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Shares in music streamer Spotify (NYSE: SPOT) are up nearly 9% in premarket trading as of the time of this writing after the company reported fourth-quarter earnings results for its fiscal 2024. It was a quarter that ended the music streamer’s first full year of profitability. And saw many important metrics increase by double-digit percentages. Heres what you need to know about Spotify’s Q4 2024 earnings. SPOT Q4 2024 earnings by the numbers Spotify posted several investor-pleasing metrics today. Here are the main highlights of Spotifys Q4 2024: Monthly Active Users (MAUs): 675 million (up 12% Y/Y) Premium subscribers: 263 million (up 11% Y/Y) Total Revenue: 4.2 billion (up 16% Y/Y) Spotify says its 35 million additional MAUs was the largest Q4 MAU addition in the companys history and ended up exceeding the companys internal forecasts by 10 million. Additionally, its Premium Subscriber additions of 11 million were 3 million more than the company forecasted. But perhaps the best news from Spotifys results was that it reported its first full year of operating income profitability. Operating income in Q4 reached 477 million, and for the 2024 fiscal year totaled 1.4 billion. Spotify stock jumps After announcing its Q4 2024 results, Spotify shares jumped in premarket trading on the New York Stock Exchange. As of the time of this writing, SPOT shares are currently up almost 9% to above $596 per share. Year-to-date, SPOT shares were already up over 21% as of yesterdays closing share price of $549. Spotify’s stock is trading significantly higher than where it was just a few years ago. In October 2023, the companys share price was trading below $75 per share. But since then, it has steadily risen and, since mid-2024, has experienced a resurgence. Much of that resurgence can be attributed to the efficiency efforts the company has adopted in recent years, notes Yahoo Finance. Those efforts have included reducing costs through layoffs and shifts away from its beleaguered podcasts strategy. Looking ahead to 2025 Spotify is the largest music streamer in the world in terms of monthly active users. Its next closest competitor is Apple Music. But if Apples recent efforts are any indication, the iPhone maker could be gunning hard to overtake Spotify in 2025. Yesterday, Apple announced that it is offering new Apple Music subscribers six months of the music streaming service for just $2.99. That equates to less than 50 cents a month and shows the financial hit Apple is willing to take if it means gaining some of Spotifys hundreds of millions of current subscribers, who currently pay $11.99 a month for individual plans. Spotify did not address Apples promotion in its Q4 results today, but the companys CEO, Daniel Ek, said he was very excited about 2025 and [feels] really good about where we are as both a product and as a business. We will continue to place bets that will drive long term impact, increasing our speed while maintaining the levels of efficiency we achieved last year, Ek noted. Its this combination that will enable us to build the best and most valuable user experience, grow sustainably and deliver creativity to the world. As for the first part of Spotifys 2025, the company has issued a Q1 forecast in which it sees itself adding 3 million MAUs for the current quarter as well as another 2 million net new premium subscribers.
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E-Commerce
Over the past few weeks, both Meta and Microsoft have announced that they will be conducting company wide performance-based layoffs. Meta even put a marketing spin on the practice of getting rid of employees based on poor performance, calling it non-regrettable attrition. On the surface this may make sense: leaders want to ensure every individual at the company is making an impact in some way and contributing to the bottom line. And heres the biggest mistake that can occur during performance-based layoffs: deciding to embark on this process assuming that there are well-defined goals and metrics for individuals, and a clear understanding of what good versus poor performance looks like. If you have been asked to be involved in executing performance-based layoffs, consider the following: Look at factors beyond the final performance rating Many leaders assign a number, on a scale of 1 to 5, aligning to a forced bell curve when it comes to assessing the performance of their talent. And we must take the time to consider factors and details beyond the final performance rating that was given to the individual. There can be so many details behind what can be perceived as a low rating or poor performance that need to be looked at. Consider the following: Is this person new to their role? I once worked at a company that had the following rule: Individuals who were new or six months into their role automatically received not fully meeting expectationsan automatic 2 rating regardless of how they were actually doing on the job How many new managers has this person had in the past year? Who rated this individual and are they still at the company? Does the most recent manager actually understand what this individual does and works on? Is this the first low performance rating they have received? What was their rating during their last review? Is there a pattern of this individual not performing or is this an outlier? Was this person on any type of leave? I once worked at another company where it was uncovered that a number of women, including myself, were given the lowest performance rating when we were all out on maternity leave. On the other hand, you can have individuals receiving high performance ratings because they are well-liked or friends with the CEO, but have actually not achieved their goals. Look beyond the number assigned to an individual to assess whether or not they are actually performing on the job. Review self-evaluations versus the managers evaluations When leading performance-based layoffs, take a look at the documentation thats available from the most recent performance cycle. The truth about performance often lies in between an individuals self-evaluation versus the managers evaluation: what the individual thinks they achieved versus what the manager believes they have achieved. Here are some things to look for in the reviews: Where do the reviews overlap? Are there any distinct differences? Where do you see subjectivity in the managers review? Do you spot any potential bias? Is the individual taking accountability for any performance gaps and sharing what they learned? Is there a team project that failed that somehow this one individual is being unfairly judged for? Dont wait to deal with performance issues We must hold leaders accountable who dont deal with performance issues. I have worked with too many leaders who don’t want to take responsibility for someone who is not performing on the job. Instead, they will try to eliminate their role, move them to another team and make them someone elses problem, put them on a performance improvement plan, or create a difficult working environment to get them to resign. And finally, they wait for a company wide performance layoff so they dont have to intervene. If you have chosen to lead other people, its a responsibility and a privilege. You have to teach them how to do their job, coach them through mistakes, and give them detailed feedback when they arent able to complete tasks. When you decide to label someone a low performer, its time to self reflect on what role you played in this situation. If someone cant be upskilled to do the job, is unhappy in the job, or cant achieve the clear metrics of the role, your responsibility is to help them move on to what they are meant to do next. And to deal with this quickly, and not wait for an entire year for company wide performance-based layoffs. Leaders who arent held accountable for their teams poor performance should also have that reflected in their review and it should impact their compensation. While on the surface performance-based layoffs may sound like a good idea, make sure you are evaluating individuals fairly. Then you can make the decision if they should stay or move on externally to what they are meant to do next in their career.
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E-Commerce
Business leaders are often reluctant to speak about their competition. Its rare that youll hear Netflixs Ted Sarandos talk about Disney+, or Skimss Jens Grede speak about Spanx. Its uncouth and unhelpful, a good PR will tell you. Thats why its utterly refreshing when Dan Clancy, CEO of the ultra-popular livestreaming platform Twitch, throws out opinions on his competitors with abandon. [TikTok] was the first platform that didnt just copy Twitch, Clancy tells Fast Company. YouTube just made Twitch on YouTube. Facebook just made Twitch on Facebook. Kick downright copied the site. It helps that Clancy doesnt see these other livestreaming platforms as direct competitors. He sees Twitch as a general player in the market of attention, putting the company in competition with every social media app, not just the live ones. Really, what were doing is competing for your time, he says. But these other livestreaming platforms are growing, and growing quickly. According to Stream Hatchet, Twitch still holds onto 61.1% of the market, but YouTube Gaming is on the rise with 22.9%. Kick, SOOP Korea, and CHZZK all have single-digit market shares, making them small but impactful. And, per Streamlabs, Twitch occupies 82.3% of the total hours streamed, but only 60.8% of the total hours watched. Twitch also struggled in 2024. Fresh off a second round of layoffs and a shutdown in South Korea, it looked like Twitch was in decline. Still, they maintained their dominancy over these direct competitors. Can that grip hold? How Twitch got (most of) their top streamers back Just a few years ago, Twitch was the only livestreamer in town. YouTube introduced their Gaming platform in 2015, but didnt meaningfully invest in expansion until a few years later. Facebook Gaming and Mixer burned bright in the late 2010s, only to be effectively shut down. Kick didnt launch until 2022. Almost all of these platforms came with something directly detrimental to Twitchs business: exclusivity contracts. Google was the biggest offender with these contracts, coaxing Twitch creators to stream exclusively on YouTubes platform with hefty bonuses. Ludwig, Dr. Lupo, and LilyPichu all took these contracts. Myth, a major Fortnite streamer on Twitch, was YouTubes biggest catch for a reported $4 million. But most of these defectors, including the four mentioned, have since returned to Twitch as their contracts lapsed. LilyPichu is the best example, because she liked the fact that she was getting this check, but she was so looking forward to the day when the contract ended, because then she could come back, Clancy says. Its because of that sense of belonging and home. Thats not just for their viewers, its also for them. Twitch isnt completely absolved from the last five years exclusivity drama. They built an exclusivity clause of their own into the Monetized Streamer Agreement, making it more difficult for creators who cross-stream to make money. But theyve since rolled that back, which Clancy sees as a benefit. He takes a creator-first approach; people come to Twitch for their favorite streamer, not for Twitch itself. Thus, anything keeping streamers off-platform (like the exclusivity clause) is bad for business. If theres a creator you watch on TikTok and they stopped posting content for two weeks, you probably wouldnt even know, Clancy says. Whereas on Twitch, your affinity is with the creators that you have come to know. Thats one reason why creators that are focused on livestreaming prefer Twitch. People are showing up for them, not just to swipe. Twitchs take on content moderation Where YouTube Gaming quietly tries to swipe creators, Kick is more vocal about being the anti-Twitch. They loudly tout their 95:5 revenue split with creators, which is fare more generous than Twitchs 70:30. And, importantly, Kick emphasizes its looser moderation policies. Kick was co-founded by a Twitch streamer, Trainwreckstv, who almost entirely moved over his popular Grand Theft Auto account so that he could avoid Twitchs policy against cryptocurrency gambling. Other big accounts, like Buddha and xQc, moved most of their content to Kick so they could gamble. Others take refuge in Kick after being kicked off Twitch. In the platform’s Community Guidelines, Twitch has specific policies against “hateful conduct” and “harassment.” But live-streaming is a popular outlet for political radicals, making these guidelines controversial. Adin Ross, for example, was banned from Twitch in 2023 after an on-screen chat projected slurs onto the stream. Ross ran to Kickwhere he later hosted President Donald Trump. Clancy says Twitch won’t loosen up moderation practices to compete with Kick. In fact, he wagers, most of the creators shifting to Kick didnt move for the looser moderation at all. While they may have said thats the reason, I think every single one of them were given a contract where they were making a lot more money than they would organically make, he says. Clancy is quick to point out that Twitchs moderation exists to make sure the platform isnt toxic. Thats why they banned crypto gambling, and why they have policies against hate and harassment. But heres where I push him. Hate and harassment are broad and flexible terms. On Meta platforms, it wouldve been considered hateful to call an LGBTQ+ mentally ill in 2024; now, its just free expression. So how firm are Twitchs policies? If you dont like what somebody is saying, then dont watch their channel, Clancy says. There are certain things that are off limits, but I dont think that has changed. . . . We have the same policies, and I think most people still would consider that saying those words is hateful. Twitch’s expansion plans One of the oddball entrants to the livestreaming game has been TikTok. Other mobile-first platforms had already launched streaming; celebrities have been over-exposing themselves on Instagram Live for years now. But Instagram Live is a monologue, not a marketplace. On TikTok, creators can now monetize their livestreams, either through receiving “gifts” from viewers or from affiliate marketing. That revenue model happens to look a lot like Twitch. Take those popular “NPC” streamers begging for roses on TikTok Live; five years ago, they might have been shilling for Twitch bits. Of course, TikTok’s future in the U.S. is anything but a sue thing. I ask Clancy about his thoughts on the TikTok ban. There would be pros and cons to a market without TikTok, he claims. [TikTok] exposed new viewers to livestreaming, which at some level helps Twitch, he says. [But] if theyre not around, then theres people that might be interested in streaming that we should be reaching out to. That’s just one way that Clancy can get more creators on Twitch. Throughout our conversation, he gleefully lists the wide variety of streamers they host. Did I know T-Pain was on Twitch? Or what about the popular TikToker James Seo, who Clancy convinced to join Twitch while at a party for MrBeast? But these fresh faces are fundamental to Clancy’s approach, the reason why he thinks Twitch can continue its dominance. When they have the creators, the viewers will follow.
Category:
E-Commerce
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