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EXCLUSIVE: Spotify cites Africa as key to bold growth plans

Joanne Carew
By Joanne Carew, ITWeb Cape-based contributor.
Johannesburg, 09 Nov 2022
Gustav Gyllenhammar, Spotify global VP for market growth.
Gustav Gyllenhammar, Spotify global VP for market growth.

Keen to double its user base by 2030, Spotify is making a big play for African music fans.

Currently available in around 183 markets, with close to half a billion users and almost 200 million subscribers, the Swedish audio streaming subscription service hopes to scale up to one billion users by 2030. And Africa forms a major part of its growth plans.

This is the word from Spotify’s global VP for market growth, Gustav Gyllenhammar, who is currently in Cape Town to attend Africa Tech Festival 2022.

“This year, we saw the largest number of Grammy nominations for Africa artists, so it’s clear that African music is growing in popularity and that there is a lot of excitement around what is coming out of the continent,” said Gyllenhammar, during an exclusive interview with ITWeb.

He noted this is why Africa is also a key export region for the business.

In the decade since Gyllenhammar joined Spotify, he’s seen a shift in the regions experiencing the greatest user growth. Europe and North America were initially big growth regions for the service, in part because of their high levels of access to reliable connectivity and smartphones. But in the last few years, Latin America and Asia have been growing for the brand.

“Africa has the youngest population in the world and a very, very strong music culture. So, for us, Africa is one of the most important growth markets we are looking at, together with a couple of the others.”

As part of this keen focus on Africa, he explained it is so important for Spotify to be ‘in market’ so that it can really get a feel of what African creators and listeners want and need.

“Content is so local. You need people on the ground to identify trends and opportunities. Sure, there are many things that are common across regions, but there are also many things that are vastly different.”

Similarly, it is important to partner with local providers to ensure users can make payments, for example, via the payment solutions they are familiar with.

“This local focus also aligns with the industry’s big personalisation drive. With the intersection of music and tech, there is an incredible opportunity for platforms and services like Spotify to allow users to listen to what they like and what they are familiar with, but then also to personalise their experience by recommending something different.

“The most important growth lever for us has been around blending insights from our editorial staff across the world with machine learning and the tech-enabled side of personalisation.”

Another sign of Spotify’s focus on the continent is the recently debuted $100 000 (R1.85 million) Africa Podcast Fund, which seeks to bolster the careers of podcast creators through financial grants, workshops and networking opportunities.

“If you look at the different audio verticals Spotify is active in, music is, by far, the biggest. The podcast industry is still very nascent in Africa and so we wanted to come into the market and help creators grow their audience and have their voices heard. We are also working with local advertisers to build interest in this medium so that creators can actually make a living.”

Acknowledging that data affordability, access to smartphones and device storage are hurdles to the business’s success across the continent, he outlines that it has partnered with telcos to address these issues and has also created Spotify Lite for lower-end Android phones. This has been successful in other developing markets, in an effort to help bring the service to as many people as possible.

“When we look at our big hairy goal to reach a billion consumers and 50 million creators, the path to this is really owned by Africa and some other markets in Asia and Southeast Asia.

“We definitely see Africa as a 100 million-plus user opportunity in the next five to ten years. This is why we are investing in a local team, with people from across the continent. We’re really excited about what lies ahead.”