“After a period of experimentation and learnings around how Spotify users interact with live audio, we’ve made the decision to sunset the Spotify Live app,” the company said in a statement issued to multiple news sources.
“We believe there is a future for live fan-creator interactions in the Spotify ecosystem; however, based on our learnings, it no longer makes sense as a standalone app.”
However, the company says it plans to continue with some aspects of live audio, mainly “listening parties,” a format in which it says it has seen “promising results.”
According to Music Ally, which first broke the news of Spotify Live’s shutdown, some of the app’s shows will continue as non-live programs on the main Spotify app.
Spotify was one of several companies that jumped into the live-audio space after the meteoric rise of Clubhouse in 2020.
The Stockholm-based music streaming service bought Betty Labs, and its app Locker Room, for a reported EUR 57 million in March of 2021. Locker Room primarily hosted live audio shows focused on sports.
Spotify quickly rebranded the app as Greenroom, and expanded its content to include weekly music, lifestyle and entertainment shows. Shows included Lorem Life with Dev Lemons and Max Motley, Deux Me After Dark with Deuxmoi and Internet People Live with Zack Fox.
A year later, Spotify again rebranded the app, this time dubbing it Spotify Live, and bringing some of its features into the main Spotify app.
However, by 2022, Clubhouse’s sheen had worn off, as it became apparent that the market for live audio apps was limited.
Various media companies that had invested in Clubhouse competitors began to scale back or shut down their efforts: Twitter scaled back its Twitter Spaces, which was eventually shuttered by new owner Elon Musk; Reddit shut down Reddit Talks; and Facebook scaled back investments in live audio features.
Nevertheless, some online companies continue to invest in and expand their live audio offerings, notably Amazon Music and Apple Music.
The first sign of trouble for Spotify Live came in December, 2022, when Spotify canceled some of its live shows, including Deux Me After Dark.
And by early 2023, the company was busily scaling back its investments and reducing staff as part of cost-cutting measures.
Spotify announced more than 500 layoffs in January, becoming one of a number of prominent tech companies – along with Amazon and Meta – to announce job cuts in the face of growing economic headwinds.
Co-founder and CEO Daniel Ek said Spotify operating expenses grew twice as quickly as revenue in 2022.
Like many other leaders, I hoped to sustain the strong tailwinds from the pandemic and believed that our broad global business and lower risk to the impact of a slowdown in ads would insulate us,” Ek said at the time.
“In hindsight, I was too ambitious in investing ahead of our revenue growth. … I take full accountability for the moves that got us here today.”
According to an analysis by MBW, Spotify spent some $1.2 billion to scale up its non-music business between 2019 and 2022, not including spending on talent and content deals, such as the acquisition of Joe Rogan’s podcast in May of 2020, reportedly for $200 million, as well as signing Barack and Michelle Obama to the platform for $25 million.
Spotify’s current struggles may be a classic case of overspending and underpricing by a growing tech company. The company hasn’t raised its $9.99 subscription price in the U.S. since it launched in the market in 2011.
Source: MBW
