Is Spotify’s Direct Ticketing Initiative On the Rocks?

Photo Credit: Haithem Ferdi

Spotify’s direct ticketing efforts may be in jeopardy after layoffs rip through the initiative’s dedicated team.Music streaming giant Spotify may not see a future in direct ticketing, after all. Since the Stockholm-based company underwent significant layoffs and cost-cutting last year, former employees reveal that most of the team dedicated to developing Spotify’s footprint in the direct ticketing space were among those let go.

According to The Ticketing Business, who spoke to several former employees affected by Spotify’s job cuts, Spotify has indicated to its remaining engineers it will look into revitalizing its direct ticketing efforts by year’s end. Whether that will materialize remains to be seen.

Spotify began dipping its toe into direct ticketing in August 2022, primarily with pre-sales and events featuring smaller artists. A month later, Spotify CFO Paul Vogel said artists had been “thrilled with the pre-sales” and the company’s “ability to target and sell tickets to their super fans and get that audience engaged.” He added that users who purchased tickets through Spotify were then more likely to listen to more of that artist on the platform.

But any significant efforts to expand the initiative were all but dead in the water by late 2023, especially as Spotify began focusing on redundancies across the company. At the beginning of the year, Spotify cut 600 jobs, and another 200 in June, followed by 17% of its remaining workforce — more than 1,500 employees — by the end of the year.In the third quarter of 2023, Spotify’s total revenue grew 11% year-on-year to $3.7 billion, with an operating income of $35 million. The platform added 85 million users (and 21 million paying subscribers) in the first nine months of the year. Financial analysis posits that Spotify’s latest cuts will reduce costs by $328 million this year.

Spotify has long struggled to turn a consistent profit, given its high operating costs — and its massive expansion three years prior didn’t help matters any. The Financial Times reports that for every dollar Spotify generates, it pays back approximately 70 cents to the music’s rights holders.