Spotify Co-CEO Alex Norström on Investor Day: reserved ticket access, UMG remix deal, AI adoption at 99%, and the disco ball logo moment

well, thank you so much for coming on the show and breaking it down for us. Congratulations.

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Up next, we have the co-CEO of Spotify joining, Alex Nordstrom.

Calling in from Spotify Investor Day. Welcome to the show. How are you doing?

What's going on?

Thank you. Hey, John and Jordy. It's good to be here.

Great to have you. Fantastic.

Uh uh first time on the show. Why don't you uh kick us off with the news today? What's new in Spotify's world? Yeah, we just had a fantastic investor day 2026. Uh we talked about what we've delivered in the past four years which put us in a really great position in terms of user growth and financial metrics.

Uh we also laid out um our four big ideas for for the future. Uh and then we also talked a little bit about how we can further monetize Spotify and grow uh grow all the sort of financial metrics and goals of the company. Uh I I want to send my greetings uh from from Gustav Sundrom who was also on your show a while ago.

Yeah. Yeah. We talked to him at South by Southwest. Uh it was a great conversation. We're very excited to have you here. Um

where should we start? I I'm I'm I want to jump into

I love big ideas.

Yeah. I mean there's so many different things. Uh maybe uh we should start with the reserve ticket access because I saw that organically promoted to me and it seems so logical. Uh and I'm fascinated by the roll out, the strategy and also um like sort of why did it take so long? Has this been in the chamber for a long time? Uh what has been the plan? What has been the go to market with this particular product?

Great question. So I've been with Spotify for I think it's now almost 16 years and this is great.

One of the most

one one of the most lovely improvements to Spotify Premium that we've done I guess since the founding really. Yeah. Uh so you're right, you know, it's long overdue. It it's a great one. Um and the reason why it's so great, it's it's really that it solves a couple of different problems. One is, you know, who hasn't been sitting there in front of a website trying to get tickets for a concert.

Like it's very hard and if you get it, it's going to cost you a lot, right? And the second second thing is even if you get tickets, it may not be to the artist that you actually listen to and love. Yeah.

Right. So this solves that. So what we're launching is basically we're giving you uh we're holding tickets for you for a certain time window for you to just go and and pay and collect with with with our partners. Uh so really solves the problem in a unique way because we're matching the tickets and the concerts and the participating artists and tours with the the users on our platform uh that are actually the true fans of this. And we look at it from many standpoints like not just the number of streams that you're doing. So you can't just grind yourself there. Uh it's also catalog engagement and so on. Yeah. So it's terrific. This is a fantastic improvement in Spotify premium.

Yeah. We have a new problem which was uh which will be ticket scalpers setting up you know uh infinite

paying the monthly subscription fee for years just to try to run algorithm. Uh no but I I think it's absolutely brilliant. solves a problem. You know, even even from the artists, like being in this position where you're trying to make your ticket prices affordable for your fans, but due to market dynamics, no matter where you price it, they'll they'll go they'll go way up and then the only beneficiary in that transaction is the is the person that's just buying the tickets to resell uh and and everyone else loses. So, I think

you're totally right. I mean this like many things that we uh do at Spotify uh we look at what organically happens on the platform and and what we do um and then when we see that there is some sort of signal or trend that actually just come by way of organic behavior on the platform then we double down on it. So we've done many events uh you know with artists and and groups and bands and so on over the years and you know on a on a on on a yearly basis probably do 150 to 200 events and um the the magic really happens when we look at who to invite to those events. And if we can really strike the balance of, you know, getting uh enough people there that are really sort of on a very very high engagement level with that artist, not only again, not only just listening to the artist, but doing it maybe on a daily basis, listening, having listened to the whole catalog and do it for, you know, at least an hour per day or something like that. It really gives the artist also like a magical experience of facing, you know, your truest fans. And this is something that uniquely we can do for for for artists.

Yeah. Uh AI is obviously at the top of everyone's mind. The large taste model is the latest technology from Spotify in the AI world, but I feel like you have to have been embedding every song into some sort of machine learning learning model for probably over a decade. Can you take me through a little bit of the history of machine learning or AI at Spotify? And then what has actually changed? Like where are you seeing a break in the graph? like where where are you seeing okay we're we're experiencing some sort of discontinuity in the progress we were making

yeah so you're right it was actually just about a decade ago uh when when Daniel and Gustav and I started investing into into AI then was called machine learning

right and uh it was very basic the alos then like it was almost like okay similar to what you do on Amazon you know John uh listen to this um he's similar to Jordy also listen to this other thing. Therefore, he should listen to that too. So lookalike algorithm, if you will.

Yeah. Collaborative filtering probably based on text, not actually looking at the waveform even.

Exactly like that. Yeah. And so now many many years later, having continued to invest in that and just the the the the data, not just the data, but the learnings we have and the feedback loops we've had over the years, it's been compounding. So, and now um you know, you're asking me what changed lately? Well, obviously what changed is that, you know, we've got access to um, you know, large language models like general intelligence that we can use to reason over the data that we have.

But what what it comes down to really is the unique data at scale here, right? So, you know, we we log probably,

you know, between I think it's three and four trillion events that happen per day on Spotify. So, we really get billions of signals that are relevant to feed it to feed the algorithm with. Uh and then the the second thing that happened is is obviously because we started to sort of uh you know understand English algorithms started to understand English. So we we sort of started importing a lot of knowledge from outside from the outside world onto Spotify.

Yeah.

Uh and and

yeah I've noticed that the search bar has gotten so much better at detecting lyrics. Like I used to have to go and Google or search uh a lyric and then go to Spotify and now I can just type it right in and I get it. I'm like this is an amazing experience. Um, I'm interested in uh your build versus buy versus fine-tune an open-source model. Uh, what's working? What's interesting? Music is, you know, obviously you're benefiting from transformer architectures from all the all the open source work, but I imagine that a lot of the tasks that you're doing aren't exactly okay, just fine-tune uh like a textbased open- source model. You might need to go a layer deeper. You might need to partner with someone. How have you been thinking about the way to deploy AI?

Yeah, we we certainly believe in general intelligence and you know we've been riding that cost curve uh that's that's going to come down collapse by a thousandx over the last four or five years or so. So we believe in in this industry commodatizing more and more. So we are going to buy you know the best reasoning capabilities that out there and then we're going to use that on top of what we call our large taste model which we are uniquely uh able to using proprietary data to actually build out much thanks to the stuff that I was talking to. Uh the other side of the equation here that is important I think is also that we got a lot of feedback and data from artists as well via our Spotify for artists application which feeds us with data that's also proprietary and unique which is great. So you you ask about build and buy and so on. I think it's a great question. Uh, you know, if we see opportunities to actually build something to help, you know, bootstrap or add a capability, we will do it. And I I'll draw two examples that are quite good. Uh, I think 3 years ago, we bought Santic, uh, which really helped us create AIDj.

Okay.

Um,

yeah, it really accelerated the build out of AIDj and now AIDj is all over the world and we have it in different languages and people are using it at scale. So that was a that was a that was a great I think transaction that we made. Another one that is also um it's more recent actually. Uh it was just before the end of last year we bought who sampled which provided us not with so much a capability but a unique set of data.

So I don't know if you've used song DNA lately. It's it's been killing it. I think 50 to 60 million people are using it already. You know you can listen to a song and then you can check like which were the samples in that song.

Interesting. And then you can also like follow the threads down like what's the original? Yeah. You can listen to the original track and then hear how they sort of flip that into the new one. You can see who was in there, the studio technicians, the artists, the composers and so on.

And a lot of this we couldn't have done or it would have taken us much longer time without who sampled.

Yeah. Uh structurally, how how is AI changing the work that Spotify employees are doing? Uh Matthew Prince from Cloudflare was talking about this concept of you have builders and sellers, but just the raw measurement uh that's less important as a discipline and so he's pushing more of his staff to build new things and then go and sell it. Uh do you have a framework for thinking about how your employees should be using AI in the future?

Yeah. Uh I mean we um uh you know a couple of years ago I think we all went through that the chat GBT moment

and uh just before the holidays of last year we had a similar moment around coding tools y

and we all sort of got enamored with it and started adopting it but at Spotify the engineering and development uh you know teams have just

you know done a crazy good job adopting it. So we now have I think close to 99% adoption across Spotify.

Yeah. Um and and this goes you know beyond the engineering team but also into the marketing team that are using it not just for design but also for for better gaining insight into what type of compelling stories to to to to tell on top of the story. So we do have very many different use cases and you know people are crazy about just creating prototypes now all around Spotify just test things in a way faster way. So what you get basically is a lot of like productivity gains. Um and I I I know for a fact um one of my dear colleagues the chief co-architect of Spotify NGN um he was just at Antropic and he was uh doing a presentation for for their staff and I hear uh from Antropic that we are actually one of the the leading developers out there in adopting AI and using it to to gain productivity uh productivity improvements.

Yeah. Have you thought about uh the I don't know there there is a trade-off you might be doing both but uh there's a world where you have some sort of engineering pod and there's an opportunity to have uh more members of that team uh pushing code shifting to individual contributor roles but of course they're managing agents so it's also a managerial role uh versus embedding more uh technically minded folks across different organizations so you have more crossf functional teams a marketing team gets an engineer who oversee agents. Uh how are you thinking about uh just spreading different uh different AI tool use across different organizations that might not previously have been in a position to build a piece of software. Maybe they're in the market to buy a couple SAS products for whatever their whatever their vertical is, but now they have the opportunity to actually build.

Yeah. What you're seeing actually happening organically with Spotify is that, you know, as you know, adoption goes up, it's typically, you know, uh, you're by your own and you're, you know, looking at what's out there, which MCPs to connect to and how that can help your your work and and then you're basically sort of copying some other people's skills around at the company and you're just sort of experiencing how it is to use AI to do your work, your particular field. Uh but what now is more happening is that we all of our Slack groups and in our communities we see people sharing sharing you know use cases with each other and the next step really is that for instance someone um a product developer and an engineer you know sits down with a marketer starts to understand hey okay we the three of us can actually build something of a uh you know a holistic experience of not just new product and feature but also tell a compelling story about it you know in a in a much much more sort amplified and and leveraged way, which I think is fantastic when it happens.

Love it.

Uh, we got to talk about fan-made covers and remixes, the new deal with UMG. Super super excited about this personally. And, uh, of course, it's been

You got a song you want to cover? You're going to do that? You're finally going to do the Gunna cover you were planning on.

What are you listening to? What's your What's your favorite track right now? Is it a Drake?

I I've been

uh No. I think I I think uh I was expecting Drake to kind of grow up by this point in his career and maybe evolve a bit more. I feel like I grew up maybe faster than Drake. He's still obviously,

you know, an incredible incredible uh superstar.

Uh but yeah, John was talking about Gunonna. I'm a big uh Gunonna Gunonna fan. Oh yeah.

But um so I'll be making some Gunonna uh covers and remixes. But yeah, talk about this deal. Uh certainly controversial, but this feels like one of those things that uh people will have one reaction and then they'll have experience

uh which I'm assuming will be you know incredibly magical and and you know we've had Mikey from from Suno on the show. He's a friend friend of ours and uh you know people people fundamentally they they they say one thing on the internet but when they use the products they love them and so I think it's I think it's super exciting. So yeah, talk about this deal. What what were the factors that were most important in getting this right so that you know fans win, artists win, uh and everyone involved wins.

Yeah. Yeah. Certainly. I am certainly very very pleased with it. I mean it's a landmark deal and it's a landmark deal from the vantage point of we're enabling something that is for the first time a legal product for users and fans to actually create these remixes and covers. Um, and what's more is that it's really the first time um, you know, in a controlled and licensed medium that artists get to partake in in in the AI economy really. So that that is like the the core of it. And then if you think a little bit about what it is that we're doing here, well, you know, people love to your point like people love remixes and covers um, and they've always done that, but there hasn't been any scaled way to really sort of tap into this opportunity. And what we're doing right now with with our product is that we're unlocking this this market. Um, so where where we think actually in the end it's going to be very additive to both the music industry and ourselves, including artists and songwriters. Um, so it's very cool. We're launching it as a paid add-on,

which means that, you know, if you have Spotify Premium, uh, you're ellegible to actually buy into this add-on, and when you have the add-on, you can actually go ahead and create remixes it covers. And what's cool with Spotify is that, you know, we've been we're very experienced when it comes to free and premium and, you know, how to convert people and lead people up the ladder. Uh, and so what we're going to do is obviously give you a certain um, you know, limited usage on premium so you can actually try it out, play with it, create habits around it and then commit to buying add-on. Um, but the the important point here is that uh, you can think about it as you know creation is paid for and consumption is included. So basically, you know, the output that you create around the Ghana,

uh the Ghana remix that you're going to create, you know, I'll be able to listen it, everyone will be able to listen.

Yeah. Is there uh so so I can imagine I can imagine a world, you know, maybe six months from now where the number one track globally on Spotify is a fan-made remix. Like, you know, may may take more time, but it doesn't feel doesn't feel uh doesn't feel impossible. Um, is there is do you think this could potentially create a new category of actual artists on Spotify? Would the person that creates a remix ever be able to get, you know, some element of of Revshare? uh or is this like entirely going to be uh more like uh you know more like a live DJ where you know you're putting you're mixing and mashing and putting things together and and um maybe you can build up your brand but you're not monet you're not getting royalties or any any revenue share.

Yeah.

Yeah. I can't speak to the specifics of it but but I can tell you how I think about it. Um, you know, when I started at Spotify together with Gustan, like 16 years ago, uh, we had roughly, I think it was two million tracks in the catalog, and I've lost count, but I think it's in the order of 200 million tracks now, you know, 15 16 years later. So, the the catalog being big and growing is a good thing. Uh, and the problem you're talking about, a real opportunity is for us to to uh to do recommendations well. And that's always been at the heart of Spotify. If you ask them, what why do you love Spotify? Well, Most people say, "Hey, it's because they seem to know me." So, we're able to sort of help you discover by way of personalization, uh, help you kind of find your tracks again that you like and so on. Uh, so really, this is what you're talking to is is really a personalization problem, right? So, it when when this product creates more catalog, our job is to make sure that, you know, the best song gets gets to the best place.

Last question. Uh, talk about the app icon redesign. Uh, I thought it was really cool. I loved it. He loved it.

Uh, but I'm interested in the actual I mean I I I I want to know how you processed it internally.

That a disco ball could get people

people were really talking about it. But but my assumption was that uh you know it was the Spotify icon is on my home screen and I click it when I want to listen to music. But uh it jumped out to me and I feel like that would show up in the metrics of jarring people awake. But I'm interested to know like what actually happened. is are you going to be changing the icon randomly every 5 years? Is it got to be every 20 years? Like what's the what is the learning from doing something sort of bold?

Right. So about 10 days ago uh we decided to change our the Spotify app icon or Spotify logo uh to one that is more of like a glittery disco ball version of the Spotify logo. and and you know to to your point this just sparked a massive uh conversation around the internet on on basically every major social platform and um uh and and you know what a lovely uh and wonderful uh piece of culture to have a conversation around the change of our our our logo and icon right so not only users you know have been sounding off but also other big brands in Open AI made their version suggested that they would make a version like that Kit Kat Kit Kat join in on Um, so yeah, so when you have uh, you know, hundreds of millions of people that passionate about culture and art and and and Spotify, this is what happens, right? So this sparks like a massive conversation that I think is is is lively and fun and and to be honest with you, the reason why this is happening, you know, having reflected on it a few days later now, it's pretty intense when it happens because there are two sides, right? And you know, and then there's also all of this like byproduct. You know, the internet coined a new design term around this called discomorism.

Discoorphism. Kind of funny. I love it.

And people have been asking for an answer to flat design. Lots of people have been lamenting how boring things have gotten. You spice it up and then people ah I didn't mean that which is a very funny way to process it. But sorry, continue. I mean I mean I just the the reason why this is happening after having sort of thought about it for a few days and discussed it internally really is because we are truly at the intersection of the humanities and technology and I think we're in a good place when it comes to that we're at scale uh you know when when when hundreds of millions of people potentially even billions are talking about you um then you did something interesting.

I love it. I love it. Uh yeah, a a really really well executed stunt and uh got Yeah, just got everyone talking and and reminding and it's hard to break through with with something like a 20-y year anniversary with a milestone like but it's important to do something like that. So congratulations.

We did it mostly. Yeah, thank you. We did it mostly for ourselves in the beginning, but now it turns out that you know

should be fun. Building a company around music should be fun. like all of this like it's I I know people have their think pieces and their deep dives on uh contrast ratios and all sorts of things, but like at the end of the day, it's fun for a company like Spotify to do something fun with an app icon for a few days. I love it.

Also, I push back on those people. I thought I thought it looked

exactly like a disco ball would look if you were in a dark room. That's right.

Listening to music, you look up.

Uh so I thought it was I thought it was pure to the to the disco ball brand.

I agree. I agree.

That's good. Thank you. Keep it up.

Anyway, uh thank you so much for coming on the show. Great to hang out. Congratulations on the progress.

Congrats to the team on all the new

milestones. We will talk to you soon. Have a great rest of your day. Goodbye.