To further diversify its portfolio of revenue streams, Spotify has turned to another angle of the music business to generate revenue. Ticket sales.
The global streaming platform is best known for music streaming and its podcast business. Leveraging their user base, they now aim to be a one-stop-shop for everything in the music industry, potentially pushing to weed out competitors in the ticketing business such as Ticketmaster.
Spotify is currently a partner of Ticketmaster, See Tickets and Eventbrite
In a statement to The Verge on Spotify’s new spokesperson model, Carling Farley said: “At Spotify, we regularly test new products and ideas to improve our user experience. Some of them end up paving the way for our broader user experience and others just serve as important learnings,”
“Tickets.spotify.com is our latest test. We have no further news to share on future plans at this time.
Ash Reddy, founder and CEO of The Social Chair, a booking agent for music industry events, told the news, “Our primary focus as an industry should be to see and discover new talent as well as to give people the opportunity to see established talent. I think with this platform, musicians will be more inclined to do shows and make it their main source of income. At the moment, it’s secondary for some musicians because of the lack of marketing for their shows, etc.
“With Spotify entering the mix, I can imagine there is growing interest in seeing live events as so many people spend time on the platform and can be directed to a page to find music shows and buy them directly through their account. Maybe they could even develop a model where that is somehow included in their monthly fee.”
Reddy and The Social Chair started with no support or capital in the booking industry. They have grown to produce over 250 events a year across the country, generating substantial profits in bar and ticket sales, while also booking established artists such as Murda Beatz, Rich Homie Quan, Fisher, Lil Dicky, Rich The Kid and Dzeko.
Spotify isn’t the only entity getting into the ticket business. TikTok recently announced a partnership with Ticketmaster that will allow users to purchase tickets to see select musicians, and even WWE, within the app. TikTok music also had a trademark filed in May, which could see the social media platform aiming in its own way to compete with Apple.
Reddy continued on the state of the industry, “There is a desperate need and demand for music events in countries around the world. There’s a huge disconnect between fans and artists because they don’t know the details of things like popularity in the markets, later availability of musicians, and the overall streamlining of the process. We want to be part of this change to help artists make more money, as well as to get them to places that want to see them but often don’t get the chance or have to go to great lengths to see them elsewhere. Companies like Spotify and TikTok want to take advantage of this because they see the opportunity. »
Many companies try to take advantage of the potential they have to excel in other areas. Apple’s brand power sees it compete in the automotive market in user trust surveys, but it currently has no cars for sale. Likewise, Spotify and TikTok are looking to use their relationship with their followers to seamlessly pivot to new revenue streams.
As the world recovers from the pandemic, ticketing and live event activity has been strong, with people clamoring for the experience after the separation shutdowns in most places around the world. In August, Live Nation announced that it had sold 100 million tickets this year, more than in 2019.
With several major tours to come, including Lil Nas X, Harry Styles and Bad Bunny, Michael Rapino – CEO of LiveNation said during the company’s recent earnings call that he expects ticket sales to be even stronger during the third and fourth quarters.
Spotify’s plans for greater dominance in the music industry were announced earlier this year in June at Spotify’s Investor Day. Charlie Hellman, Spotify VP and Global Head of Music Products, said: “In many ways, these monetization companies are where our promotion business was a few years ago – early on, but with enormous potential. And just like our promotion businesses, we plan to build on a large scale,”
“As we diversify revenue streams for artists and identify the best ways to increase spending from a user base that is on track to reach 1 billion, we will further enrich artists, even outside of their rapidly growing streaming royalties – and will deliver a margin impact for Spotify.