and merchandise without any inventory or upfront costs. Plus, they make it easy to connect with your fans and turn your passion into profit. Just like Daniel, who was the top seller on Spreadshop for that entire week.

So what are you waiting for? Check out what else Spreadshop can do.

Shorts Monetization Is Live…What Now?

We’re one week into Shorts monetization on YouTube. Though we won’t know the full impact for a while, the immediate creator reviews appear to be mixed.

The positive review: Creator Matty Benedetto of Unnecessary Inventions shared that he made more on his Shorts on the first day of February than he did for the entire month of January.

The not so positive review: Some creators have criticized YouTube’s small payouts. Many are receiving between 1 and 5 cents per thousand views on Shorts, which means videos with a million views might make only $50.

Want more on the future of Shorts monetization? Colin & Samir interviewed YouTube employees and asked every question you’re probably thinking, from making a living on Shorts to algorithm myths. Check out their conversation here.

👀 Creator Moves

• Danny McMahon is hiring a part-time researcher/story producer. Storytelling and investigative experience encouraged.

• Zach King is hiring freelance sound designers for YouTube and TikTok.

• Food Theory is looking for a full-time creative director. Must love food, research, and internet culture.

🔥 Press Worthy

• MrBeast faces criticism over a recent video about curing blindness.

• Logan Paul is sued in a class action lawsuit over his CryptoZoo project.

• Elle Mills shares her reasoning for quitting YouTube in a NYT op-ed.

• TikTok opens its transparency and accountability center in LA.

• Kai Cenat is swatted on day two of his month-long subathon.

• Insider is seeking nominations to highlight women founders in the creator startup space.

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