Wrapped Helps Spotify Add Users Despite Artists' Criticism over Fees

Why It Matters

Spotify’s ability to expand its subscriber base and revenue while under royalty pressure underscores the platform’s market resilience and sets a benchmark for monetization strategies in the streaming industry.

Key Takeaways

• Paid subscribers reached 290 million, up 9 million.
• Wrapped engaged 300 million users, 630 million social shares.
• Revenue hit $4.5 bn; profit €1.17 bn in Q4 2025.
• Artists continue boycotts over royalty payments.
• Spotify invests in AI, video podcasts, audio e‑books.

Pulse Analysis

Spotify’s fourth‑quarter results illustrate how a well‑orchestrated user‑engagement feature can translate into tangible financial gains. The Wrapped campaign, now in its 11th iteration, acted as a catalyst for user retention and acquisition, delivering more than 300 million personalized summaries and sparking 630 million social media shares. This viral momentum helped lift paid subscriptions to a record 290 million, contributing to a $4.5 bn revenue run‑rate and €1.17 bn net profit, while the stock rallied roughly 15 percent on the news.

The platform’s growth narrative, however, is tempered by a persistent royalty dispute that has drawn high‑profile artists into public boycotts. Critics argue that Spotify’s payout model undervalues creators, a sentiment amplified after Taylor Swift’s three‑year hiatus and Massive Attack’s recent protest. While the company disclosed an $11 bn payout to rights holders, the debate highlights a broader industry tension between scalable streaming economics and equitable compensation, prompting regulators and competitors to scrutinize royalty structures more closely.

Looking ahead, Spotify is positioning itself as an audio‑technology pioneer. CEO Gustav Söderström emphasized rapid adoption of artificial‑intelligence tools, video‑enhanced podcasts, and audio e‑books as pillars of future growth. By integrating AI‑driven recommendation engines and expanding into multimedia formats, Spotify aims to diversify revenue streams beyond music, mitigate royalty pressures, and cement its role as the R&D hub of the music ecosystem. This strategic pivot could reshape content consumption habits and set new standards for innovation in the streaming market.

Wrapped helps Spotify add users despite artists' criticism over fees

By Faarea Masud, Business reporter · 1 day ago

Image: “Rick Polk/ Getty Images – Yoonchae, Megan, Lara Raj, Sophia, Daniela, and Manon of KATSEYE perform onstage during Spotify’s 2026 Best New Artist Party at LA’s The Lot at Formosa on January 29, 2026 in West Hollywood, California.”

---

Music‑streaming service Spotify has managed to boost the number of people streaming music, podcasts and audiobooks on its platform, despite increasing competition in the streaming industry.

Paid subscribers in the last three months of 2025 jumped by 9 million, to 290 million – helping net profit rise to €1.17 bn, the music giant said in its financial results released on Tuesday.

Although the Swedish firm said it paid almost $11 bn to artists, criticisms remain that the platform does not pay enough to musicians for having their songs on its platform.

Spotify has over 750 million users, comprised of paying and non‑paying subscribers, who each get a curated summary of their listening habits at the year‑end. It highlighted its “Spotify Wrapped” feature for engaging users.

“Our 11th annual Wrapped was bigger, bolder and more layered than ever, celebrating fans, artists, creators and authors around the world,” the company said in its results. “Wrapped had more than 300 million engaged users and more than 630 million shares on social media globally in 56 languages.”

Chief executive Gustav Söderström said the firm considered itself the research and development department of the music industry, by focusing on new developments in audio, such as adding video to podcasts, and embracing music made by artificial intelligence (AI).

“Our job is to understand new technologies quickly and capture their potential, which we’ve done time and again,” he said. “The entire industry stands to benefit from this [AI] paradigm shift but we believe those who embrace this change and move fast, will benefit the most.”

But the latest revenue figures come as a heated debate continues about how much money artists and songwriters receive in royalties. Various artists boycotted a Spotify party in 2025, and Taylor Swift famously refused to put her work on the platform for three years because the platform didn’t pay enough.

The firm credited its expansion in users partly to audio e‑books, though it did say:

“The hard problems ahead – in music, in podcasts, in books, in video, in live, and in things we haven’t built yet – we’re going to keep building the technology to solve them.”

The band Massive Attack is the latest to boycott the firm, which it did in September 2025, saying Spotify was an “economic burden” on artists, and that fans’ hard‑earned money was fuelling its “lethal, dystopian technologies”.

Spotify said it made $4.5 bn in total revenue in the final three months of 2025. Shares in the streaming company jumped around 15 % in trading following the financial results.