Spotify's Plan to Monetize Live Events

Spotify‘s latest advertising product, Live Experiences, lets brands integrate with and sponsor its events for the first time.

The company has hosted bespoke events for over seven years, but it has historically used them as marketing vehicles to promote new products, campaigns or artists, said head of experiential and content production Keyana Kashfi.

“We wanted to make sure that we can still do special things that are owned and operated by us,” Kashfi said. “But now, we’ve figured out a way to open the doors and share that Spotify brand with clients. And this is it.”

Spotify’s productization of events reflects a broader focus on revenue generation and profitability that has swept the technology industry over the past two years, said Jeff Weiner, partner at audio experience agency Work x Work. As part of this effort, Spotify shed 2,300 jobs last year.

Event sponsorships are unlikely to add significant incremental revenue to the Spotify business, which generated $14 billion in 2023, according to public filings. (It previously worked with Tic Tac in November 2019, pausing the effort when the pandemic struck.)

But events sponsorships add touchpoints to Spotify’s advertising business, which can help expand its average deal size, yield robust first-party data and make the company more attractive when competing for premium brand budgets.

“For companies already advertising with Spotify, events offer a way for them to more meaningfully interact with the community they are trying to reach,” Weiner said. “Live events provide advertisers with a bunch of opportunities—data, access and deeper integration—that they couldn’t otherwise get.”

Live Experience events fall into four categories

In its first year, Spotify plans to produce between five and 20 Live Experiences, all free to attend, said Kashfi.

Each event will fall into one of four categories: custom events tied to Spotify playlist franchises, such as RapCaviar or Pop Country; events tied to cultural moments in music, such as the Grammy Awards; events tied to podcasts produced by The Ringer; and events tied to Spotify’s owned and licensed podcasts.

The company produced its first event over the weekend, a two-night showcase of six rising artists from the Chicago area, tied to its Fresh Finds franchise. Samsung sponsored the event, which featured several activations that encouraged attendees to try out features of the newest Samsung phone.

“Samsung has a deep belief that the Galaxy AI ecosystem helps creators turn their passions into professions,” said Jacs Wyatt, Samsung’s head of digital marketing and social commerce, “so Fresh Finds is a great place for the brand because we want to be a part of these artists’ journeys.”

For now, the details of Live Experience sponsorships depend on the brand and its needs, said director of technology and telecommunications sales Brendan O’Donnell. 

Except for tentpole moments like Cannes and the Super Bowl, the events will not run on a fixed schedule.

Slim margins and potential conflicts

However, working with advertisers to sponsor events could raise conflicts when it comes to working with certain talent, many of whom have brand deals themselves, said Weiner. Technology platforms often want to be seen as agnostic to any specific interests, as doing so enables them to work with and appeal to as many parties as possible.

And compared with subscriptions, which made up 87% of Spotify’s total revenue in 2023, events have slimmer profit margins and scale less effectively, added Weiner.

Still, events offer sponsors, artists and even Spotify the opportunity to unlock valuable first-party data about attendees.

“We’re at a point where the company recognizes that there’s so much opportunity and appetite from brands to take what we’ve done so well digitally and transform that into an in-person experience,” O’Donnell said.