Spotify Technology said it targets to achieve $100 billion revenue annually in the next 10 years with high-margin returns from its costly expansion into podcasts and audiobooks.
The audio streaming company would need to make its revenue grow nearly 10-fold from 2021 revenue of $11.4 billion. Spotify CEO Daniel Ek also forecast gross margins to jump to 40 percent and operating margin to 20 percent in the same time, Reuters news report said.
“Spotify will put out these pretty audacious targets and we are going after these because that’s how we see the world and we are going to invest behind that,” Daniel Ek said.
Spotify’s chief content officer, Dawn Ostroff, said the company has committed more than $1 billion to podcasting, and expects podcast revenue to increase materially this year from the $215 million (200 million euros) it made last year. She said the company was in investment mode, but it believes podcasting to be a $20 billion opportunity.
Daniel Ek expects the podcast business to have the potential to generate margins between 40 percent to 50 percent and audiobooks to also have margins over 40 percent. He did not specify how long it would take for the company to hit those numbers.
Apart from music, podcasts and audiobooks, Spotify is also planning to enter new types of content over the next 10 years that would boost its average revenue per user, engineering manager Alexander Nordstrom said. He said Spotify was on track to hit its goal of 1 billion users by 2030.