Spotify's Gustav Gyllenhammar Talks Australia's Position In The Music World: 'One Of The Most Successful Markets'

When it comes to the world of streaming, it's pretty hard to go past the ubiquitous nature of Spotify. 

With great size also comes great influence, and at a time when there are reports noting that local music is in trouble, Spotify wields a great deal of power in the local market.

But how does the local market rank in regard to the rest of its global competitors? And what sort of behaviours are unique to Aussie listeners?

That's the sort of thing that Gustav Gyllenhammar can speak to. With education ranging from Harvard University to the Stockholm School of Economics, Gyllenhammar has had an intriguing career path, including roles at Sony Ericsson, and time spent as the General Manager and CEO of Swedish marketplace Tradera, the past 12 years have seen him over at Spotify. 

From working as the Senior Director of Growth and the VP of Direct Subscriptions, these past five years have seen him employed as the VP of Markets and Subscriptions – giving him insight into global intricacies of Spotify's reach.

"It means that I have two jobs," Gyllenhammar explains while visiting Australia for the ARIA Awards. "I look after all 184 markets around the world where we have our local footprint across consumer-facing marketing teams, the music teams, and so on. also look after the subscription business globally. Our monetisation is premium consumer subscriptions – that's the part I look after.

"Wee have an ad sales B2B business that sort of fuels the revenue for the three tiers, so Premium is my baby," he adds. "I've been here 13 years, which coincides with when we launched in in Australia, so I've seen the market from its very first subscriber to where it is today."

Australia and New Zealand were one of the comparatively-early adopters to Spotify, having launched in May 2012 as its 14th and 15th overall markets, respectively. This local launch occurred just under three years since the service first kicked off in Sweden, Finland, Norway, France, and Spain in October 2008, with other European countries and the US following in the coming years.

In the ensuing 13 years since its launch, Spotify has lost a number of its competitors (including Sony’s Music Unlimited, JB Hi-Fi NOW, Rdio, and Samsung Music Hub) and has become synonymous with the very concept of streaming.

As such, it gives the service a majority market share, and places Gyllenhammar in a position where he can speak to how Australia serves as a market for the streamer. 

"We see Australia as not only a market that has been exceptionally successful for Spotify – we have more than half of all Australians using Spotify every month, but it's a market where most of our customers are on the Premium product portfolio," he explains. "So in some senses it's as successful as our home markets in Scandinavia. 

"But it's more interesting and more important because it also can be sort of a bellwether and early indicator for the truly big markets like the US and the UK, which is why it's very important for us when we think about those product strategies as well.

"We tend to want to do things here early because it can give us good signals and indications for what we do in the world's biggest markets."

Notably, this year also brought with it the news that Australia is no longer considered one of the world's biggest markets, with the International Federation Of The Phonographic Industry (IFPI) reporting in March that Australia fell out of the global top ten markets for the first time since at least 1996.

However, with Australian music fans (at least from our on-ground, home turf perspective) seeming as voracious as ever for the consumption of local content, Gyllenhammar says that Australia's market growth tracks with this perception of local appetites.

"If you look at the arc of our time in Australia, obviously was a marketing transition at the very first years from physical formats, from downloads, to streaming, and now these days I think streaming makes up 90% of the revenue here in the industry," he explains."For many years we saw double digit growth, and even last year, I think the industry grew 6% domestically in Australia, which is really strong for a market that is so mature. 

"I think you also can't talk about Australia without talking about the content, the industry, and particularly the export success. This obviously goes back to when I was a kid back up in Sweden and listening to bands like AC/DC and everything coming out of the market. 

"But it's also interesting to see what's been going on across the last few years," he adds. "You have really strong global showings from names like Troye Sivan, The Kid LAROI, and Tones & I obviously had some exceptional successes."

Gyllenhammar also notes that his privileged position within the streamer means he's seen his Spotify Wrapped data early ("I won't tell you which day it's coming, but it's not too far out," he teases), and even notes that this year has seen his an Australian act topping his list for the first time – with Royel Otis landing that honour.

However, he also points to dance music as an area in which Australia appears to be thriving, specifically namechecking the likes of massive exports such as Dom Dolla and Ninajirachi as acts who appear to be making the dance scene overtake the hip hop scene.

But while dance might be overtaking things globally (Billboard recently noted they had published their first Top 100 chart which featured no rap songs in the Top 40 for the first time in 35 years), what is it that is unique to Australians? According to Gyllenhammar, Aussies tend to have a far greater level of engagement than other countries.

"In terms of just pure shared listening time, it's very, very strong," he states. "In some markets around the world, you would see that streaming is very much a Gen Z and younger millennial phenomenon. But I think Australia is similar to Scandinavia where everyone from your grandmother to young kids are listening to music online via streaming services. 

"It shows general acceptance for tech adoptions in the market, curiosity, and then how people are interested in modern tools."

As a result of this tech adoption, Gyllenhammar again notes how Australia is a good test market for new features, with locals more likely to get a taste of new tech before the other major markets.

"When we launched the AI DJ, we did that early here; when we launched mixing tools, we did that early here; and when we launched the lossless feature in premium, we did that earlier," he lists. 

"We want to see and gauge those reactions both for things that are very visible to consumers and to the market, but also smaller sorts of changes to our product just to observe the behaviours of users."

Products like the AI DJ are a good example of how Spotify has been utilising artificial intelligence, which is undeniably a very controversial topic in the modern age. In a time when we've seen popular songs removed from platforms amid ferocious speculation regarding AI usage, we've also seen Spotify offer a refreshing outline regarding their approach to AI and how they're protecting artists and producers.

As Gyllenhammar notes, these approaches to burgeoning technology is vital to Spotify's operations.

"Due to its sort of heritage and background, Spotify has always been sitting comfortably at the intersection of people and technology," he explains. "That's where we're coming from, and if you think about the mission of Spotify to unlock human creativity by giving the creators the opportunity to make a living from their art, we want AI to be a tool in the hands of the creators and not something to ever replace the creators.

"It's something that we want to see being used by the artist and, and I think it obviously helps that Spotify is a platform that has fully licensed content uploaded by the right holders themselves.

"We don't have the same challenge with AI content that maybe other types of platforms or other types of services have in the online ecosystem," he adds. "So that's how we think about AI and we want to continue to work very closely with the rights holders, making sure that artists rights are fully protected."

As part of Spotify's commitment to ensuring the protections of its creators, the platform recently noted that more than 75 million "spammy tracks" have been removed from the service in the past 12 months – the equivalent of roughly two years' worth of annual uploads to the service.

But while the service is doing its best to combat bad actors thanks to a new impersonation policy, a content mismatch process, and the introduction of a new industry standard disclosure for music which features AI, Gyllenhammar also points out they're doing plenty to help give back to markets such as Australia, and help strengthen artists' careers where possible.

So for Australia, what is Spotify doing to strengthen local content? As expected, Gyllenhammar points towards Turn Up Aus initiative, which included a new editorial hub for local music, exclusive artist fan experiences, and industry events and youth music education programs.

"As an English speaking market, it's very easy for consumers to adopt content from abroad – US and UK content," Gyllenhammar notes. "But we care deeply about local creativity and local artists, so our Turn Up initiative has been very important for us to shine a light on all the creativity and all the talented artists that exist in the market.

"I think that celebrating local artists and local content is also one of the reasons why we wanted to partner with the ARIA Awards for the next couple of years, and we're very proud of that."

One of the things that Spotify voices their support of is Australian artists embarking upon "sustainable global careers." While Australia has long been a market that can be difficult to break out of and have that success translate to larger markets, it raises the question of what exactly Spotify means by the concept of a 'sustainable global career.'

"I think it means to not think of yourself as just creating a single hit or just going big on one thing," he explains. "Whether you're an artist, a carpenter, or something else, you have to be good at your craft, you have to be curious, and you have to constantly want to improve yourself. "So a lot of our effort has also been on the artist facing side of our platform. We have more people in our music team in Australia now than we've had ever before.

“There's more than 10 people that are working locally and tirelessly spending time with all these players in the industry – the labels, the majors, the indies, artists, manager teams, and artists themselves – doing master classes, talking about how you build successful careers, and how you create followership on Spotify so that you can continue to build your audience.

"As in most lines of business these days, you need to sort of be entrepreneurial in your approach, and you need to think of sort of having multiple legs of the stool in terms of your revenue,” he adds.

"So streaming can obviously be one sort of very important revenue stream, but thinking about lives, thinking about merch, thinking about other types of partnerships, those are the kind of things that we want to educate our artists about."

Alongside the education side of things, what other tools are Spotify providing Australian artists to build those global careers? 

"We have the Spotify artist platform where it's very easy for an artist to see how their songs are doing, where are they being consumed, what their audience looks like, and also as artists plan out the releases together with their teams, we have things like countdown pages so you can sort of have your album displayed a month before with a countdown that people can follow," Gyllenhammar explains.

"We see that when artists that leverage these tools, whether it's countdown pages or clips and other types of video formats on platform, they do tend to see stronger uptake of their content and they have stronger followership. 

"The listeners to their content come back more often as well," he notes. "So because fans want to get to know who the artist is behind the song and behind the music, those tools become increasingly important and it's something that we are very happy to expose and put in the hands of the artists."

With Spotify having made a strong impact into Australia over the past 13 years, and the platform offering myriad tools for local acts to craft these "sustainable global careers," Gyllenhammar notes that Australia's position in the global music economy is one that the streamer will keep investing in for many years to come.

"It's important to stress how important Australia is as a business opportunity in the market for Spotify," he notes. "Whenever we talk about our global priority, Australia is up there in our top five. It's one of the most successful markets, we have a larger music team than ever, and we're investing more in marketing in Australia than we've ever done before.

"We see that Australia is a market where the more we invest, the more it gives back not just to us, but to artists and creators," he concludes. "And we see many bright years ahead for the Australian music industry and streaming here."