Good morning, everyone. I'm Bryan Goldberg, head of investor relations at Spotify. It's my privilege to welcome everyone in the room and on the live stream to our 2022 Investor Day. Over the next several hours, the Spotify management team will be presenting a detailed look inside our business and the future opportunities we see for growth, followed by Q&A. Before we begin, please note that we're gonna be making some forward-looking statements today, including projections or estimates about the future performance of the company. Actual results could materially differ for reasons discussed in our filings with the SEC. We'll also be referring to certain non-IFRS financial measures during today's presentations. P lease make sure to review the disclaimers on the screen. With that, let's get started with a short video.
[Presentation]
All right. Good morning and welcome everyone to Spotify's 2022 Investor Day. I'm Daniel Ek, and thank you all for joining, in person and for those of you joining on our webcast. We are excited to be here with you. Today, you will hear from me and a few members of our team about their own observations on the big bets we're making, and we will cover our progress, our investments, and dig into how we evaluate success and how I believe that you should be thinking about our business as investors. I also wanna talk about why I believe our future is a lot bigger and even a lot more interesting than what you might have heard of previously.
Spotify went public in 2018, and four years into that journey, we have netted some notable accomplishments, and we all know that we've also weathered some challenges. We've also morphed pretty dramatically as a business. I'm not sure that that journey is fully understood, and frankly, we probably haven't done a very good job of explaining it. As you assess our progress, let me start with what I'm sure some of you are thinking. You think that Spotify is a great product with a great experience. Some may also think that we're a bad business, or at least a business with bad margins for the foreseeable future. Others may even think that the audio market just isn't that significant. Today, we're going to say the quiet part out loud and directly address these assumptions.
To start, I believe we have a great product, and importantly, our business is doing really well. What's even more, we're really investing in building a fantastic multi-sided platform that has all the ingredients to become one of the truly unique creative platforms in the world. Based on what we see, we are accelerating our moves to seize that opportunity in the near term, and the value creation opportunity is very high. Nothing inspires confidence like a proven record of success, and success that can be effectively replicated over and over again with better and better results over time. Let's take a quick look back at what we said we would do and what we achieved. At our last investor meeting, we spoke about three core foundations that we believe would differentiate Spotify in the market, ubiquity, personalization, and freemium.
These are still the same foundations that drive our business today. Let's start with ubiquity. We shared this concept of ubiquity back in 2018, making Spotify available to anyone on any device. Back then, it was something that no one else was really embracing. At that time, we had about 250 partners. Today, Spotify has more than 2,000 partners, with integration spanning from wearables like watches to all facets of the connected life, including cars and even kitchen appliances. This idea of creating a truly frictionless experience for users was really as much about engagement as it was about convenience. Today, what's also different is that listeners not only have access to all the world's music, but also have access to more than 4 million podcasts and an increasing number of audiobooks.
Just like in music, thanks to our early investments in ubiquity, users can listen anywhere and everywhere. This is something that our competitors hasn't prioritized, and I think it is because they don't really have the same approach, and this is still a key point of differentiation for Spotify. Ubiquity has also proven to be a significant driver of new users to the platform, with 28% of all of our new registrations coming from these 2,000 partners, and that's up from 14% in 2018. People who use Spotify on more than one device represent some of our most engaged users with lower churn and higher lifetime value. That's a metric we'll spend more time on speaking about today. Today, 89% of Spotify's premium users use Spotify on multiple devices, up from 75% when we last spoke to you.
Further, this experience of innovating across different types of hardware with just about every player in the market makes us really well-positioned for whatever comes next. The more deeply that Spotify aligns with multiple devices, the more we also understand the listener, which leads us to our next foundation, personalization. When you ask our listeners what they most admire about Spotify, more than 81% cite our personalization, and this is what we call discoverability. Spotify listeners view this as the reason not only to sign up for the service, but also the reason to stay. They repeatedly tell us that we're the service that just gets them. Over time, our ability to find the right content for the right listener has improved significantly, and we are driving more discovery than ever before.
For further proof of the power of discoverability, just look at the success of our annual campaign, Spotify Wrapped. For the last seven years, we've created a stop sign cultural moment when we celebrate how our hundreds of millions of users listen to Spotify by giving them a completely personalized experience to share with the world. While the strength of our brand has been a key part of differentiation for the company, even we have been surprised by the longevity and virality of this campaign. 2021 was our most successful wrapped to date with unprecedented engagement. It was the number one worldwide trending topic on both Twitter and TikTok, proving it's really more of a cultural phenomenon than ever. Our expertise in audio personalization is truly unmatched, and we've already begun to apply it to podcasts.
The final foundation that I wanna outline for you from 2018 is freemium, the combination of our free ad-supported tier and our premium subscription tier. Our strategy was to be available to all consumers on all platforms. If you wanted to reach the most number of users in a very competitive world, what's the most aggressive strategy you could have? Well, how about lowering the price point to zero? This dual revenue stream approach, which now by the way is inspiring a lot of imitation across streaming, gave listeners a chance to try Spotify risk-free. At the same time, it enabled Spotify to build a successful flywheel with our free tier serving as a direct funnel to help us establish a large and growing subscriber base. There's no question that this model has performed exceptionally well.
The low price of entry also helped propel our expansion into new markets, and it also provides a critical safeguard to enable users to continue to have access to our platform, even in uncertain economic times. It's really this funnel that has propelled our revenue growth. As a reminder, when Spotify debuted publicly, we were available in 65 markets around the world. Thanks in large part to our unique approach, in just four years, we've almost tripled that number to 183 markets and territories. This includes some of the biggest and most exciting audio markets in the world, like India and South Korea, and the entire continent of Africa. I'm really excited for you to hear more about the impact of this expansion later today.
At the same time, we've also invested in fighting for platform fairness, including more payment choices for users. I think there's no question that a fair and open platform really enable better consumer experiences, and it allows developers to innovate, grow, and thrive. Just last quarter, we struck a first-of-its-kind payment deal with Google. While I can't talk about the terms specifically, I can say that they are beneficial to Spotify. Overall, there's no question that that will lead to new subscriber growth opportunities on Android devices around the world. All of these efforts to enhance our experience have made Spotify more essential than ever. Our monthly subscriber churn rate has declined by nearly 30% over the last four years.
It's clear that investing in building the best product also leads to the strongest growth and healthiest business. We are at a financial event, so let's get to it and talk about how this has translated into our financial goals that we set out. First, let's go back four years. Looking at what consensus estimates from analysts were, we've met or exceeded them. We've delivered compounded annual growth rate of 26% for monthly active users, 26% for subscribers, and 26% for revenue on currency-adjusted basis. From 2018 to today, our investments really coupled with a clear focus on the core set of fundamentals have paid off nicely for Spotify. The lone outlier, that's gross margin. There's two possible explanations for this lower gross margin results.
One might be that Spotify just isn't that good of a business, and the other is that we're investing behind the strength of our business to make the business bigger, stronger, and more resilient. I will share with you today that the music business is doing much better than you think. We're also investing in expanding what Spotify is. Today, we wanna share what we are building, what we call internally the Spotify machine. Compared to 2018, I believe Spotify is in a much stronger position. We are larger, and we have a much more differentiated proposition. Let's dive right into it. In 2018, Spotify had three revenue generating models. We had subscription, we had ads, and the beginnings of marketplace. At the time, these three were really only being applied to our music vertical.
Over the revenue split of 90/10, we were really just mostly a music subscription service, and ads was more of an afterthought, and marketplace was really in its infancy with only $20 million in gross profit contribution. Over the last four years, each of these three business models has evolved and grown, and today they are much more robust in their ability to scale and drive revenue and gross profit. What happened then to our long-term goals of 25%-35% revenue growth and gross margin target of 30%-35%? It really comes down to this. We saw the potential to be much more than just a music company. By leveraging what we learned and all of the technology we built in music and across other verticals, our ambitions became much bigger. Here's where those investments have taken us.
We are now the world's largest audio streaming platform, but the prize we're going after is actually much greater. As a consequence, the total addressable market is gigantic. This is the Spotify we've been investing behind for the past few years, and this is the unrecognized narrative I referred to earlier. It's a future that's much more exciting for listeners and artists and songwriters, creators, shareholders, and advertisers. It has a lot more financial upside because of our ability to successfully combine and bundle multiple business models with multiple verticals into one user experience. It's really under this one single experience that our model comes to life. It's a model with multiple verticals that have very different characteristics and gross margins. I can confidently say that this model in its totality is doing way better than you think. Let's talk through this evolution.
As you all know, our company in 2018 was all about music. When you isolate music, thanks to our marketplace products, its gross margins has been steadily climbing. We're performing much better than you probably suspect, roughly 28.5%, which is significant progress in reaching our 30%-35% long-term goal. What's been dragging it down is our move into podcasting. We saw such a significant opportunity to expand our platform and our audience, so we decided to go aggressively after podcasting. This meant making a significant investment, which clearly has brought more listeners to Spotify and deepened the engagement, but it also impacted our overall gross margin. While the podcast vertical is still largely in investment mode and not yet profitable, we believe it has a 40%-50% gross margin potential.
Looking back, when we jumped into podcasting, there were really huge obstacles to overcome. We were a distant third behind the largest players in the industry, and everyone said we wouldn't be successful incorporating podcasts into what's traditionally been a music app. Where others saw challenges, we saw an opportunity to turn a nascent business into one of the most attractive verticals in the media landscape, and we applied the same winning formula as we did to music. We were able to build on the large and highly engaged global user base we established in music, giving creators scale from day one. As a result, we dramatically expand the entire podcast industry. In addition to this, we made big acquisitions, starting with Anchor and Gimlet, but then followed by others, including The Ringer and Parcast.
We've invested to bring some of the world's most popular talent and most iconic franchises exclusively to our platform. We have continued to differentiate ourselves through our own programming. We're also enhancing the podcast discovery experience, which you'll hear more about later in this program. I think this ability to leverage the state-of-the-art machine learning technology to improve the discoverability of podcasts. It's really in its early innings of doing for talk listening what our personalization did for music listening. It works. We're now the number one platform that podcast listeners use the most in numerous markets around the world, including here in the U.S. In just three years, we've not only become a leading platform for creators and listeners, but we've expanded the very format of podcasting itself.
What's even more, all of these investments have resulted in user growth, retention, and increased engagement, with overall consumption hours reaching all-time highs quarter after quarter. Despite all of this, we still think that there's incredible potential in this space. While we may have traded some near-term gross margin in the expense of these investments, we really believe the impact that they will continue to have on our lifetime value on users is significant. You'll hear more about this concept of lifetime value throughout the day, because this is the primary tool that I use to judge whether our strategy and investments are paying off. We will talk a lot more about how we think about that and how we know that that drives our business.
To sum this point up, what our successes in music and podcasting has clearly demonstrated is that we built a powerful machine and solid infrastructure that enables us to go after new verticals. We're not waiting around. Several months ago, we announced the agreement to acquire Findaway, a global leader in audiobook distribution. While we're still waiting for this deal to close, we believe that audiobooks, in their many different forms, will be a massive opportunity. Today, the global size of the book market is estimated to be around $140 billion, and that's inclusive of printed books, e-books, and audiobooks, with audiobooks having only about a 6%-7% market share. When you look at the most penetrated audiobook markets, it's actually closer to 50% of the market.
Call that annual opportunity of $70 billion for us to expand and eventually compete for. Just as we've done in podcasting, expect us to play to win. With one major player dominating the space, we believe we will expand the market and create value for users and creators alike. This third vertical of audiobooks further builds on our ambition to be the destination for creators. While it's still early, we expect audiobooks to also have healthy margins above 40% and be highly accretive to the business. Here again, we will apply the same differentiating foundations of ubiquity, personalization, and freemium to attract both creators and users and drive engagement. Importantly, we aren't planning to stop there. We see the opportunity to continue to imagine and explore new verticals across our platform, within audio but also beyond.
For each vertical, we will develop a unique set of software, services, and products and business models that's going to be tailored for that specific ecosystem. Again, all of these will live in one consumer experience. While we aren't ready yet to share the verticals that will come next, I don't think it's hard to imagine how we will deploy this proven playbook against them, ultimately winning market share and innovating to expand the categories we go after. To put a fine point on it, this machine we're building really enables us to continue to bundle these verticals and business models into a single consumer experience. That benefits users, creators, ad partners, developers, and Spotify itself. Each vertical we add also enriches the consumer and creator proposition, and it allows us to increase our margin over time with our fourth foundation, marketplace products.
This makes our model more and more accretive. This then allows us to increase the LTV per user because we are upselling on our existing base. As long as the LTV per user is positive and our gross profit grows, we will have more ability to invest to further strengthen our market position. Our team will share more today on how we think about optimizing LTV and our plans to reach long-term profitability. I'm not aware of any other company who has been successful in taking a multi-business model and multi-vertical approach within one user experience. We're much further along on this journey than you might think, and I have a tremendous amount of confidence in our ability to succeed. What does then success look like?
Well, we will firmly cement Spotify as the home for some of the greatest artists and creators and educators in the world. That gets us to that coveted position of being the world's creator platform, a place where artists and writers and labels and publishers, studios, and creators can come to manage their businesses. With these creators comes more listeners. This then allows us the chance to also become the preferred content platform for users. The place that they choose to listen, to learn, be inspired, educated, and informed, all while establishing deeper connections with the artists and the creators that they love. Lastly, with the world's top talent and hundreds of millions of engaged listeners, this gives Spotify the ability to attract the best brands and product partners.
We will keep on evolving, and we will keep on adding more verticals over time and expanding our business models to allow for more types of content and let artists and creators monetize them. This is the Spotify machine, and this is the new definition of Spotify that I hope you will reorient yourself around when you think about our business and build out your models. To summarize, looking back at the best companies, think names you're all very familiar with. They are vastly different companies today than when they started. They might have made their initial mark in one specific category, think, books, search, desktop computers, and they then used that to redefine the way we think about those categories by expanding their potential through innovation. These companies didn't stop there.
They continued to expand and build on these strong foundations, applying their learnings and leveraging their customer bases to move into new categories, ultimately broadening their value proposition. As a result, they built more resilient businesses. This is the exact same journey we're on. We've moved from being a music discovery and playback service to a fully-fledged platform where artists and creators can create, engage, and earn. A platform fueled by subscription, advertising, and creator service models applied to music, podcasts, audiobooks, and more. Today, it's really all about giving you all a much deeper understanding of where we've been, where we are, and where we're headed, and why. In the next couple of hours, you'll hear more details from our team about what this Spotify machine is capable of.
Next, Gustav Söderström, our Chief R&D Officer, will share more about our consumer experience and why we think we're uniquely positioned. He's then gonna hand it over to a few others who will take you through the verticals in much more detail so that you can get a better understanding of each one, how they work, and what they mean from a growth margin and revenue perspective. You'll then hear from Alex Norström, our Chief Freemium Business Officer, who will walk you through how we plan to get to a billion users, and he'll also share additional details about the potential of our revenue generating model. Lastly, Paul Vogel, our CFO, will talk you through how all of this translates into our long-term financials. Then, I'll be back with a few closing remarks, and then we'll be happy to take some of the questions.
With that, please welcome Gustav Söderström to the stage.
Thank you, Daniel. Hi, everyone. I'm Gustav Söderström, Chief R&D Officer. I lead the R&D team at Spotify, overseeing all product and technology for both creators and listeners. Daniel just walked through our history and evolution over the last few years, and he also talked about Spotify's future. Now, I'd like to take you even deeper into that future from a product point of view. As you just heard, our business model is indeed quite complex. Fortunately, user research shows us that the Spotify listener experience is actually quite the opposite. It's simple. To listeners, there is nothing complex about it. That's why my team exists, to hide that complexity and give users a single intuitive experience that brings them all the world's audio in a relevant and personalized way.
Today, I want to walk you through that single user experience and what assumptions and decisions we made that are different from most other companies, and why this approach allows us to evolve, adapt, and scale across multiple content verticals. I'll then explain how we optimize the whole experience across these verticals using machine learning in a manner that I think is quite unique to Spotify. Let's start with the consumer experience and the bet we made, a bet which has proven to be successful over the last few years. For context, most tech media companies don't operate multiple consumer models nor multiple business models. They typically have a single consumer format like video or music or podcast that's paired with a single business model, like subscription or ads or à la carte.
Only a few companies operate more than one consumer format, often in separate apps or tabs and as separate internal business lines, ultimately creating totally separate experiences. This approach sort of exposes the internal complexity of the company and its business lines to the end user. It asks the user to adapt to the software instead of the software just adapting to the user. At Spotify, we chose to do it differently. As Daniel alluded to, when we entered podcasts, we were strongly advised to follow the status quo, and instead of creating an integrated app, we would create a standalone podcast app because that would be easier for us as product and design people. We asked ourselves, "Why should the user have to adapt to the format by switching software? Shouldn't the software adapt to the user?" That's what we built, an adaptive user experience.
Practically, this meant that we integrated podcasts into Spotify's main app, and then we worked to build a user experience and interface that automatically adapts to introduce new podcasting features dynamically that music doesn't require. These could be features like a 15 sec skip, episode bookmarks, or adjustable playback speed. This was harder for us as a technical challenge to build this dynamic UX, where the same home feed, the same search, and the same now playing view automatically adapt to the content type. We quickly saw that this approach was not only easier for the user, it also increased the reach for all creators, meaning that podcast creators could now reach music listeners and music creators could now reach podcast listeners. The value that this brought to users and creators outweighed the challenge it presented to our team.
We also quickly re-recognized that this strategy unlocked significant business value. First, it gives us the ability to leverage our scale and distribution. New creators on our platform are able to access the entire combined user base across all the formats, and this drastically expands the market for these creators, as Daniel explained. Secondly, it also allows us to use our existing infrastructure when we're laddering up into new verticals, not just on the back end, like personalization, but also on the front end in the actual application. Finally, it increases engagement and lifetime value on our existing users as they also adopt these new formats. First, let's look at scale and distribution.
From day one, this single user experience strategy enabled podcasters on Spotify to tap into the existing music audience, which at that time was already 200 million listeners, instead of what would have been zero listeners in a standalone app. Thanks to our tech research teams, we were even able to take Spotify's much loved personalization features and adapt them to podcasting in a way that predicted which podcast a user might like based on their music preferences. We also learned that podcasts didn't cut into music listening time, but instead actually increased overall time spent on the platform, ultimately allowing us to double down on our own user engagement. This meant that Spotify wasn't simply competing for a slice of the existing, and honestly back then rather small, podcast pie.
Instead, we were able to dramatically expand the entire market for podcasts, and as a result, we eventually became a leader in the space. Since then, we've added more and more functionality to this adaptive user experience software to make it more and more versatile. It can now automatically adapt to a video podcast with, you know, the full screen caption controls that that format requires. Which again, allowed us to start with what is now 300 million potential video viewers instead of zero in a separate video app. We added paid podcasts as another format, like with Sam Harris or Ben Thompson. Again, letting them start at scale instead of in a separate paid podcast app somewhere.
This integration of free and paid formats is not only good for Spotify and for consumers, it is also great for creators as it helps them reach and convert their free podcast audience to paid subscribers seamlessly and effectively. Now, this is obviously the same freemium model that Spotify itself already uses, but for each individual creators. Now we're taking those learnings and laddering up into a new vertical with yet another content format, the audiobook. This means that we're identifying and introducing new features that podcast listening and music doesn't require. On the surface, this might seem simple as audiobooks are a lot like podcasts, but there are critical differences. For example, audiobooks have chapters, not episodes, so you will always want to listen in chapter order instead of to the latest episode.
While you might want a recommendation for episode 10 of a podcast you've never heard of because maybe it talks about specific guest or topic you like, you probably don't want a recommendation for chapter 10 of an audiobook you've never heard of. Doesn't make any sense. Instead of asking the user to switch apps or tabs or software, we've taken on the task of integrating audiobooks into the same Spotify user experience. Again, optimizing for the user. This allows us to take what is today a relatively small market of audiobook listeners paying à la carte and expose it to more than 400 million potential listeners. We can also, again, use our powerful tools that tell us what podcasts you like to determine what kind of audiobooks you might want to listen to. For example, fiction, nonfiction, or mind bending mysteries, or educational science or something.
These tools help us make relevant recommendations to people who have never listened to an audiobook before. This is another example of how this single experience strategy not only helps listeners easily discover, but also helps drastically expand and increase the reach of creators into new customer segments. As we continue to adapt across content verticals, let me show you what this single multi format feed will look like. That includes music, podcasts, video and audiobooks.
[Presentation]
Okay. I've now shared how we think of Spotify as a scalable infrastructure that allows us, creators and consumers to systematically benefit from our previous investments as we enter new verticals like audiobooks. A very important part of that infrastructure is, of course, our personalization engine, which is shared among all of our content formats.
Investments in this space allow for the personalization engine to get better and better as new formats are added, ultimately giving us a better understanding of every user and how we recommend to them. To a large extent, the value of a service like Spotify is directly related to how much a consumer feels like that service helps them discover new things. I want to spend some time on this area specifically. Users tell us that Spotify's recommendations fit them perfectly, that it's almost like magic. We've been investing in this recommendation engine since the early days of music. Now we've reached a level where we can provide a personalized and unique experience for every listener. In music, we are honored to be considered best in class.
We're already utilizing this infrastructure to support the same individualized experience across podcasts to build a better understanding of what you, as individual consumers, really want to listen to across both of these verticals. It works for music, it works for podcasting, and we know it will work across all verticals. W hat we've built is something that's repeatable, scalable, and that compounds. Let's look at some numbers. Four years ago, we had 10 billion artist discoveries every month on Spotify. Today, there are 22 billion of them. This is an exciting data point because we know that discoveries lead to real connections between artists and listeners, which is what ultimately drives value for those creators. Nearly 2 billion artist discoveries turn into connections, which we define as a degree of fandom.
This helps artists increase their fan base, their reach, and ultimately the success trajectory of their careers. On the podcasting side, over 100 million connections were made between users and new podcast hosts, and nearly half of those were driven by our recommendations or programming. While our strategy on the front end is a single seamless consumer experience, on the back end, we're taking the opposite approach, recognizing that each format music, podcasting and audiobooks has different creator needs, audience expectations and business models. This is why on the back end, we've chosen to build distinct and separate software stacks and teams deeply integrated into these different industries and optimized for each creator group and business. Let me bring back up the visual of the Spotify machine that Daniel mentioned.
Now in music, for example, the business model is based on the stream share of a royalty pool that requires massive custom integrations towards labels and publishers and so forth. Podcasting, on the other hand, is a very different business model, driven mostly by advertising and direct creator upload, such as to Anchor. Audiobooks is yet another distinct creator group with yet another dominant business model today, a la carte, where users pay per item. It requires more custom software integration to support the publishing industry like the audiobook company Findaway, which Daniel mentioned earlier. As you can see, on the back end, we've taken different and complex business verticals, and we're approaching them individually to deliver the best creator experience, tools, and business opportunities for each industry and creator group. In just a moment, we'll give you a deeper look at these three verticals we've been building out.
Before I hand it over, I hope you'll take away a few key ideas on our overall product approach. First, our strategy to adopt a single consumer experience enables us to accelerate our entry into new verticals and formats. This allows us and creators to capitalize on a compounding user base rather than several separate ones. Second, behind the scenes, our strategy is to build dedicated back ends that super serve separate industries, different business models, and different creator groups. This enables us to both power the world's biggest music creator stack today, the world's biggest podcast creator stack, and soon, hopefully, the world's biggest audiobook creator stack. Finally, as we add new verticals into our single consumer experience, we continuously increase the lifetime value and retention of our existing users as well.
Now we're going to hear more about the music vertical, but let me first leave you with a quick clip of how Spotify connects artists to fans.
[Presentation]
Like Camilo said at the end of that video, Spotify can be life-changing. I'm Charlie Hellman. I'm the vice president and head of music product, and my team is working to help enable those life-changing moments. I'm excited to share with you how we're working with the music industry to build the best proposition for both artists and music fans. It's important to remember that first and foremost, Spotify is a music company. All of our music team strategies ladder up to two primary goals, making a unique and superior music experience for fans and creating a more open and valuable ecosystem for artists. These two goals really complement one another, which is clear to see when you look at the playlisting ecosystem we've spent the last decade defining and perfecting. Whatever your mood, your style, whatever the occasion, Spotify has something for you.
As Gustav mentioned, Spotify drives around 22 billion discoveries a month. On top of that, 1/3 of all new artist discoveries happen on personalized algorithmic playlists. Listeners love this exposure to new music, as well as the personalized touch. Discovery is our bread and butter, and it's driving a level of engagement that no streaming service can claim. According to a recent report from Apple, in the U.S., iPhone users spend over 50% more time on Spotify than our next closest music streaming competitor and more than double the time on Spotify than the rest of our competition. In markets like the U.K., Germany, Australia, the gap between Spotify and other streaming services is even larger. More time spent on Spotify means greater customer retention, driving more subscriptions around the world and expanding our advertising inventory.
Since Spotify and rights holders share in the same pool of revenue, our incentives are aligned. Our personalized playlisting experience drives an incredible amount of listening time on Spotify, and this in turn presents enormous opportunities for more artists around the world to find a fan base. There's far more shelf space on Spotify today than there's ever been in any record store or any radio station, meaning that revenue opportunities now reach far beyond the biggest stars. Consider this: over the past two years, 150,000 artists have been added to a Spotify playlist for the first time, and that can be a career-making moment.
In 2021, for the first time ever, more than 50,000 artists generated more than $10,000 from Spotify alone, which likely means over $40,000 across all sources of recorded royalties. That's a far cry from the music industry of the past, which favored superstars twice as much as it does today. At the peak of the CD era, 25% of U.S. sales were accounted for by the top 50 artists. In 2021, only 12% of U.S. streams on Spotify were from the top 50. Spotify has fundamentally changed the music ecosystem, democratizing access to audio for listeners around the world, lowering barriers to entry for artists, and allowing an increasing number of artists to succeed.
Before I go into our marketplace business, which focuses on building tools and services for artists, I'd like to invite Sulinna Ong and Madeleine Bennett up to the stage, who are gonna show you how artists are crossing borders and finding fans in what were previously unlikely places.
Thank you, Charlie. I'm Sulinna Ong, Global Head of Editorial for Music.
My name is Madeleine Bennett, and I lead the Global Music Content Strategy for Spotify.
The music industry is rising back to peak levels, driven by streaming. In 2021, streaming revenue alone exceeded total recorded industry revenue in each year from 2009 to 2016. While physical sales have fallen dramatically, streaming and other sources of revenue have carried the industry forward. The recorded music industry is expected to be a nearly $80 billion business by 2030. Alongside the shift to streaming, another exciting trend has taken shape. Listening has become far more diverse. This means continuing tailwinds for a broader array of artists at all stages of their career.
Spotify has opened the floodgates, enabling artists from markets who historically might not have had much opportunity in the music business to captivate a global audience. Many are finding success. A case in point, of the artists generating $10,000 or more a year from Spotify, 34% live in countries outside of the top 10 music markets.
Artists from an increasingly wide variety of cultures are bringing new people to Spotify to listen, to share, and to connect. We are by far the most global platform, the most tapped into local scenes, and the most capable of developing opportunities for artists at scale. No other streaming service is better positioned to identify, amplify, and help shape culture than Spotify.
In 2014, the way that music traveled on Spotify was mostly a transatlantic affair. At that time, Spotify was available in just over 50 countries, and this map shows how streaming traffic was primarily focused between our U.S. and our European markets. In the years since, we've expanded into more than 100 additional markets. We've made dramatic improvements in our playlisting and promotional capabilities, and by honing our ability to recommend the listener's next favorite song regardless of language, we have helped to spread music from markets like Puerto Rico, South Korea, and Colombia all around the world. The result? Here's that same map for 2021. This is the difference between 60 million users in 50 markets and 422 million listeners across 183 markets. Now imagine this map in 2030.
We will see a kaleidoscope of activity, tens of millions of artists, a billion listeners, leveraging the power of Spotify to tap into music culture and connect to a borderless global audience. Let's go one step deeper and show you how Spotify helps an artist go global.
The next big hit can come from anywhere. In recent years, no genre has traveled quite as far as K-pop. Top K-pop songs often ignite first in North America, Indonesia, the Philippines, Brazil, and Southern Europe. After about a week, interest spreads to East Asia and the rest of Southeast Asia. Two to three months later, we'll see the peak in key Latin American and South African markets. They broaden out to a more mainstream audience in the U.S. and Canada. How does something like this happen? The music always speaks for itself, but we also have our fingers on the pulse, and when something is bubbling, not only is Spotify there at the outset, we also know how to fan the flames. This year we rebranded our genre flagship playlist, now called K-Pop ON!.
We introduced it to a broader global audience, driving more than 9 billion K-pop streams per month. Because of our efforts, more than half of K-pop streams now come from outside of the Asia-Pacific region. It's playlists like this that are helping to propel artists to new audiences around the world. Korean artists aren't the only ones connecting with new audiences.
Let's take a look at what's happening in Puerto Rico. Streaming has helped Latin artists break through to the global mainstream like never before, and as a result, the Latin music industry is predicted to surpass $1 billion in U.S. revenue for the first time this year. While there are many Latin artists who have landed on the global stage, one artist sits in a class of his own, Bad Bunny. For the past two years in a row, Bad Bunny has been Spotify's top streamed artist globally. With the release of his new album, Un Verano Sin Ti, he achieved 183 million album streams in the first 24 hours, making him the most streamed artist in a single day.
One of the many reasons that Bad Bunny's album connected with so many fans is because Benito and his team partnered with Spotify on an effective strategy. Together, we made the album available on demand to our free tier users for a limited time. This free on-demand capability captured the attention of a far broader global audience. Fans were hooked. All 23 of the album's tracks debuted in the top 30 of Spotify's daily global songs chart, and Bad Bunny took up nine of the 10 top slots. To top it off, this album drove hundreds of thousands of new users onto our platform. Artist partnerships like these are the key to our continued platform growth.
Now let's take a trip across the Atlantic to Africa, where last year Spotify significantly expanded its presence by launching in new territories. It wasn't long after that we began seeing breakout stars from places like Nigeria, South Africa, Ghana, finding audiences in the U.S., France, Philippines and beyond. Spotify helped facilitate this cultural exchange, supporting the explosion of African music every step of the way. From day one, we've championed Fireboy DML's Peru, as well as Finesse by Nigerian producer Pheelz. We've introduced Wizkid and Tems to an international audience through our network of playlists across the world, including today's top hits. Through our marketing campaign for African Heat, our flagship playlist, we've partnered and celebrated the music of Focalistic, Lady Du, Olamide, and more.
We are not only supporting the hypergrowth from the region through editorial coverage and industry partnerships, we're also the first global music streaming service to have a notable presence in continental Africa. We have a team of local employees fully immersed in the local culture, and never before has the African music industry connected with a global audience at this scale. We're just getting started.
That's what sets us apart from our competition. We are the preferred destination for artists because we help to take an active role in achieving their dreams, partnering with them to think outside the box, and working together to help them succeed. Our local teams on the ground see early indications of a trend, and our worldwide strength allows us to showcase these on a global scale. By unlocking the ability of any artist from anywhere in the world to connect with listeners everywhere, we are tapping into a potential market of billions of people. With that, we'll pass it back to Charlie, who will share more about the tools that we're building for the modern music business. Thank you.
Thanks, Madeleine and Sulinna. As you can see, the music industry is changing fast. There have never been fewer barriers to entry, and that's enabling more and more talented artists to be discovered. Songs can break out in hours. A fan base can emerge in days. Careers can take hold in weeks. Many artists are even seeing success with just a release or two. With this reduction in barriers comes an increase in the number of artists seeking success. We're in the midst of an explosion of creativity where tens of thousands of songs are uploaded each day, and that rate of daily uploads has doubled in the last two years. In this rapidly growing landscape, artists need an evolving toolkit that works for the millions who will make up tomorrow's music industry, one that mirrors their creativity and ambition by offering speed and scale.
In 2017, we launched Spotify for Artists. At the time, it was purely an analytics product, a powerful free resource for artists and their teams to better understand their audiences. Today, Spotify for Artists is an integral part of every professional artist's toolkit. Since I talked to you in March of 2018, the number of artists using our Spotify for Artists product suite on a monthly basis has increased more than six times. In fact, today, 83% of our platform streams come from an artist using our creator tools at least monthly. This is the top of the funnel. This is the foundation where we make all of our tools and products available for artists and their teams. At Spotify, we've built our end to end proposition for artists by directly addressing the core needs that artists have.
To enable artists to express themselves, we need to give them ways they can stand out and show their creativity. To help artists turn listeners into fans and super fans, we need to give them the most powerful tools to promote their art. Of course, artists ultimately need to earn a living. Not only is Spotify the biggest single source of revenue in recorded music history, providing over $7 billion in 2021 alone, we're also committed to unlocking new ways for artists to monetize their audience. Now, let's get into how we're helping artists grow their fan bases. One of the reasons we're the go-to destination for artists is because we uniquely provide them with a core set of valuable free resources, useful for any stage of an artist's career that helps them get the music in front of the right fans.
For example, we let all artists have the opportunity to pitch their music to our playlist editors. We also let artists control the visual expression around their songs and their artist profile on Spotify, allowing them to express themselves beyond the music and drive more engagement. All of these features and more are freely available for artists and completely self-service. In addition to these free tools, we've also invested in building the most performant and effective commercial tools for promotion in the streaming era. Because there's so much being added to Spotify every day, artists need tools that will help them stand out, now more than ever. We're uniquely positioned to deliver effective promotion for artists for a few reasons. First, unlike, say, social media marketing, our promotion tools reach people that have already actively made the decision to open up Spotify and listen to music. It's contextual.
Our ability to target listeners based on their listening activity, their taste, is second to none. Further, we have the unique ability to actually report back how many people listened to or saved the music as a result. Our ability to deliver the best promotion offerings for artists represents a tremendous opportunity, not just for Spotify, but for each of the over 3 million unique artists who released new songs in the past year, as well as the growing number of artists releasing today and tomorrow. Let me tell you a little about how far we've come with these commercial promotion services since we first previewed this business line for you. Let's start with how we help artists connect with new listeners in personalized listening sessions, which we customize for each and every user. These include playlists like Discover Weekly, genre mixes, radio stations, and autoplay.
In 2020, we introduced our Discovery Mode program, which is powered by algorithmic promotion and is loved by those who have tried it. In fact, from Q1 2021 to Q1 2022, Discovery Mode had 98% customer retention, illustrating the appeal of the product. That includes a broad array of over 50 labels and distributors that in turn represent hundreds of thousands of artists, everything from relatively unknown to global superstars. In early testing, artists that have tracks in Discovery Mode increased their listenership by over 40%. Almost half of that growth comes from listeners who had never listened to the artist before. One of the most attractive aspects is the cost structure. There's no upfront cost to participate. Instead, Spotify only charges a commission on recording royalties the track generates in those personalized listening sessions.
This gives artists at any stage of their career, regardless of the size of their marketing budget, access to the same resources as the biggest stars in the world. This is a stark contrast to the music industry of the past, where only the biggest stars with major marketing budgets would have had access to the most effective marketing tools. We're really only at the beginning of the Discovery Mode opportunity. It's not yet available at scale to artist teams around the world or as a self-service tool. With no upfront budget required, there's significant potential for adoption. We're also hard at work expanding our visual native ads for music promotion. Because we can reach all of our users in the place where they're actually listening, these ads perform far better than other places where labels spend their digital marketing dollars.
That leads them to routinely increasing their spend after they try out the tools. Marquee is our full screen visual sponsored recommendation of artists' new releases. We recently expanded access to it by rolling out a self-serve buying experience in the U.S. right from the platform people are already using Spotify for Artists. As a result, from Q4 2021 to Q1 2022, we doubled the number of new customers while maintaining an 85% retention rate from existing ones. In Q1, revenue grew 224% year-over-year. The reason we're seeing such meaningful engagement is because of the tremendous impact the tool has for artists. On average, people who see a Marquee are twice as likely to save songs from the promoted release to their playlist.
That means listeners aren't just streaming the music when they see the notification, they continue to engage with the artist, demonstrating real potential for long-term fandom. Artists that leverage Marquee for their new release saw three times the lift in listeners for the rest of their catalog. That means Marquee isn't just sparking interest in that release, it's inspiring fans to revisit older releases, multiplying that artist to fan engagement. It's important to remember that so far we're only targeting listeners in 12 markets. As you know, Spotify is available in 183, so there's plenty of room to reach new listeners and expand marketing spend on Spotify. Where do our promotion products go from here? Well, these products are still in their early stages with plenty of room for growth.
We're working closely with our partners across the music industry to innovate on these promotional tools, identify new opportunities, build new formats, and target different segments of listeners. When it comes to promotion, no one can match us on format, our ability to target, or on reporting of measurable results. With a user base that's well on its way to 1 billion listeners, Spotify continues to be the most important place for labels to market their music more efficiently. In addition to helping artist teams promote and grow their audience, we're also focused on helping them earn in more ways. Today, Spotify has helped drive incredible progress in the revenues artists are generating off their music. We're proud that we're the biggest contributor to the recorded music industry, and thus far, that's largely been revenue driven from streaming music royalties.
We know that when it comes to fans spending on artists, there's lots of untapped potential. Beyond music, touring and merch are significant pieces of the equation, and we think there's a huge opportunity to help artists drive more demand by seamlessly including them into the Spotify product experience, which is already the most powerful audience engagement platform in the world. We're building solutions for both artists and fans, all while growing new lines of profit for both artists and Spotify. There's a ton of investment in this space from non-music companies to help creators get paid. Just like in music promotion, we have some pretty unique advantages. First, Spotify has the right context. Fans come into Spotify expecting a music environment where they can engage deeply with artists, so offers like ticketing and merch, they're expected. Second, Spotify has the data.
We own, we see, we drive the full fan funnel from passive artist discovery all the way to super fandom, and we see all the data that comes with that journey. Spotify serves customers on both sides of the marketplace. For a lot of fans, Spotify is the primary way that they interact with their favorite artists. For many artists, Spotify is where they have their largest audience, and investing in their presence on our platform is vital to driving their career. We're already capitalizing on these unique advantages. For instance, we integrate listings from top ticketing platforms to sell concert tickets at scale within Spotify. Our Fans First program uses Spotify data to identify and reward the artist's most passionate fans with an exclusive offer like advance access to concert tickets, exclusive merch, or an invite only event.
To date, the program has generated more than $300 million in revenue for the music industry. Also, we recently enabled artists to sell merch, vinyl, other offerings directly to their fans on their Spotify artist pages through a custom integration with Shopify. Now, while we're investing in helping artists sell more physical goods, we also know that monetizing super fans is about more than that. We wanna open up ways for artists to directly interact with their audience, creating meaningful engagement and monetization opportunities. For starters, we're exploring how we can leverage our live audio feature, Spotify Live. One new experience is exclusive live audio rooms hosted by the artists with their top Spotify fans. In these intimate spaces, artists can celebrate a special musical moment, like a new release, and earn revenue by selling merch, promoting concert tickets, and receiving tips all inside the live room.
We're learning about the best ways that artists can engage and earn in this format, and even seeing positive signals on streaming impact long after the event is over. We're currently testing this with a select diverse array of artists, and our early results are promising. In a lot of ways, these monetization businesses are where our promotion businesses stood a couple years ago. Early stage, but with huge potential. Just like our promotion businesses, we expect to build for scale. As we diversify revenue streams for artists and identify the best ways to increase spending from a user base that's well on its way to 1 billion, we'll further enrich artists, even outside their rapidly growing streaming royalties and deliver margin impact for Spotify.
For the music vertical, our goal is to deliver another strong year of growth as our promotion initiatives scale, and we lean into these new revenue lines. As we build tools to help artists engage, promote, and monetize, we've gone from offering distribution and royalties to providing much more value that can propel an artist's career both on Spotify and off. As we've provided more value, it's generated value for Spotify too, as these marketplace businesses have been the primary factor in growing our music gross margins. Given the strong growth rates, this revenue will continue to be the primary driving force to help us further improve those margins. This means we'll continue to grow what we offer to artists and fans so that Spotify expands to be not just a licensed music service, but a platform for artist expression.
Not just playlists you hope to get on, but the most important and reliable marketing platform to develop an audience. Not just streaming income, but the place where artists monetize fans through multiple revenue streams. Our marketplace vision is coming to fruition. We're the only music streaming service this committed to helping artists and bringing more money into the industry. We're driving a stronger business for Spotify that will only increase as we scale these opportunities. Thank you for your time. I'll now pass the mic to Maya, who will kick things off on the podcast front.
Thanks, Charlie. Hi, everyone. My name is Maya Prohovnik, and I'm the Head of Talk Verticals, overseeing Spotify's creator tools across podcasting, video, and live. You just heard Charlie talk about the creator tools and marketplace that we built out for musical artists, their teams, and their industry partners. Now, let's get into how we're applying that experience for a broader set of audio creators. As you heard from Daniel, in 2019, when Spotify decided to move beyond music and become an audio platform, Anchor joined the band and drove massive growth for the podcast business and industry around the world. Through our two-sided strategy of having the best content and the best creation tools in the world, Spotify became the only company to have a critical mass of both podcast creators and listeners on the same platform. Now, think about how far we've come.
In just under four years, we've gone from having virtually no podcasts on platform to being a global leader in the market. To put this in perspective, when Anchor joined Spotify in 2019, there were fewer than 500,000 podcasts on the platform. Today, there are over 4 million, and Anchor powers more than 75% of them. Those millions of shows being published to Spotify from Anchor are often being made by first time creators. As those creators make their content, they share it with their friends and family off platform. The results, on average, every new Anchor show brings 2.5 additional MAU to Spotify. Between Anchor and our other hosting platform, Megaphone, Spotify powered shows account for 45% of all podcast consumption on platform.
With that critical mass of both creators and consumption in the same ecosystem, we're able to do something that has not been possible in nearly 20 years, actually innovating on the podcast format itself. Think about it. Podcasting has been around for almost two decades, and it's remained largely unchanged, mainly because of the limitations of RSS. We've been able to replace RSS for on-platform distribution, which means that podcasts created on our platform are no longer held back by this outdated technology. This has opened up a new world of opportunity to add features and formats to the podcast listening experience that have never been possible before. Spotify is now not only differentiated by our catalog of content, but also by delivering a truly superior product for podcast listeners and creators.
One of the biggest results of this innovation has been our evolution on the format of podcasting itself. A common pain point we hear from creators is that they wanna use music in their shows, and they have no idea how to do that legally. This is especially painful for creators who wanna make shows about music. One of the reasons this is so complicated is that there's no simple or fast way to pay out musicians or labels for songs that are streamed in podcasts over RSS. In 2020, we began testing a brand new format we call Music and Talk, which makes it possible for creators to include any music track from the Spotify catalog in an episode, and for music rights holders to get paid in the normal course when their tracks are being played as part of the Music and Talk episodes.
All of this is only possible on Spotify, and it's available now to all Anchor creators in North America, Europe, Latin America, and Asia. Another new format we've introduced to our users is video podcasts. Up until a few years ago, most podcasts were recorded in a studio with hosts and guests in the same room gathered around a few microphones. When COVID hit, podcasters had to produce their shows in a whole new way. Instead of recording together in person, they started using tools like Zoom and Riverside to capture podcasts remotely. One of the benefits of this new approach was that it made it easy for podcasters to capture videos of these remote conversations, and many of them started turning their audio podcasts into video podcasts.
As a result, we've seen a dramatic shift in podcasting as more and more consumers are actually watching their favorite podcasts, not just listening. This means they've started to expect podcasts to include video. Now, creators can upload video podcasts directly to Spotify from Anchor. It's just as easy as publishing an audio podcast. The best part, our great features for audio podcasts work with video too. Consuming this content is incredibly convenient on Spotify. Seamless backgrounding and foregrounding not only saves users bandwidth and money, but it also gives them the ability to pick up where they left off on any device. Another way we've been able to innovate on the format, we've made podcasts more interactive, finally enabling a deeper, more intimate connection between creators and their fans. One of our favorite things about podcasting is the unique connection it enables between creators and listeners.
It's intimate. Host voices are directly in listeners' ears. Until now, podcasting has been a one-way street. Creators publish shows and their audiences listen. Traditionally, RSS has been limited to anonymized, aggregated analytics, and even those are limited to what can be determined from IP addresses. Because of these limitations, fans have never had a good way to reach their favorite creators directly. Now, we're changing that. Our first way of addressing this was with Q&A and polls, both text-based questions that can be posed by the show's creators and surface to listeners in the Spotify app. These interactive features make it easy for listeners to engage with the people behind their favorite podcasts and for creators to hear from their audience directly on Spotify. These features are available now to all Anchor creators around the world.
We've heard from many creators that Q&A and polls have been crucial in helping them develop engaged audiences that keep coming back for more. This is just the beginning of our interactive tools for podcasts. We're really excited to introduce lots of new ways for creators and their fans to connect with each other. That direct relationship, the engagement between creators and listeners, is also at the core of the live audio offering that Charlie mentioned earlier, Spotify Live. Spotify Live makes it easy for the top podcasters to live stream audio to their biggest fans, so creators can reach their listeners where they already are. That immediacy and intimacy allows creators like Alex Cooper, creator of the popular Call Her Daddy podcast, to engage with their fans in new ways and at many more touchpoints throughout the day.
Thousands of fans participated in her first live room, and the engagement was incredible. As you can see from her reaction afterwards on Instagram, she was blown away. Another one of my favorite examples is how powerful Live has been for sports fans. They've been able to go deep with their favorite creators, like the team at The Ringer, right after the NFL Draft, NBA playoffs, or the Champions League final. Now, finally, let's dive into an incredibly important area where we've been able to innovate and truly make podcasting better on Spotify, new monetization opportunities for podcast creators. Those of you who've followed us over the years know that a huge part of our mission at Spotify is enabling creators to live off their art. One of the ways we get there is by making podcasting more profitable for more creators.
As Daniel shared, we wanna give creators the most control over how they grow and manage their individual businesses. We've developed a few different offerings to help creators earn more. Let's start with advertising. Ads have long been the financial backbone of the podcast ecosystem, but it hasn't always been a viable option for most creators. Back when Anchor first started thinking about this problem, only the top few podcasters were able to make money. We set out to develop tools for every level of creator, so anyone who creates a podcast can participate in some form of advertising monetization. In the last month alone, over 90,000 podcast creators have made money on Spotify. We're continuing to improve this adoption by building and expanding a variety of advertising options for creators. You'll hear much more about our advertising offering in just a moment from Dawn.
We're very excited to innovate on the podcast advertising model, including making monetization a reality for more creators than ever. Part of how we plan to accomplish that is by offering non-advertising monetization options too because we know it's important for all creators to be able to choose the business models that work for them. One thing we've heard from many podcast creators is that they wanna be able to establish a direct relationship with their most loyal fans by building their own subscription businesses. In 2021, we rolled out a paid subscription platform for podcasters, unlocking the ability to put either a whole show or select episodes behind a paywall. Since then, we've taken this feature global, providing access to creators in 34 markets. Podcast subscriptions have already unlocked a meaningful revenue model for many creators who've enabled it.
Because of the tight connection between creators and their fans on Spotify, the on-platform average subscriber retention rate we're seeing since launch is 90%. Even after launching podcast subscriptions, we were still missing one key piece of the puzzle. The core of Spotify's benefit for listeners is that they can hear all of their favorite audio, both music and podcasts, in one place. There was a lot of paywalled and subscription audio content that wasn't available on Spotify. We built a better way for people to manage all of their audio subscriptions in one place, and we call it Spotify Open Access. Open Access provides customers who are already paying for exclusive content off-platform the ability to connect their existing account to Spotify, so they can easily find and unlock their content on-platform.
Let's say you're a subscriber to Pushkin+, the premium subscription offering from the folks behind hits like Malcolm Gladwell's Revisionist History. Now, subscribers can simply link their Pushkin+ and Spotify subscriptions and manage all their listening on Spotify. So far, we've partnered with over 100 publishers and platforms from some of the world's top voices. We're actively expanding this list, and we're very excited to share more developments soon. Bottom line, we want Spotify to be the best place for creators to grow their audience, connect with their biggest fans, and build their businesses. We wanna be their partner as they make their journey from listener to hobbyist to enthusiast to professional. Now, let's go deeper on podcasts.
[Presentation]
Well, hello, everybody. My name is Dawn Ostroff, and I'm Spotify's Chief Content and Advertising Business Officer. I wanna walk you through how we've taken key learnings from our number one position in music to become the industry leader in podcasting. It began when we saw an opportunity and set out to seize it by buying three of the premier podcasting studios, Gimlet, The Ringer, and Parcast. We then combined them with our own growing global studio operations. Our goal was to build a foundation that would allow us to transform and expand the industry. That deliberate approach began with investing in top tier original and exclusive content, or as we call it, O&E content, in order to create real value in four ways. First, we leverage exclusive programming to attract existing podcast listeners from other platforms and bring them to Spotify.
We also utilize this tentpole programming to introduce non-podcast listeners to the medium for the first time. Most importantly, we use it to engage music-only audiences already on the platform, which levels them up to become music and podcast listeners. Second, it serves as powerful leverage with hardware platforms, many of whom are our competitors. Ask any voice assistant to play Call Her Daddy or Armchair Expert, and if they don't have Spotify, they'll likely have countless unsatisfied users. Third, the excitement around our premium content also attracts blue-chip advertisers, many of whom try podcasting advertising for the first time, and then the results keep them coming back. Finally, hit originals create a cultural halo effect for Spotify, keeping us front and center with audiences and creators. That's why we make top-tier original, exclusive content. This is a worldwide strategy.
It begins with teams immersed in their local cultures, working with creators in 17 markets. These markets are in constant communication and learn from one another, so that when the right hit show comes along, they can collaborate across borders. This is where Batman comes in. Created in partnership with Warner Bros. and DC Comics, Batman Unburied marks a powerful step forward in scripted audio. Our teams around the world worked with local actors and creators to authentically adapt the core script into nine different local language versions. This meant that fans who speak German, Hindi, or Japanese all got to enjoy Bruce Wayne and The Riddler in their native tongue. The results speak for themselves. We delivered a worldwide hit. Our success in global programming goes beyond Gotham City.
Our original and exclusive shows account for 15 of the top 100 podcasts on Spotify, a significant achievement, given that we produce or license only 1,000 of the more than 4 million podcasts currently on the platform. Six of the top 10 shows are Spotify exclusives. In addition to Batman, we have five other top 10 O&E shows. Sitting in the top slot, The Joe Rogan Experience, hosted by the only podcaster on Time magazine's 100 Most Influential People list. Even though it's exclusive to Spotify, it's still the number one podcast in the world. Next up is Armchair Expert with Dax Shepard and Monica Padman, a massive hit with audiences, but also a darling with advertisers.
The third is Call Her Daddy, which has leveraged Spotify's production, booking, and marketing resources to make a show that was already wildly popular into a full-blown Gen Z and millennial phenomenon. As of May, it's a top five podcast globally. Host Alex Cooper has tapped into Spotify's video capabilities, which has nearly doubled the audience from her audio-only episodes. The reality is, The Joe Rogan Experience and Call Her Daddy and other shows like it are creating both listening and video habits in the U.S. and around the world. That brings us to Germany and two more of our six largest shows, Gemischtes Hack and Fest & Flauschig. Germany is a critical market for the medium and one of the first countries where we launched original and exclusive podcasts. That's why it's the place where the maturity of our investments are furthest along.
As a result, Spotify exclusive series account for four of the top 10 in Germany, with two of those in the global top 10. All of this success is a testament to these extraordinary creators, and we're constantly on the hunt for new voices who can break through and really move culture. That's why we're following Batman Unburied with a string of new shows from DC Comics, as well as the first series from Kim Kardashian, Archetypes from Meghan Markle, the Duchess of Sussex, the English adaptation of our Spanish language scripted hit series Caso 63, and the terrifying first series from Jordan Peele's Monkeypaw Productions. We invested in creators at every level and across all genres, and to date, we've committed more than $1 billion to podcasting. This has allowed us to dramatically improve the consumer experience and grow the total audience through differentiated content.
As Daniel mentioned, while this investment has created a short-term drag on our business, it brings with it significant long-term growth. In 2021, we generated close to EUR 200 million in podcast revenue. We expect this to increase materially in 2022. While we're still in investment modes, our bet in this space is already starting to pay off, beginning with improvements in ad products and in turn, monetization. Going forward, we believe podcasting in itself will be a $20 billion opportunity. You'll hear more about how we see our podcast business growing into a higher margin vertical later today. First, let's look at how we've already moved the podcast industry needle. A few years ago, everyone underestimated the opportunity and the impact that we could have on growing the overall pie.
Before we entered podcasting in 2018, the annual ad spend in the U.S. was approximately $480 million. At that time, it was projected to hit $1.1 billion in 2022. Today, podcasting is expected to exceed $2.1 billion in 2022, almost double the initial projections, representing over 300% growth since 2018. The U.S. ad market is expected to double by 2024, reaching $4.2 billion. We also know that bringing podcasts and music together are especially powerful when it comes to audiences. Since 2018, we've gone from less than 7% of listeners on Spotify spending time with podcasts to 30% of users listening monthly. Users who listen to both podcasts and music listen twice as much as users who only listen to music.
In the U.S., when we bundle music and podcast advertising, the average size of the spend on a campaign is four times that of a music only campaign. We're driving bigger spends from advertisers and growing our revenue significantly. This upside is expanding as we continue to transform podcasting into a more mainstream entertainment medium. To summarize, under one roof, we have the best creation workflow, the best distribution, and the best discovery process, connecting an ever-growing audience with the world's best content. In the years ahead, that powerful loop will encompass more than a billion users, and with billions of revenue at play, that opportunity is what will drive the entire podcasting industry forward and increase Spotify's margins. It all begins with a single experience, which brings me to audiobooks. I'm going to pass the mic to Nir Zicherman.
Thank you, Dawn. Hi, everyone. I'm Nir Zicherman, and I'm the global head of audiobooks here at Spotify. As you've just heard, since we announced our ambition to become the world's leading audio platform with an expansion into podcasting, Spotify has not only become a leading platform for podcast creators and listeners, but has also expanded the very format of podcasting itself. Podcasting was a medium that hit a ceiling due to technical limitations. As Maya explained, our tools changed that. By introducing streaming technology to podcasting, Spotify has helped create audio experiences that simply were not possible before. Now it's time to take that same approach to a new frontier, audiobooks. Annually, books are a $140 billion industry, and it's our belief that audiobooks can be a much larger part of that.
Audiobooks are a massive opportunity for Spotify, because while they represent just a 6%-7% share of that larger industry, the category is growing by 20% year over year. We believe this presents a really unique opportunity to introduce music and podcast listeners around the world to audiobooks and drastically expand that market. Our platform will soon be a place where consumers can purchase and listen to their favorite audiobooks right in Spotify. This initiative also offers a great opportunity for creators. Authors and publishers around the world will soon be able to introduce audiobooks to Spotify's global audience of over 422 million users. Just as we've done with podcasting, this will introduce a new format to an audience that has never before consumed it, unlocking a whole new segment of potential listeners.
As you heard, at the end of 2021, we announced our intentions to fully dive into the audiobook space with our acquisition of Findaway, a powerhouse in audiobook distribution. Findaway works across the entire audiobook ecosystem with a platform and offerings that serve authors, publishers, and consumers. We see overlapping opportunities to not just grow the industry, but also significantly innovate and transform it. As was the case with podcasting in 2018, there has long been just one major player in audiobooks, which we know doesn't fuel or drive innovation. Just by entering the space and coming to the field, Spotify will be pushing the industry forward, bringing our fresh take on what the audiobooks experience can be.
We will provide the tools and the resources needed to lower the barriers to entry and to enable creators to find an audience so that we can rapidly scale and expand the audiobooks market overall. To achieve that plan, we plan on amplifying the growth of Findaway's platform offering, currently called Findaway Voices. Findaway Voices is a platform that connects independent authors and publishers with independent voice actors. After pairing the two, the platform fully manages the production and distribution process. This creates an exciting new channel of scaled creation within the Spotify ecosystem for distribution on Spotify and other platforms. Keep a close eye on this space, and we'll share developments with you as we build the future of audiobooks. We've been sharing these plans with authors, publishers, and many others across the industry, and there is a lot of excitement about what's to come.
Thanks so much for your time, and now I'll pass it back to Gustav.
Thanks so much to both our talk and music teams for that in-depth run through. In just a few minutes, we're going to take a 15 min break. Before we do, I wanted to first introduce you to one more concept that will kick off the second half of this presentation, which will focus on how we're optimizing the business. As you just heard, our behind-the-scenes strategy to build dedicated backends to serve separate industries, business models, and creative groups is well on the way and performing exceptionally well. This focus on a dedicated backend for each industry paired with our single front-end experience for users is what has enabled us to be the largest music streaming subscription service in the world and the most used podcast service in many markets around the world, including here in the U.S.
It is our hope that we'll soon be leading the audiobook service as well. We're incredibly proud of this progress, and we're confident in our ability to repeat and scale this strategy over the next decade. Now that you've heard how the technology and content from different verticals come together into this single consumer experience across multiple business models, a natural question you might have is, how do we actually optimize the business across these verticals when there's the potential for wildly different business outcomes depending on which piece of content the consumer clicks on? It's a tricky problem. Now, this goes back to the metric Daniel mentioned earlier, lifetime value, or LTV for short. You'll hear more on this approach after the break from Tony Jebara, Head of Machine Learning, Spotify. Let me give you a little introduction.
We think about lifetime value as the value of a consumer over their entire lifetime on the service. It's the best representation we've found of how much value Spotify provides to consumers and creators. We've spent years building advanced machine learning models that estimate and predict the lifetime value of every combination of a piece of content and a user on the platform across all the verticals every single day. It's important to note that this is not an attention economy where content competes for the user's attention in the moment. It's actually something quite different. It's a value economy where the content competes to give users the most long-term value that makes them want to stick around for as long as possible. This is what we predict and optimize for.
Each month, users vote, many of them with their wallet, if they think we've done a good job or not. We believe that this approach avoids a lot of the traps of the pure attention economy, enabling us to create greater value for consumers, creators, and for Spotify. Taking a step back, we're not just using machine learning to power recommendations, we're also using machine learning to optimize the very company itself. With that, let's take a short 15 min break before we invite Tony to the stage to share more detail on LTV. Thank you.
Hello, everyone. My name is Tony Jebara, and I'm Head of Machine Learning at Spotify. You just heard Gustav discuss the evolution of our platform to distribute multiple verticals in a single machine learning powered user experience. I'm gonna spend a few minutes talking about the basic three pillars of our company, creators, consumers, and monetization, and how we are broadly growing all three. Number one, growing the most creators and content, from music, to podcast, to audiobooks. Number two, growing the most consumers across countries, plans, and cohorts. Number three, growing the most monetization for those creators using ads, à la carte, subscription, marketplace, and monetized fandom. As we scale these formats and business models, there are more and more things on our platform competing for consumer and creator value.
You might say, "Whoa, this sounds like a lot of complexity," but we've built a machine learning system that now enables us to rein in that complexity and turn it into an advantage. There's this common belief that complexity is bad, and that is because it tends to make the world unpredictable for us humans. While that complexity may be hard for a human to handle, the rise of machine learning has given us new tools that have no problem handling this complexity. Our machine learning models can now tell us which combination of user, content, and monetization gives the most consumer value and the most creator value at a certain time, enabling us to maximize the total value of the platform at each moment. While that may sound great, what does creating value actually mean, and how do you measure that?
Lifetime value, or LTV, is a metric that many of us at Spotify spend a lot of time thinking about, modeling, testing, and refining. We think this is a metric that provides enormous insights into the true value that we provide to consumers, creators, and to Spotify itself. We use this powerful instrument to predict which content yields longer term retention, engagement, and happiness with the goal of maximizing the lifetime value of all Spotify users. While it is still early days, we are using LTV more and more in our business. Our vision is to have it be the primary driver of all our business decisions, as it allows those decisions to be automated, personalized, and scalable, something that wasn't possible before. What is lifetime value? It is simple in theory, but very hard in practice.
It literally means all the future value that you expect a consumer to bring you across their entire lifetime on the service, discounted to a net present value. If you could know that number with a high degree of certainty, you can do very powerful things, such as starting to understand which content and recommendations tend to increase lifetime value, even with content in widely different formats across different business models. You can sum up all the LTV from all the users for a particular piece of content and understand exactly how much that content is worth to you as a business. You could balance your ad load so that the revenue you gain from the ads doesn't come at a cost of a shorter lifetime. That then increases LTV.
You can even understand how much financial value a specific software feature rollout contributed to the platform. Doing all this in practice requires instrumenting and encoding the entire company and software, from user behaviors and ad sales forecasts to content contract costs. This is a huge endeavor that we took on a few years ago. Before LTV, we spent years focused on growing the number of users and how many months they would stay on Spotify. We call this lifetime growth, which is closely related to MAU growth, and it is now growing at a great clip. Here's rankings from the third-party measurement company Antenna, which uses anonymized transaction data to track subscription services. You can see Spotify has the absolute lowest churn of any music streaming service. We're really pleased with where they've placed us within the broader market.
We spent years getting rid of the leaks in the bucket through better content, personalized programming, and personalized experiences. Now we can reliably predict retention, acquisition, and even a user's future lifetime on the service. We base this on their dynamic consumption behavior and static things like the country that a user is in. Today, on top of lifetime, we're also layering in the financial value each user brings to the business and its creators. We measure value by their gross profit contribution. LTV elegantly unifies the concepts of profitability and lifetime into a single metric that can inform our decision-making. We're actually forecasting each and every user's lifetime and also each and every user's lifetime value.
We're doing this for each and every user, including our premium subscribers, our free users, and users that convert between the two plans. As we learn and back test, we expect huge opportunities to iteratively improve upon our capabilities and precision going forward. Here's a hypothetical example of how our models calculate the LTV of one single user or member. Remember, our forecast is based on what we know about the user today and how they've behaved on our platform so far. These numbers are just for illustration purposes only. First, we have a model that forecasts how long each user will stick around by calculating survival probabilities over the next 60 months. Then we forecast the gross profit they will generate each month.
Specifically, we forecast the gross profit from things like ads by also forecasting each user's engagement levels to estimate the music and podcast ad load into the future. Then once we have the survival probabilities and the month's gross profit, we multiply each month's survival probability by the month's gross profit. What we end up with is the expected gross profit over the lifetime, and we discount the expected gross profit by our cost of capital. In this hypothetical example, we can expect this user to generate EUR 67 for the business. As an experimentation metric, the total LTV seeks to answer the question, if we do X today, what can we expect to be the profit X will bring to the business and its creators in the future?
In the table here on the screen, we calculated the average LTV across all our cohorts, across different regions and different plans for music-only listeners. We calculated the relative increase of the LTV of music listeners who we also activated to podcasts. The percentages on the table show the LTV of podcast activated users is much higher relative to music listeners. What's interesting is that the LTV of users who we've activated to listen to both music and podcasts is consistently higher across every region and every plan from free to premium. This is just one example. How do we keep on increasing LTV? We plan to repeat what we just did with podcasts by adding audiobooks to the platform.
Again, we hope audiobooks will increase our user base's LTV by another plus X percentage points because audiobooks should grow their lifetime multiplied by their value because it's helping retain users and it's increasing our gross profit. We don't wanna increase lifetime at the expense of gross profit, for example, by dropping prices. We don't want to increase gross profit by doing something that a user might accept in the moment but not enjoy in the long term, like cranking up their ad load or recommending lower cost content that isn't right for them. Both could negatively impact their lifetime on the service. A well instrumented LTV metric aligns you with your consumers and your creator partners and keeps you honest. If we have users generally loving Spotify and retaining better and engaging better, you increase the months they spend on the platform.
If we improve things like advertising and we layer in audiobooks and podcast paywalls and some of the marketplace work that Charlie was describing, we increase total company ARPU and margin. Then you take the product of those two things and say, "Okay, I've taken someone who's gonna stay for 14 months and made them stay for 18 months. I've increased their lifetime." We also improve the margin profile. If the margin profile for that user is EUR 0.8 a month today, but I can increase that number to EUR 1.40 per month by shifting the user's consumption mix so they generate more margin for longer, I've basically taken this user's LTV and more than doubled it. We remain careful to increase the margin without reducing the lifetime of a user.
The beauty of growing both numbers together is that our algorithms are also doing smarter things. For example, they don't want to show our users spam for a quick buck today if it will hurt their lifetime and hurt their future total LTV. We're not going after just instantaneous clicks and engagement like some other consumer facing or ad tech companies. We're thinking about every decision 1,000 times a second, 24/7 to grow the user and the business together for the long term. We recalculate the LTV of each user at Spotify based on how they are behaving and engaging on the platform right now, and we've integrated those tables across most business units at the company. You could think of the total forecasted LTV summed across all our users as approximately the total value of Spotify.
Now with an understanding of the math behind LTV, you're likely asking, "What are some of the future applications of this, and what are the implications for Spotify's business?" We're already using LTV to improve marketing, product, and content decisions. Through our models, we're also improving acquisition, retention, ARPU, and even gross profit across the business. Let me share a few examples. Over here, LTV is used to estimate the total or average value of users in a cohort for marketing purposes. L et's say Nina, a marketing exec, wants to know how the average per-user value of a cohort of users acquired through a campaign compares to the average value of the Spotify population. W e look at many channels and compare our marketing spend across them and become smarter about which channels are giving us the best incremental LTV.
On this next slide, we're looking to understand long term financial outcomes from our A/B tests and our recommendation algorithms. In this hypothetical example, Frank's product area runs A/B tests on new user facing features. He wants to know if a new algorithm that promotes podcasts that are retentive and habit forming is more valuable to users than the old algorithm. He sees that the LTV of the users who tried the targeted, more retentive podcasts went up by EUR 0.32 . Frank knows this is a better algorithm, and he rolls it out for all users across the world. In the third example, we're starting to understand how a piece of content, like a podcast or an album, contributes to our future LTV.
For example, Julie, a leader on our podcast team, can make things like season renewal and promotion decisions based on the content efficiency of each podcast. We run tests on some of our podcasts to help Julie know which ones generate more LTV per hour of streaming. We found that clickbait content manufactured to fool users and algorithms can actually decrease LTV, and so we should never promote that content to our users. Now we know which shows in particular we should acquire and renew to grow the LTV of our users and overall business.
In this example, we can look at a podcast like Alex Cooper's Call Her Daddy and say, "What is its LTV impact to the business divided by how much it costs us to acquire the show and to promote it?" We will focus only on renewing shows that really have a great return for the business. Here's a snapshot of the data we use to track the cost efficiency of many of our podcasts. In summary, LTV is a powerful instrument that, number one, allows us to forecast the profitability of experiments and other initiatives and understand their potential impact on our bottom line. Number two, it promotes a thoughtful approach to investment in innovation and content.
Number three, it predicts which content and experiences yield longer term retention, engagement, and happiness, all of which are essential for Spotify to reach our goal of 50 million creators and 1 billion listeners globally while also ensuring the business grows. We're making more and more of these decisions automated and letting machine learning basically mediate human creativity to quantifiably grow the total future LTV of the business. That is the Spotify machine. Thank you. Now it is my pleasure to introduce Spotify's Chief Freemium Business Officer, Alex Norström.
I'm Alex Norström. It is so cold to be here today. That's a slip. In the studio it's so cold. Of course, I'm meant to say, I'm Alex Norström. It's so good to be here today." I'm Spotify's Chief Freemium Business Officer. I'm responsible for the subscriber business, global markets, marketing, and payments. I'm here to expand on our plans to build a much bigger business than the one you might have imagined, beyond just music subscription business. Right now, we are on track to more than double our reach to over 1 billion users. With our vertical platform strategy, over time, our ambition is to build the business toward an annual ARPU of EUR 100. This means, on average, looking at both free and paid, we can significantly increase the total revenue across our entire user base. Our music business is the foundation to this story.
It is how we've built our relationship with users, and it is what has allowed us to expand geographically all around the world. Today, we'll share how we plan to expand user and revenue generation from this strong music streaming base into new verticals, podcasts and beyond. This expansion into new content verticals will build bigger and more engaged audiences for creators, and it will create new content experiences for users. As you will see, it will enable revenue growth opportunities. Before we dive into the growth of our business, let's take a step back. What's our operating playbook? Or maybe even more simply put, how do we drive this Spotify machine that Daniel and the team have been talking about today? It starts with the value proposition.
With our freemium model, we have created a value proposition for different stages of the user life cycle, introducing users with free and then layering the different subscriber offerings on top of it. Secondly, we work on maximizing user intake. Once you're on board, our personalization kicks in. Importantly, we make sure you can use our service on the devices you use throughout the day. This deepens engagement and retention. As we scale reach and engagement, we unlock growth for our advertising business. This drives ARPU. As engagement grows, we're able to improve subscription growth, whether a free user moves to premium or a premium user upgrades to a multi-account plan. This is what expands our monetization and subscriber base. Yet again, it further improves engagement as users move up the ladder.
This is a fantastic flywheel. The fifth step is that we open up for à la carte purchases, which means that you can subscribe to specific creators or buy things one off. This uncaps ARPU. We then go back to step one and bundle in a new vertical, rinse and repeat. We did this three years ago with podcasts, and when introducing a new vertical, we adjust the offering where necessary to maximize our user growth and revenue opportunities. In most instances, we add to our existing propositions, which is super powerful. Anyone can cross-promote, but as Gustav mentioned earlier, our big difference here is that we do it on top of a super scaled base of users and their existing engagement. That's the playbook. How does this pay off in terms of revenue?
Well, you just heard Tony talk about lifetime value, how personalization increases engagement, and how verticals drive gross margins. I will focus on users, ARPU, verticals, and geographies today. Let's talk about geographies for a minute. Our geographical markets are at different stages of growth. For a super scaled platform, there is no such thing as a one size fits all. We have tailored growth plans for truly global business in 183 markets. Another cool thing is that by addressing the opportunity in this way, there's a powerful compounding effect as we improve each component in the equation. If we make changes in the product experience of a vertical globally, it means it is beneficial for geographies all around the world. If we improve monetization locally, it has benefits to all local verticals locally.
With regards to monetization and ARPU, there are two important factors to consider. One, the pretty unique and advantageous fact that we have always invested in multiple ways to monetize, whether it be subscriptions, non-recurring transactions, or ad sales. This stacks our ARPU. Two, as we add more verticals, this stacks our ARPU even further. In this chart, we have hypothesized the potential monetization mixes for verticals just to give you a sense of what this might look like. Let's spend a little bit more time on each area to really give you a sense of where we're going. Since our last investor day in 2018, we have continued to expand Spotify geographically. We are now available in 183 markets around the world.
With 422 million users, Spotify is by far the largest audio subscription streaming service in the world. There's still more room to grow. Although music is universal, the geographies we operate in are distinct. They represent an incredibly diverse range of cultures and consumer habits. It's a complex job driving a truly global machine, but in this complexity, there's beauty. For any given country or region, the music streaming paradigm and the industry starts at different points in time, and each may move at a different pace. In the U.S., Western Europe, and in Australia and New Zealand, streaming is the standard way to listen to music. In these markets, we are the clear leader. In Latin America, we're well on our way.
In the Middle East, Africa, and Asia, some of the world's largest total addressable markets for music, we are just getting started. As you heard from Madeline and Sulinna, artists from these markets are connecting with our listeners globally. For the purposes of this presentation, we will split the world into two groups: established and emerging markets. First, let's take a look at our music business in the established markets. Our user growth in the more established markets has been spectacular and put us in a clear leadership position. We now reach nearly 1/3 of all addressable consumers in the U.S., Western Europe, Australia, and New Zealand. As we grow our users, advertising sales grows. Dawn will be talking more about the fantastic opportunities in this space shortly.
In the U.S., the growth has been fantastic in the last few years. Advertising is now almost a quarter of our revenue, compared to one-tenth globally. We can see where this is heading. Our subscriber growth has also been phenomenal. We have leading market share in paid users, and we are double the size of the nearest competitor in almost all of these markets. We've also proven over time that we can manage down the churn of these subscribers, and this happens as the base scales, but also because we apply two downward-facing pressures. Engagement increases over time, and B, we improve the available subscription options. Now, as you saw from Tony, reducing churn is critical in growing lifetime value. As free users convert, subscribers upgrade, and the ad business scales, the ARPU increases.
We see plenty of potential to further increase ARPU in these established markets. To reach a mega-scaled audience, we cannot ignore the emerging markets. These have the most populous TAMs in the world, and the TAMs are naturally gonna grow as more of the world continue to adopt smartphones. As you can see here, we've got traction, but we've only scratched the surface. MAU over TAM is about 8%, so clearly we're in the early stages of applying our playbook. For the purposes of today, we are calling LATAM, the Middle East, Africa, and Asia our emerging market set. First, let's take a deeper look at Latin America. We are close to having 100 million users in the region. MAU over TAM is 20%, and the engagement is fantastic. We've also seen that our subscriber proposition has started to gain serious traction.
With a 60% subscriber market share, we have a strong lead. The ads market is also showing signs of improvement. There is no ambiguity here. LatAm is clearly moving in the direction of the established markets. Our operating model is working. India is earlier in its journey but showing strong signs, and in the last two years we have raced past all competition, and we are now the clear number one music streaming service in India, judging by engagement. As engagement grows, our playbook momentum continues to increase. With the explosive growth in brand awareness, we are also on our way to being the market leader in podcasts. Zooming out again. We can see that the way we're driving our machine is working. We've come a long way in the established markets.
Engagement is phenomenal, and we have more than a third of music industry market share. This is because of the phenomenal strength of our subscriptions business and our fast-growing ads business. Looking ahead, the emerging markets are on a path to follow the established markets. User growth is already strong with a TAM that is almost five times as big as the established markets. We will continue to innovate across our propositions, tailoring our playbook to the needs of the regions to maximize our user and revenue growth opportunities. To sum it up, we are on a path to hitting over 1 billion users globally by 2030. Our playbook is working around the world.
I'd like to welcome my colleague and dear friend, Dawn Ostroff, back to the stage to spend a few minutes demonstrating how our growing ads business will add to our total ARPU. Dawn?
Thank you, Alex. Okay. I am excited to be back to talk to you about Spotify's advertising business, the progress that we've seen thus far, and the massive opportunity ahead. Spotify has proven time after time that when we put our energy and focus into innovating an industry, we succeed. You've heard about music and podcasting and how Spotify can leverage data from one vertical to improve the results in another. This rests in our powerful direct relationship with our 422 million users. Now, let's talk about a key engine behind our advertising business growth. As we've always said, the opportunity is bigger than many realize, and that's because audio advertising has historically been undervalued, especially compared to the exploding consumer engagement in this medium. Digital audio consumption has been on the rise for years, and ad spend is finally starting to follow this growth.
Since we last spoke to you in 2018, we've tripled our ad revenue across music and podcasting, and we've established an entirely new business with podcasting, growing it by 10 times since 2019. We started to globally scale our self-serve ads manager, Spotify Ad Studio, and all of this has helped to make Spotify part of the elite class of $1 billion+ platforms. We've achieved this growth by leveraging our rich expertise in streaming to rapidly modernize audio advertising, and we're continuing this revolution by focusing on three key product areas, streaming ad insertion, Spotify Audience Network, and reinventing the audio ad experience. Let's begin with streaming ad insertion, or SAI. This delivers the intimacy and quality of traditional podcast ads but solves the limitations of RSS and downloads that Maya mentioned earlier. I'll explain.
SAI is able to record an ad impression in real time as soon as the ad starts playing. For the first time, podcast advertisers can receive insight into confirmed ad impressions, and now they know their ads were actually heard instead of just crossing their fingers based on downloads. SAI unlocks valuable first party audience data and insights, delivering the most rigorous targeting and reporting available in podcasting today. Next, we established the foundation of the Spotify Audience Network, also known as SPAN. SPAN is our audience first advertising marketplace that makes it possible for advertisers to connect with listeners across a broad range of podcasts. Through this network, we use our powerful first-party data and variety of targeting solutions to enable advertisers to reach audiences at scale. This means that they're able to reach a target audience across thousands of shows rather than targeting an individual show.
Here, we're leading the charge to revolutionize podcast ad buying. SPAN was born out of our acquisition of Megaphone and strengthened by our more recent acquisitions of Podsights, Chartable, and Whooshkaa. That flywheel of having more creators adding more content to our network means more listeners, who will in turn attract even more advertisers. This is what makes SPAN so powerful, allowing us to grow our podcast advertising revenue by many multiples. It's been in the market for just over a year, and it's already delivered major results for Spotify and for publishers. We recently invited eligible Anchor creators in the U.S. to join SPAN, and in the future, we'll be adding music inventory as well. Third, we've started to innovate on the ad experience itself to make it more interactive for users and thus more impactful for advertisers. One recent example is Call-to-Action Cards.
Powered by SAI, this format makes it easier for users to engage with promo codes as they listen and offers advertisers an even more direct way to measure campaign success via clicks. We see this format as the foundation of future ad experiences in podcasting, music, and beyond. Imagine shoppable ads, polls, and brand Q&As. As Daniel has previously said, gone are the days of ads accounting for less than 10% of Spotify's total revenue. Advertising is now poised to become a key growth driver. Over the long term, we expect ad revenue to be significantly more than EUR 10 billion annually. As Alex just explained, we're seeing very strong user growth across the world, and Spotify's ad machine stands ready to unlock huge value for creators, publishers, and advertisers.
In some of our largest markets, including the U.K., Germany, and Japan, we've just scratched the surface, and we see a significant opportunity to implement and improve monetization in emerging markets across Latin America, Africa, and Southeast Asia. In order to capitalize on this, we've been scaling our international sales and support teams and launching products like Ad Studio, SAI, and SPAN in these markets. We've also deepened Megaphone's footprint in Europe, Australia, and Canada, signing up some of the largest publishers in these regions and bringing them into SPAN, expanding our proven flywheel internationally. As we fully realize our international investments over the next couple of years, we expect to see higher margins and faster revenue growth. Next, we're upleveling our measurement offerings. This will help advertisers understand the value of their spend and, in turn, increase demand.
We're doing this most notably through our acquisition of a leading podcast measurement service, Podsights. Now, Podsights offers an advertising attribution solution that is built specifically for podcasting. The product allows advertisers to attribute podcast ad exposures to actions taken on advertisers' websites or app, helping them to better understand their ROI. Long term, we intend to extend Podsights capabilities beyond podcasts to music. We're also preparing to launch a dynamically priced auction for a segment of audio ads. Here, we're enhancing our self-serve Ad Studio. We'll introduce features that advertisers have grown accustomed to on other platforms but with a Spotify spin. Today, we have tens of thousands of advertisers on Spotify, with the majority of our ad revenue coming from the larger brand enterprise category.
By making it possible for advertisers to buy based on desired outcomes across music and podcasts, we'll begin to increase our stable of SMB advertisers. In turn, this will unlock bigger lower funnel media budgets like direct response, a part of advertising currently missing from audio. If you look at this comparison, Spotify's ad ARPU, relative to some of the digital ad industry, you see why we're so excited about the potential of this upside. We're also starting to explore how we can increase our supply of inventory to meet the incredible demand that we're seeing. We're looking at bringing ad monetization into audiobooks, video podcasts, and unlocking more ad supported music listening as we continue to innovate across our free tier. We'll have more to share on that in the future.
To summarize, with our deeply engaged audience, our logged in global audience, medium defining content, and innovative technology, Spotify is the perfect platform to match the right advertiser to the right listener at the right time directly in the Spotify app. We're on track to do this for millions of advertisers across the globe. Because we have direct relationships with our users, we're less encumbered by the tracking headwinds affecting the digital ad industry. These efforts will play a critical role in driving Spotify's powerful mixed revenue model, and as you can see, we believe we have an opportunity to grow our ads ARPU by several multiples. Now I'm gonna pass it back to Alex, who will tell you more about Spotify's growing array of verticals. Alex?
Thank you, Dawn. It's so exciting to hear our plans for the advertising business. This will naturally continue to raise the ARPU stacks around the world. The power is in having multiple business models in our machine. When you look ahead, the outlook is positive with our subscription, advertising, and à la carte business models playing in concert to generate more revenue for the company. We believe the music streaming market alone has room to grow from $30 billion to nearly $80 billion by 2030. Analysts, they agree with us. As the market grows, we will grow. The most natural companion business to music streaming is live experiences. Post-pandemic, fans are clamoring to see their favorite artists live, and venues are steadily coming back. The live market is expected to be worth $40 billion by 2030.
We see this as a natural extension of Spotify's existing music business. Because of our scale, the data advantage we can offer to partners, artists, and venues is powerful. This is a potential area to grow total ARPU significantly. We don't stop there. As you may recall from earlier, the last step of our playbook is to bundle new verticals into our value proposition. We clearly see the chance to add more reasons for people to stick around and spend more time with Spotify. Our current business provides a strong foundation to enter new categories, and we're well on our way to making those categories new verticals. Just like the challenge of putting out a hit second album, people doubted if we could add podcasts alongside music. Now we know the answer. About a third of our listeners listen to podcasts, and we are the global market leader.
Looking at where this is going, we will soon have hundreds of millions of podcast listeners on Spotify. This speaks to the power of our scale and the unified experience. We see podcasts becoming a $20 billion global opportunity by 2030. If you take the growth of music streaming over the next 10 years and then extend it with live experiences, and then you add the rapidly growing podcast market on top, we believe we will expand our total market by more than four times where we are today, going from $33 billion-$140 billion. What I'm saying here is that this bundled offering, monetized by our three modalities of revenue, will double our total ARPU over time. Not only will the market expand, but the revenue potential of each user, each Spotify user, will expand as well.
That's the size of the opportunity before we even enter into any new verticals. Let's look beyond this. In the next 10 years, there are additional markets and verticals that we believe are natural fits for our platform and audience. There's audiobooks, there's news, sports, and education. Those are vast markets that we can imagine Spotify playing in. There are a couple of common threads to these examples. They are big consumer markets, sometimes much bigger than music, and there's a secular trend in these markets being massively evolved by the internet and software. We have an opportunity to consolidate users' habits and purchases to Spotify and also expand the pie, allowing broader and more convenient access to these new content categories. Take audiobooks. Today, it's a niche market. With our enormous user base, imagine the potential.
With our monetization modalities, our LTV optimization, we can ensure that users get access to the right content at the right price at the right moment. We believe there's a golden opportunity for an audio first platform like Spotify to add value in these categories. As we consider the combined market size of these additional verticals, we think of our future opportunity as 10x. Now that you understand the opportunities ahead, let's zoom in on consumer spend or the general ARPU levels for some of the categories I just mentioned. We can see that they're an order of magnitude higher than music. They are in the hundreds of euros per year, and these are markets that are big and have high ARPUs. To us, this is incredibly exciting. Within the next 10 years, our goal is to enter and lead two additional verticals.
With this, we will be building towards the EUR 100 and the 4x ARPU that we talked about. I've saved some of the best for the end. It is our super strength, our subscriptions business. We have more than 182 million subscribers. The scale is astounding. We have a recurring relationship with 2% of the world's population. Our premium subscribers are the most engaged, the highest retaining, and the most passionate ambassadors of Spotify. This is rare and it gives us the confidence in our resilience as a business. As we continue to evolve our subscriptions portfolio, we expect to see strong growth in our subscriptions business around the world. This is a function of a strong performance in our existing streaming music offering and the emergence of new types of subscriptions offerings.
The key to any successful cross selling strategy starts with a strong relationship with your customers. It is this unrivaled subscriber base we've built that will help unlock the next set of categories. Well, let me sum up our plan for user and revenue growth. Leading a category like music and winning engagement makes us top of mind with users around the world. As a reminder, we believe we will be over 1 billion users by 2030, more than double where we are now. Our current markets of music and podcasts, coupled with our multiple modalities of monetization and our extension into live, will build revenue growth that will take us to a global ARPU of 2x. We're not stopping there. There are new categories with huge potential still out there. Each of these categories already commands annualized ARPUs in the hundreds of euros.
The combined size of these new categories is in the hundreds of billions of euros. As we expand into these new verticals, we'll deploy our Spotify machine and we'll apply the same growth playbook. We believe this can unlock our full ARPU potential, creating the opportunity to reach EUR 100. This would be 4x where we are today. This is our ambition, and we'll be updating you soon on new initiatives as they are ready for launch. To bring it all together, we believe we have an opportunity to double our ARPU with our current trajectory and quadruple our ARPU inclusive of all of our new initiatives. This is our future. Thank you. Now I'm gonna turn things over to my amazing colleague, our CFO, Paul Vogel.
Good afternoon. Thanks for joining us today. I'm Paul Vogel, Spotify's Chief Financial Officer. Today, you've heard about the reasons for our successful growth since our direct listing, and hopefully you've also gotten a better feel for the significant opportunities that lie ahead. I'm going to spend the next 15 mi on how that growth has impacted our KPIs and financial model, walking through updates to the various metrics and showing how everything you've heard today sets us up for strong and profitable growth. First, I wanna remind you of what we've achieved since our direct listing. As you've heard, when we went public, we were a music streaming company, and it wasn't immediately clear how the landscape would evolve or which companies would emerge as winners.
Since then, we've expanded beyond music to become the leading player in audio with over 400 million monthly active users, roughly two and a half times compared with just four years ago. Our subscribers have grown at a similar rate, topping 180 million. That growth has been consistent. Since going public, we have met or exceeded our guidance ranges for both users and subscribers over 90% of the time. While our growth has been very strong, some years we lean more on user side and other years we see more strength in subscribers. That is the beauty of our freemium model. The two parts work hand in hand to deliver long-term growth for both. The consistency of our performance is a testament to the foundation of the strategy we laid out to you four years ago, ubiquity, personalization, and freemium.
This continues to differentiate our positioning in the market. This foundation has also been a key driver of the steady improvements we've seen in retention and churn, two key factors in our user and subscriber growth. First, looking at Premium churn specifically, we've seen the trend line move consistently lower from 5.5% at the end of 2017 to 3.9% at the end of 2021. Breaking it down further, in our developed markets, we've seen strong reductions in churn declining to 2.4%, with churn as low as 1%-2% in our most mature markets. We view this as a positive indicator for the rest of our subscription portfolio. In our developing markets, churn tends to be higher initially, creating headwinds to overall Premium churn. As these markets mature, they've shown strong continual declines.
In fact, after year three, gross monthly churn has historically reached the same point on the churn curve as developed markets. Looking at ad-supported users, we have seen retention improve over 650 basis points from 2017 to 2021. This is a testament to our ongoing investment in the free user experience, helping to drive user engagement, retention, and conversion. Next, I'd like to spend a few minutes translating our user and subscriber growth into P&L metrics. Revenue has grown in line with our user growth, and our gross profit has grown even faster, more than tripling over the last four years. If you exclude the impact of foreign exchange rates, our performance has been even stronger.
On a constant currency basis, revenue grew at a compound annual growth rate of 26% and gross profit at a compound annual growth rate of 35% during the same timeframe. Now moving further down our P&L, operating expenses have grown at a compound annual growth rate of 19% since 2017. If you exclude the impact of social charges, our rate of expense growth has been decelerating since 2019. In 2021, you'll see our revenue growth outstripping operating expense growth. Importantly, although we have incurred losses during this time, we have generated positive operating cash flow in each year, including more than $ 1 billion in cumulative free cash flow, even while investing into new areas like podcasting.
This is a key differentiator of our business and a dynamic you don't see in most direct to consumer entertainment companies. We have a strong balance sheet and strong free cash flow. This has enabled us to finance more than $ 900 million in M&A, while also returning more than $ 600 million in capital to date over the past four years. In light of our strong free cash flow, we've been reinvesting aggressively into our business. You may be wondering how we decide where to invest and how much capital we should commit. As you heard earlier, we are leaning into LTV as a tool to inform key business decisions, and it's helping us achieve better outcomes from marketing, to product, to content, even M&A. Tony highlighted the positive LTV results we're seeing from podcasting, and they also extend to numerous other investments we've made.
Take lyrics, for example. Currently, there's not a lot of revenue associated with this feature. It's mostly an incremental expense. However, since launching globally in November, it has quickly become one of our most used features. W hile the addition of lyrics carries a short-term gross margin impact, we've seen an uptick in user retention across a meaningful portion of our user base, and this points to a positive LTV benefit. When we decided to grow our advertising business outside the U.S., we had a clearly defined model for the revenue uplift and the cost associated to achieve our goals. In the short term, this cost hits our operating expenses before we see the revenue uplift. However, we see this investment, mostly in headcount, as driving LTV improvements.
On a more traditional financial return basis, we expect to generate a strong double-digit ROI from this investment over the next three years. Turning to our financial performance, I'd like to spend a few minutes talking about our music business. Our music business has been a real source of strength, driving strong revenue growth and strong gross margin expansion. This may not be immediately evident in our consolidated results, but make no mistake, we have delivered against the expectations and framework we rolled out at the time of our direct listing. Isolating just the performance of our music operations, you would see that our music revenues, which consists of premium subscriptions, ad supported music, our marketplace suite of artist tools, and strategic licensing, grew at a 24% compound annual growth rate and in line with our expectations on an FX neutral basis.
Importantly, our music gross margins have increased over the same time frame, reaching 28.3% in 2021. This is approximately 150 basis points higher than our total 2021 consolidated margin of 26.8%. When you back out the negative impact of currency movements since 2017, the music margin looks even more favorable at 28.5%. Looking at our progression another way, since 2018, the last year before our major podcast investment, our music margins have expanded on average by approximately 75 basis points per year. At our last Investor Day, we told you to expect gross margins in the 30%-35% range over the long term. This was, and still remains, the goal for our music operations.
As you can see from these numbers, we are clearly on our way. Let me unpack how we've expanded our music gross margins. At the beginning of 2018, we announced the development of our marketplace business, all of the tools and services that Charlie described earlier. Our thesis back then was that providing increased value to artists, creators, and labels, they would see material benefit and so would Spotify. That is exactly what we are seeing today. We've long maintained that our success is not solely tied to renegotiating new headline rates. It's about our ability to innovate right along with our partners to grow a business that benefits both artists and Spotify, and that's what we've done with Marketplace. In 2018, our Marketplace contribution to gross profit was only $20 million.
In 2021, it grew to more than $160 million, 8x the size in just four years. We expect that number to increase another 30% or more in 2022. We see tremendous upside in Marketplace and anticipate that its financial contribution will continue to grow at a healthy double-digit rate in the years ahead. Marketplace is the quintessential example of our approach to capital allocation. There was a significant upfront cost to build and launch these offerings. We saw compelling data which gave us the confidence to double down and invest aggressively against our goals. It may have taken time to build up momentum, but our patience and conviction has paid off, and we're seeing material benefit from our investment. Next, I'd like to spend a bit of time unpacking podcasting.
Our investment in podcasting has fueled both user and revenue growth, but they've also created a temporary drag on gross margin expansion. Taking a step back, one of the dynamics we mentioned early on was that if we were seeing success with our investments in growth initiatives, we would double down. That is exactly what has occurred in our podcasting business. We continue to invest in this vertical because we believe the long-term margin profile will be accretive to our consolidated margins. Let me show you some of the positive signs we're seeing thus far. As Dawn and Tony said, we see that users who engage with both music and podcasts have a higher LTV than those who engage with just music.
Part one, we see the benefits to user retention and churn, and this translates into a clear benefit to LTV. This higher LTV gives us the confidence that the investment strategy is working. The second part of the equation is the impact on our financial model. In 2021, podcasting revenue grew more than 300% year-over-year to nearly $ 200 million. However, this growth came with a $ 103 million negative impact on gross profit. In 2022, that impact will be higher, consistent with the gross margin outlook we communicated to you on our Q1 earnings call. This drag will not last.
Based on our current forecast, we believe 2022 will be the peak in terms of the negative impact on gross margin, with podcast gross margin turning profitable over the next one to two years with meaningful ramp from that point onward. Additionally, our podcast investment should become accretive to consolidated gross margins, i.e., higher than our music gross margins within the three to five year time frame. We are building a massive podcast audience, which is the foundation for monetizing our investments. As of Q1, 30% of our monthly active users engage with podcast content globally, and podcast consumption accounts for more than 7% of all listening hours on our platform. We see substantial headroom for both of these metrics to move meaningfully higher.
Over the next three to five years, podcast listening hours are poised to grow materially on our platform, and we're just getting started in terms of monetizing these listening hours. Only a minority of podcast time spent was monetized by us in 2021, either through our O&E inventory or monetizable SPAN impressions. In fact, of the 7% of listening hours coming from podcasts, approximately 14% are currently monetized by us on a global basis. As Dawn laid out earlier, we are hard at work expanding our capabilities here. Now, moving forward, I will walk through the high level expectations for our financial results in the intermediate and longer term. To be clear, for us, the intermediate term reflects the next three to five years, with longer term implying the next decade.
Our goal continues to be to deliver 20%+ revenue growth over the long term. When looking at how we will achieve this target, there are a number of factors that should contribute to growth. First, we see continued subscriber growth over the next three to five years, and that growth will be aided by new product SKUs and ARPU initiatives. Additionally, we see significant growth ahead for our advertising business, thanks to a combination of our investments in new product offerings, further penetration on and off Spotify, and growth in both developed and developing markets. All of these factors give us confidence that our advertising business has strong upside. Finally, as we've mentioned throughout the day, we see new verticals as further additive to revenue growth. Now let's look at gross margin.
As we showed earlier, our gross margin, led by our marketplace tools and services, has grown nicely, hitting 28.3% in 2021. Moving forward, we see continued expansion of our marketplace offerings. That, along with other favorable margin drivers, such as improving international ads monetization, should lead to further expansion of our music margin. First to 30% and then over time to 35%. With regards to podcasting, we see podcast gross margins expanding over time for two main reasons. First, we see leverage on the fixed cost content from our O&E business. Second, we see SPAN continuing to grow, and with it a strong gross margin based on the current take rates of the product. Podcasting has two benefits.
First, it will see a significant reversal from a margin detractor to a margin enhancer. Second, as it grows to become a larger percentage of our business, the mix shift will further benefit our consolidated gross margin. Over the next three to five years, we believe podcast margins should top 30%, and our long term view is that this business could reach 40%-50%. As Alex discussed, we plan to launch three new verticals over the next 10 years, with audiobooks being first on the agenda. We see many of our newer incremental verticals as having even better gross margins than our current portfolio. Summing up our gross margins, we see music margins at roughly 30% or above in the intermediate term.
We also see a podcast business that will flip from a drag to a benefit, also topping 30% with upside from there. Based on the current visibility we have on these businesses and other initiatives, we expect our consolidated gross margin to top 30% during this time frame. Over the long term, our roadmap has a number of initiatives that we believe will yield even higher incremental margins. We are building a strong business with significantly higher gross margins. We won't hesitate to invest when we see something big to grow our business. This may cause or create some lumpiness in our margin progression. As you've seen it, our growth is not always linear. 2022 is a great example of this. Hopefully, you now see why we are so excited about the long-term financial model we are building.
What does all this mean for where we're headed with profitability and cash flow? Let's start with operating expenses. As we hit the middle of 2021, we identified a number of initiatives that we wanted to pursue more aggressively. This was mainly headcount in R&D as well as a step up in marketing. The increase in headcount began toward the end of last year and continued into the first part of this year. On the marketing side, we identified a number of markets where we believe we could accelerate our growth to gain meaningful share. With that being said, we are clearly aware of the increasing uncertainty regarding the global economy. While we have yet to see any material impact to our business, we are keeping a close eye on the situation and evaluating our headcount growth in the near term.
When it comes to marketing, the situation will be a bit more fluid. Our long-standing use of LTV to SAC will remain a guiding factor in how and how much we spend moving forward. Historically, we have maintained an LTV to SAC of between 2.5x and 3x . Our aggressive approach to 2022 was potentially going to cross the lower bound of that range this year. Given the current environment, we will be evaluating our level of marketing spend moving forward. That's the short term. Before getting into the long-term expectations, let me walk you through how we think about our operating expense growth. We will invest as much as possible when we see potential to increase LTV. That could be in new users, retention drivers, ARPU opportunities, or activities that increase our gross margin.
Everything you heard us mention before. Secondly, we are focused on a consolidated level on growing gross profit faster than the rate of revenue growth. Lastly, we're focused on remaining free cash flow positive. This is an important metric because it essentially helps you think about how we modulate our investments. With that in mind, looking out over the intermediate to longer term, our expectations for Opex have moderated slightly since our first Investor Day. We now see R&D around 10%-13% staying at our current levels or even potentially increasing, but below our prior long term guidance. Sales and marketing of roughly 6%-7%, and G&A at 3% or below.
If we achieve our gross margin goals, we would expect an operating margin of roughly 10% with the potential for operating margin to scale up significantly as gross margin improves further. As I discussed earlier, we've been free cash flow positive for each of the past four years and expect that to continue moving forward. 2022 will be one of our smaller free cash flow years given the already mentioned investments, but we expect it to be positive. Addressing another question we often get, much of our free cash flow does come from a favorable working capital mix. We think this is an advantage of the way the music streaming market operates, and we expect that dynamic to remain for the foreseeable future.
Regardless, we expect more of our free cash flow to increasingly come from growth in operating income, much like we saw in 2021. We view our free cash flow trend over the next five years as remaining positive and strong, and we expect to generate billions of cash flow over this time frame. We believe the positive and growing free cash flow in our business is somewhat unique in direct to consumer companies. This is a core advantage of our model moving forward. In conclusion, we're excited about the business we are building at Spotify. We have strong momentum with potential for meaningful user revenue and bottom line growth in both the short term and long term.
In coming into this Investor Day, our goal was to detail how we are able to marry our industry-leading product with a strong and growing financial profile. Hopefully you leave today more convinced that we have the team and the plan to deliver growth in users, subscribers, revenue, and margin, and doing so with positive and growing free cash flow. We have never been more enthusiastic about the opportunity ahead. With that, let me turn it back over to Daniel for some closing remarks.
All right. Thanks, Paul. We've laid it all out for you, and it probably comes down to just one fundamental question for any investor. Why should you bet on Spotify? Well, we are running faster, and we're more focused than anyone else in audio. As you could hear, audio and long-form content is a much bigger business than what many would have thought. As a consequence, we're building a model that no other platform is there to attempt. This strategy to ensure our success isn't really just based on one thing, but literally hundreds, if not thousands of things. We think by embracing complexity and using machine learning and technology, that we're making a new type of company possible, a bigger and better company.
We're shooting for the stars, literally and figuratively, and the opportunity out there is massive, and I continue to believe it's ours to win, and we will do so with this machine that we're building. From everything I see, I believe that over the next decade, we will be a company that can generate over $100 billion in revenue annually, and that we can achieve a 40% gross margin and a 20% operating margin. I know this might be very challenging to put in a financial model because frankly, this type of company's never existed before. That is exactly my point. These businesses that never existed before are always the most valuable to have invested in over the long term. This is the Spotify machine, a unique, highly scalable machine that enables a unique platform.
We're accelerating our move from a one size fits all to a much more dynamic and open platform, a platform that will entertain and inspire and educate more than 1 billion users around the world. As the world's creator platform, we will provide the infrastructure and resources that will enable more than 50 million artists and creators to grow and manage their own businesses, to monetize their work and effectively promoting it. Doing this well will also make us more attractive as a home for top and emerging talents. In turn, these services will also improve the gross margin across our portfolio. With every innovation enhancement, we will turn more listeners into super fans, giving a voices to more types of creators and offering our users multiple ways to interact and engage with the talent that they love.
Thank you so much for taking the time to join us today. Now, I'll invite Paul up on the stage again, and we'll take some questions from the audience. Thank you all.
All right, we're gonna start the Q&A portion of today's session. For those in the room today, if you've got a question, please raise your hand and we will get a mic over to you. Also, if you could please state your name and affiliation before asking your question, we'd appreciate it. Actually, first one, let's start in the back. In the white shirt in the back. Right there on the left.
This white shirt or that white shirt?
He didn't say which one.
All right. This is Barton Crockett with Rosenblatt Securities. I was curious if you could, you know, in the past, you've had your former CFO had some very strong commentary about the usage of Spotify relative to the competing services. You know, at that point, it was a more music-focused service. Now you've evolved more into podcast. You're looking at audiobooks. I was wondering if you could give us kind of an updated view of the engagement on Spotify now relative to these other services across the spectrum of categories that you're expanding into.
Yeah. I'll start and maybe Paul can fill in. In one of the slides that we've outlined there, that I think Charlie did, on the music side, based on studies even from Apple itself, we're more than two times the engagement of the nearest service in the U.S., and even more than two times in many other markets around the world. Obviously, when you layer on music and podcasting, that engagement increases even further. We feel really good about where we are, from a competitive set compared to anyone else in the space of audio. We have an even more differentiated proposition than we did back in 2018 when we were just a music service as well.
Yeah, not much more to add. You know, consumption continues to grow on the platform. As we discussed, as we add new verticals, it's been additive to overall consumption, engagement, usage, retention. All of the trends have been really positive from what we've seen.
All right, next question. Let's stay in the back. Wanna go down to Ben.
Thanks. Ben Swinburne from Morgan Stanley. Paul, there was a lot of good disclosure today. A lot of it was new. I'm wondering if you thought about changing the ongoing disclosure going forward, thinking about, you know, core music versus a non-music business, churn, et cetera. For Daniel, do you think you can accelerate the time between entering a vertical and driving significant revenue? I'm thinking about podcasts, and you guys talked. We've done it. You said a number of times, we've done it in podcasts, we've done it in podcasting. To push back a little bit, it's still a pretty small business revenue-wise. I mean, I think you said 7%. You're monetizing 7% of the 14% or 14% of the 7%. It's a very small part of the engagement today.
As you go into audiobooks and other verticals, do you think the company can be faster at going from launch to substantial revenue?
Why don't you start with disclosures?
Yeah. I'd say a couple of things. I think we're committed to giving more transparency with some of these numbers. One of the reasons we wanted to host this day was we felt like it was important to share how well we've done and to kinda you know take the lid off of some of the accomplishments we've had. I'm not sure exactly how we're gonna describe it going forward, but I would say we will give you more consistent updates with how we're progressing against our goals. The other thing we're committed to doing is as we launch new verticals being more explicit about the impact they're having both on revenue and costs.
I think we haven't been as explicit about A, the benefit of Marketplace on the positive and the drag that we've seen from podcasting. We're making the commitment to be more direct and more transparent if we launch more verticals and exactly what they're doing and how they're impacting our business.
Yeah. Just as a response to your other question. I think personally, the biggest leap is the one we already made. Going from music to non-music content was not a leap people expected us to do. Many of these other verticals are more nearby, so I don't think they're as much of a stretch from a consumer mindset to now also start expecting all of these other forms on Spotify. It's important to say that the whole space of podcasting is a small but growing market. That is entirely true. Some of these other verticals that we're now entering into, audiobooks being a, you know, prime example of that, is not.
It is already a very big existing market, and it's a very adjacent area into all of the great innovations we've been bringing onto the platform too. I expect us to lower that time that we bring that to the marketplace. Each pillar of this machine that we talked about, all of these different revenue dynamics can then be adapted and utilized in all these investments we've been making for each vertical too.
Even Marketplace, which is a great example that literally didn't exist the last time we were talking about this, has now grown more than eight times. The formats and functionality that we're building there, and all these great tools expands obviously with the number of creators that are using it, then kind of allowing us to increase ARPU in each vertical much faster too.
All right, great. Actually, right next to Ben while the mic's back there.
Thank you. It's Mark Zgutowicz with Benchmark. I appreciated you guys pulling the curtain back a little bit on LTV and machine learning, sort of dedicated there. I'm curious why pricing wasn't discussed, particularly on Premium. I mean, you certainly are providing a lot more services now, and particularly adding audiobooks into the mix, and we're still sitting at a $10 subscription price. We've seen, you know, other services outside of music continue to raise price and particularly as you think about a more muted demand environment, economically speaking here, you know, why not pull that lever, particularly in your developed markets where nobody's gonna leave Spotify for some other service with a, you know, $1-$2 price increase? Some perspective there would be helpful. Thanks.
Yeah. Why don't I start and then you can take it later. Yeah, we agree. We think right now Spotify sits at an amazing value to price ratio, and that is what gives us the opportunity to over time increase the ARPU too. We definitely think that there's pricing power with this model, and then the more things we're bringing onto the platform, the more value we bring to users, which of course should mean that we have more opportunities to raise price over time. It's absolutely part of our strategy.
Now that said, the reality is we're in a macro environment which is very uncertain at this time, and I personally look at what's happened, say, in the video streaming business, and I wonder to myself whether or not that industry didn't get ahead of itself because frankly, yes, it did increase prices, but it's also now finding itself in a position where it's harder and harder for it to find future growth. In our case, again, the beautiful thing about this LTV metric is that we constantly keep on expanding that and/or gross profit growth over time. It's due to these two dials that we constantly look at all the time, and in some markets that are more developing, we can increase revenue growth by raising prices. In some, it's more around just growing the number of total users.
As Alex outlined, we still, even in our most developed markets, think that we have tremendous amount of user growth left, so we don't find yet that we're at the point where this is kind of all about just going for the ARPU increase on our core subscription business.
Yeah. I would just add, I mean, again, without saying anything really that different, you know, if you look at what we've done in the past, you know, we've continually experimented with different price points, right? We started with a standard plan, then a family plan, a student plan, then a duo plan. We have different, you know, markets in some areas, different pricing in different markets. We have different plans in some markets, we've got, you know, daily and weekly subscriptions in some markets. We actually will continue to iterate and innovate around different pricing and different pricing opportunities. You know, I would say just you can expect that we'll continue to think through this and there'll be more evolution as we move forward.
All right. Let's move up to the front. Maybe if we go to the second row here. The first hand. Sorry, right there to Justin.
Great. Thank you. Justin Patterson at KeyBanc. Two if I can. First to just do a variant of Ben's question from earlier. Historically, when you've entered new verticals, it's been a mix of build and buy. Podcasts, you do a lot of upfront investment. When we think about just these new verticals coming on over the next few years, how should we think about just the go-to-market approach you're doing within there? And then secondly, just around R&D, obviously it's still a very high level for the company. Could you talk about how much is going toward, say, existing product today versus some of these new initiatives down the road? Thank you.
Yeah. Maybe you could take the second question, and I can get to the first.
You want me to take it first? In terms of how much we're spending on R&D now versus on current versus new initiatives? Was that the question?
Yeah.
Yeah. I mean, it's a mix, right? We constantly monitor that. We don't really give out a number on that, but our efficiency continues to get better, and as we get scale and as we get more efficient, you can imagine more and more of our resources each year go to expanding out into the incremental opportunities we have. You know, you go from 60 markets to 183 markets, and you've got to scale up your infrastructure, you've got to scale up what you do from a core business perspective.
That's what's gone on over the last couple of years, and once you get to all of those markets, not surprisingly, we can start to get to a point where the base of what we're doing for kind of what we call BAU, our business as usual, will become, you know, a smaller part of our incremental growth, and then I can dedicate more resources to Gustav so he can invent really cool new toys for everybody.
Yeah. Sorry, I forgot what the first part of the question was.
Approaching new verticals.
Ah.
It's typically been a mix of M&A.
Yeah.
Organic.
Well, I think it really depends on the vertical itself. I think the number one takeaway you probably should take from this presentation today is that we approach each vertical differently. We look at every business model that it has. We look at whether we can play an important role and whether there's consumer appetite here that we can bring to an even larger user base than we did it the last time. While over time, you should expect us to rely more and more on the built-in capabilities we already have internally. Remember in 2019 when we made the podcasting acquisitions, we really did not have a skill or capability internally to build and create our own and original content. Now we do.
You know, as we enter other verticals, if we do need to create content, we have an amazing team of hundreds of people who know how to do that and the experience in doing it as well. That's like a core set of DNA that we decided to acquire for that vertical that perhaps we don't need to acquire if we would enter another vertical. We have been very successful with M&A, generally speaking, as a company, and it's definitely something that we will continue to do when we find either a fit from a technology standpoint that we think we can apply against our distribution base, or as you saw in the case of these verticals, actually, in the three verticals that we outlined and talked most about today, music, that was homegrown with Spotify for Artists. There was no scale alternatives.
We built it from scratch. With Anchor, we took something that was the leader and then supercharged that across Spotify, becoming the dominant player with now more than 75% of all podcasts going through that in Megaphone, which is just astounding. We expect and hope to do exactly the same thing with Findaway when that acquisition closes, which is also another one where we get access to most authors and publishers under one roof, in that too. It's definitely been a successful part of our strategy in the past, and we're always opportunistically looking at doing those types of things when we can leverage it across our base.
All right. We're gonna take questions now, from the front here. We start over here. Rich?
Rich Greenfield, LightShed. Someone responded to something I tweeted about your churn comments and said, "I'll eat nothing but chicken and rice before I cancel my Spotify Premium." It sort of relates to your co.
I quote that we had.
Yeah. I know. I guess the question is to follow up on the earlier question, can you raise price rather than will you? I guess the question is, with competition, is it possible to raise price? Tied to that, there was on that slide with churn, Paul. It did show churn in developing markets picking up in 2021, and you didn't actually comment on it. Could you comment on why and what's going on there? Lastly, just on ad revenue, how fast can it grow? You showed that long-term potential, but how should we think about the cadence of ad revenue, especially in a tougher economic environment?
Yeah. Let me tell you, I'll take the churn one quick 'cause that's a quick one, and Daniel can take the other two. Yeah, you saw a little uptick in developed markets. There's two reasons in that. One is you know, we've launched in all of those new markets in the last year, right? That part of that little uptick is just launching in so many new markets in one year. The second thing is, which is why one of the reasons why we actually don't give out churn on a monthly ba.
On a quarterly basis, we've actually introduced, and Alex can probably speak to some of this, in some of our markets, daily and weekly subscription services, so that actually kind of distorts a monthly churn number when you have daily and weekly subscribers in there as well. We've actually found those daily and weekly subscriber offerings to be really compelling in the markets that we're offering them in, but they do distort a quote unquote "monthly churn number." Those are the two reasons why you see that little slight uptick in developing. Again, if you look at what I said earlier, right past the year three is when we start to see those churn curves basically you know collide where the churn rates are very similar between you know new markets and d eveloped markets.
Yeah. Alex maybe can chime in, but I think when you look at 2020 and 2021 in the midst of the pandemic, we raised prices in more than 13 markets already as it is, and we didn't see any material impact whatsoever on either user intake or churn, which gives us plenty of confidence that we have that muscle should we want to use it. Just to set the expectation, we are deeply looking at the market, the uncertainties with the inflationary environment, all those things, and we feel good about where we are long term, but we are not gonna sacrifice the trust of these consumers that we built up over the past decade.
One addition to what you just said is that there might be some Russia numbers in there in that chart, which is obviously like a one-time effect that takes up churn pretty significantly, but kind of comes down again. You'll see that bump, but then you'll see it coming down. Then with regards to what you just said, Daniel, on pricing power and churn and so on, the reality is we have actually raised our prices specifically for the family plan and the student plan and some of our other offerings, not just the core offering. Right? When we have done that, well, actually, let me rephrase that.
We actually have done it for the core offering as well, where there's been significant inflation, so we kind of had to follow it, like in Argentina, for example, and in Brazil, we've done it as well. When we have done these price changes, the ratio between churn and the additional revenue you get from the pricing increase is very favorable. Very, very favorable. I'll say that.
Advertising growth?
Oh, yeah. Sorry. Advertising growth is, you know, again, it's mostly a function at this precise moment of bringing more inventory online. So, you know, we talked about SPAN. We talked about Ad Studio. We're bringing significant amount of innovation into that space still, and we can still improve targeting. Honestly, I think the key takeaway is audio advertising. No one knows what the perfect format will be. Dawn talked a little bit about that and how we're innovating what that will be, and I think, you know, again, just like it was not clear what text ads would be if that was a big market or not. I think all of these formats are blending together.
With shoppable ads, with many of the other innovations we're doing, you're gonna see some of these ad budgets blend together, and that gives us access to even further growth. There could be a headwind in the near term based on the market where, as Paul said, we're currently not seeing much, but we could see that later in the year, and that's obviously not something that is fully within our own control.
We should assume that advertising grow much faster than a whole worth 20% over five years?
Yes. You can assume that.
One other thing I should probably add, I think, Ben had asked a question we didn't get to the full answer about the podcasting. It is 7% of streams, Ben, and it's about 14% of that is what we're monetizing right now. There's a huge opportunity for us to monetize even more. You know, adding SPAN capabilities into Anchor podcasters and having more Anchor podcasters, you know, coming through the system will add even more inventory and more monetizable inventory for us.
All right. Great. Let's stick with the front row, if we could go to the end here, to Mark.
Mark Mahaney at ISI. You know, you're right over the last four years, you were in that 25%-35% revenue growth that you gave at your direct listing, but you're at the low end of that. I guess the question is, did something not materialize that you had wanted it to, you know, over the last four years? The second one, can you just talk about where you are with the labels now? Because one other way to grow gross margins, of course, is to get better terms than the labels. You're materially bigger now as a source of revenue, as you pointed out, to the labels. How do you feel about the labels negotiations and relationships now? Thanks.
Yeah. Why don't I start and address the label part, and maybe you can talk about sort of the last four years and some of the sort of puts and takes there. I think the most important thing, and I've said this before, but somehow I don't believe analysts believe it fully, but our strategy is not predicated on trying to extract margin by negotiating better terms with the content partners we have. That is not our strategy. Our strategy, however, as articulated today, is to build marketplace businesses where these labels become customers of us buying more services, thereby increasing our gross margin through that.
To put that a finer point on that, because I think this is an important part, like, the number one expense for any label partner today is marketing and distribution of new acts that they have. This is a significant expense for them. It's even so that in the beginning of a new release lifetime, they have a negative gross margin in the early years, and then that turns into a positive gross margin over time as they sort of amortize that IP, right? Anything you can do to make that spend more efficient that they're doing in increasing that's a huge benefit for the profitabilities. We oftentimes get pegged against them, but our strategy is actually to try to build something that benefits the labels as well as benefiting Spotify by providing them with more value.
That's kind of what you've seen here. The testament for why our music business has been growing is really down to that marketplace strategy. We've even had other puts in the business when it comes to sort of publishing and other things that have been sort of headline costs for us in addition to where we were in 2018. The great thing is we keep expanding our margins because of that growth in that marketplace business, and we see a lot of room still left there. We're still a very, very small portion of all labels' marketing spend. In addition to that, we will bring more new products for them to upsell people from a regular listener to super fans.
This is an important one, too, to conceptualize because if you look at our music business, the best way I would put it is free Spotify in the download and CD area, basically the entire industry monetized the super fans really well, and it didn't monetize the average listener pretty much at all. Radio was a very, very small part of label industry revenues. Here in the U.S., it was abysmal in some of the other markets it existed, but really wasn't that big. It's really kind of monetizing the whales, if you'd like. More and more obviously became casual fans because of piracy being a much better experience. They monetized it less and less, and the industry started declining.
What we did was we brought up that average level of monetization across the board by all of a sudden getting all these people that used to do piracy all of a sudden now started monetizing really well. Now, the downside with that strategy, if you wanna be crass, is that while we took up the average, we capped the ARPU. The next strategy over the next decade for the music industry to unlock even further growth is obviously uncapping that, ARPU by bringing more value opportunities for label and artist teams to really kind of monetize more of that relationship through turning more of these sort of average listeners into super fans and then monetize that relationship very differently than what they have in the past. That's how we will grow the music industry from $30 billion up to $80 billion even beyond, as Alex talked about.
Yeah. Then the other part of your question, Mark, I don't know if it. I don't think anything went right or wrong. I think we're just really pleased with the 26% FX neutral CAGR. I think when you look at maybe on the subscription side, we've actually grown faster in some of our affinity plans, so duo and family plan, sort of a bigger part, which makes the ARPU a little bit lower. Then you may say, "Well, is that a good thing or a bad thing if your revenue is less?" I think it'll get back to what Tony talked about, which is what we've seen in all those plans is churn is much lower, retention is much higher, and the LTV of those users is significantly higher. You know, I'll trade 200 basis points of revenue growth for a much higher, you know, LTV any day.
All right. Why don't we go, let's go next to Mark here, to Steven.
Thank you. Thanks for the view on music gross margins. I think maybe the skeptical view is that you continue to grow music so successfully that even if we believe in podcasting and advertising, that music is still just a big piece of the pie, that you've got this mixed headwind that you may have to fight, and you can't make consumers listen to podcasts, you know, as much as they may love them. I guess would love to get a little more detail on what's driving that 75 basis points of premium margin expansion. Is that something we can expect, you know, pretty routinely each year? Or is that more of, sort of a long-term average annual type of guidance number?
Just on the sales and marketing guidance, that seems to be the really big driver in what's gonna bring operating margins up. I think that's a big deceleration in terms of percentage of revenue from where it is today. How quickly can we see that? 'Cause again, that seems to be the real inflection in the OpEx side is from sales and marketing, so would love to get a view on that. Thank you.
Yeah. I guess I'll take the last part first. I think when you look at our long-term operating margin targets, there probably is more room in the sales and marketing relative to where we are to where our target would be on the long term. You know, it's long term, so, you know, we'll get there, you know, kind of over that period of time. You're probably more likely to see actually the leverage on the G&A side even faster, right?
When you think about where we are with G&A, we've built out a lot of resources on legal, accounting, finance, you know, going from not being a public company to being a public company, and being a public company in 65 markets to one in 183 markets, the infrastructure on that G&A side has actually grown pretty significantly over the last couple years. I would expect you'll actually start to see that moderate even faster than sales and marketing. I don't necessarily expect to see a ton of leverage on sales and marketing in the short term. Next couple of years, we've just launched in so many new markets. We've talked about our opportunities in Southeast Asia and LatAm and the whole African continent, so I think there's a lot of opportunity there.
That's sort of a long-term target of where we get, you know, from that standpoint. When we think about the music margins, I'd kinda go back to what we've already said. You know, the progression there, it will not be linear. It's never linear for us. The 75 basis points is an average. Some years it's gonna be worse, some years it's gonna be better. That's how we always run our business, we'll never not invest if we think it's something that's gonna drive long-term profitability and a long-term better gross margin. In general, I think what we talked about with, you know, Charlie identified with all of the marketplace tools and services, you know, it's a big business right now.
I think, you know, hopefully people have gotten some appreciation of how much that's grown from $ 20 million in gross profit benefit to $ 160 million in just four years. We see continued growth there. That's gonna be really the main driver on expanding gross margin. As Daniel said, it's not about renegotiating headline rates, it's all about bringing more and more value into the ecosystem, and if we're bringing value to our partners, then some value will accrue to us as well.
Yeah. No, I think the last point you were just mentioning was kind of like, hey, isn't just music much of this business? It is, it is and will always be a very important part of Spotify and its story and that's something we're incredibly proud of. That said, I think the key tenet here is kind of the question we were addressing earlier about like, well, how fast can the revenue in the other verticals grow? Podcasting, remember, we have to do a lot more heavy lifting to get into that. It was the bigger stretch to believe in, and it's a market that virtually doesn't exist but has lots of tailwind growth, and some of the other verticals exists and are already quite sizable, and we can grow revenues more and more.
The bigger macro theme is really the 1 billion users and the 50 million creators. If we build more and more services on top of that with marketplace things and live rooms and ticketing and the commerce and all of these other things that exist on there, again, aided by all this data we have, the machine learning, the LTV, but also the engagement. We have a tremendous amount of time of users, time every single day that gives us these opportunities to upsell, and we have proven that we have an amazing R&D team that make these very complex things seem very simple for the user. Our belief is that that will create and build massive things. You have heard this phrasing, the creator economy. We don't pretend to be the entire creator economy.
There will be several other players, but we think this audio part of this creator economy is way bigger than most people realize, and that's why what we're excited about, and we think it might be hard to kind of plot out the lines exactly where they will be, which is kinda why we're doubling down that we think this is 10x opportunity, not just linear. I wish we could tell you exactly how that's gonna plan itself out, but our belief is this will happen. You know, I'd just like to go back. I mean, I remember we were sitting in a meeting many, many years ago, and we just reached our first million subscribers, and I was meeting with outside investors at that time.
I said to them, "Look, I mean, what's the potential of this music subscription market? Like, how many subscribers do you actually believe you can get to?" I said to them, "Well, I think we get to 100 million subscribers." They said, "Well, in what timeframe?" Truthfully, I had no idea at that time. I said, "Well, I think it's about five years." Five years came. We didn't hit the goal there, but around six and a half years in, we did. That's the big thing that you just need to get about a company like Spotify.
We'll put out these pretty audacious targets that we're going after because that's how we see the world, and we're gonna invest behind that, and that means, as Paul said, the way there might not be straight linear up and to the right. It's gonna be kind of, some puts and calls along the way. W e're comfortable that we're building a very robust business that's free cash flow positive, where gross profit will grow faster than the revenue growth, and that gives us more and more opportunity to grow the business, and that should make investors, we think, happy.
All right, great. We are almost out of time. We got time for one more question. Why don't we go back here to Matt on the end here.
Hey, it's Matt Thornton at Truist Securities. Daniel, Paul, maybe coming back to the ads business for a second. When you think whether it's intermediate or longer term, can you give some color on how you think that business breaks out, you know, Spotify-owned and exclusive content versus music content versus third-party, you know, ad network type content? 'Cause obviously very different gross margins across those three. Any color there, high level. T hen just secondly, on the competitive side, do you have any data or sense as to when you look at your user intake, what percentage are coming from brand-new users that haven't used another service versus ones that you're actually pulling from competing services? Any color there'd be great as well. Thanks, guys.
Yeah, on the last part, Alex, I don't know if you have anything to add on the intake on the funnel.
Not really, no. Not that.
Yeah.
We don't know precisely either, so.
Yeah, we don't have a precise measurement to share there. I don't know, Paul, if you wanna address the other part of it.
On the ads? Yeah. I mean, we don't give that level of breakdown. I think the way to think about it is a lot of the majority of the costs and the reason the margins are so low has been the investment in on the O&E strategy. You know, as that grows, we believe the revenue is gonna grow faster than that. You can expect to see, you know, revenue per listening hour growing at a much faster rate than cost per listening hour, which is why you start to see that. We have a, you know, a pretty decent take rate on Megaphone and Span right now. Assuming that stays kinda roughly where it is, that's the blend of those together will get us where we need to be, kind of in that intermediate-term, 3-5-year target of greater than 30% gross margins on the podcasting side.
I think the only addition I would probably make is I don't think we really have a platform strategy here, so I don't think we really. The goal is to expand the pie, and we think we can do that for these 50 million creators. Some of them will be sort of then top-tier publishers that we work with will likely have lesser gross margins than some of the tail end creators that we're working with. This is kinda why this kinda three legged stool is just a great business for us.
We've got the O&E part, which is usually the top end of this content that you'd imagine, where we can augment that from, say, known publishers where margin will be less, and then have our own content where still head content where margins will be great. Then we have the platform model that fills out the rest of it, which usually tends to be pretty high-margin businesses as well when you get to scale. That's the hard thing. It's this sort of chicken and egg to get to scale. You see many other platforms when they do that investment is they usually have to invest quite a lot in the beginning, and then as more and more people are using these self-service tools, you tend to drive up the margin on the ad side too, and that's the same playbook that we're applying.
The one unique differentiator for us is obviously our O&E content. That means that a lot of advertisers want to be with just those types of creators 'cause Spotify is the only place where they exist, and that drives up this premium value that Dawn talked about too, where we're seeing nice multiples by just having that content on our service.
All right, great. We are out of time. I don't know, Daniel and Paul, if you have any final remarks.
I would just say again, you know, this has been four years in the making and obviously we've gone through a pandemic. I just wanted to thank everyone here in the room for joining us and obviously thank you to everyone who's joining us on the webcast too. This has been a pleasure to do. Hopefully, you have a better sense of the Spotify business today and where we're going into the future and see why we're so excited about this business. Thank you all for making it here today.