The streaming capital of the world? This is how Spotify sees the potential of the music market in Mexico

MEXICO CITY (AP) — It seems that Spotify has always been in the ears of Latin America, but barely a decade has passed since the streaming platform arrived in the region and in those years the panorama has changed infinitely.

It went from being a consumer market to being an export market for the most listened to music worldwide on the platform and its growth, both in artists and users, has not stopped.

Visiting Mexico City, Gustav Gyllenhammar, vice president of markets and subscriptions at Spotify, talked about some of the most notable data for Latin America. Gyllenhammar oversees 184 markets spread across all continents, so his visits are sporadic.

“I can see a lot of differences compared to the last time I was here two years ago; it’s very exciting,” he said.

Below are some of the points he discussed with The Associated Press.

IMPORTANCE OF THE MARKET

In 2023, Spotify’s monthly active users grew 23% year-over-year to 602 million globally, with the addition of 28 million new users, the second-highest performance, for the latest annual quarter for the platform. Latin America represents 22% of Spotify’s global audience.

Premium subscribers (with paid plans to listen to content without ads) grew 15% from a year ago to 236 million. The addition of 10 million new premium subscribers contributed to a record one-year net adds of 31 million.

“That’s huge and not just in our active listeners, but 22% of our subscription (Premium) users are in Latin America, which is a phenomenal achievement,” said Gyllenhammar. “When we arrived 10 years ago we received a lot of recommendations and advice, people said that it was going to be difficult to get Latin American consumers to pay for music, but I think that together with the industry we have proven the opposite.”

The vice president of markets highlighted that part of the success in getting users to pay for legal music consumption is a correct proposal, close work with creators and products specially designed for consumers.

Regarding the participation of streaming music, he highlighted that it represents close to 95% of total music consumption in Mexico. In other Latin American countries the figure is a little lower, but it is still high.

On the list of the most important markets for Spotify are Brazil in 9th place and Mexico in 11th, the second country being the fastest growing, according to the International Federation of the Phonographic Industry (IFPI). .

“It is very clear to see that Mexico will soon be one of the first 10 countries worldwide from the point of view of income generation, not only from the point of view of the audience, because as an audience it has been there for a long time,” Gyllenhammar said.

FROM LISTENING TO PRODUCERS

For years, Spotify has highlighted Mexico City as a very influential city in music and the place where most of the platform’s main creators have their highest streaming numbers.

“Almost like it’s the streaming capital of the world,” Gyllenhammar said. “We also see it on the platform when we review consumption time per user, monthly hours of streaming; Mexico usually appears as one of those countries with an insatiable appetite for music.”

But part of the changes that the industry has had in these 10 years is that Latin artists have become global stars and this has been a growing wave that began with “Despacito” by Luis Fonsi, passing through the rise of figures like J Balvin, Karol G, Feid, Bizarrap and Bad Bunny, who for three consecutive years was the most listened to artist on Spotify worldwide.

Now is Mexican music’s time to shine, with representatives such as Peso Pluma, who was the fifth most listened to artist on the platform last year, Carín León, Natanael Cano and Xavi, whose music is heard far beyond the borders of the country.

“Mexico was for a long time an import market for music, but now it is becoming an export market,” said Gyllenhammar. “When you review the music of the main Latin American countries, Mexico included, you can see that the consumption of music from these countries, between 60 and 80% of the music of the most popular artists is listened to abroad.”

INDEPENDENT AND NON-ENGLISH SPEAKING ARTISTS

According to its Loud & Clear 2024 annual report, Spotify set the record for the largest annual payment to the music industry by any single retailer with more than $9 billion in 2023.

More than half of the 66,000 artists who generated at least $10,000 on Spotify come from countries where English is not the first language. Artists who might have struggled to break through internationally are now finding their audiences and the music industry is now a more diverse and accurate reflection of the world.

Spanish, German, Portuguese, French and Korean lead in performance in languages ​​other than English. As an example, in 2023 Mexican artists generated royalties on Spotify of more than 5.3 billion Mexican pesos (313 million dollars), more than five times the royalties generated in 2017.

The year 2023 was also a record for independent artists, who generated almost $4.5 billion on Spotify. For the first time in history, catalogs from independent artists and artists signed to independent record labels accounted for approximately half of all revenue generated on the platform. This represents a four-fold increase since 2017 and is the highest amount independents have generated from a single retailer in a year in history.

“It’s something we’re incredibly proud of and I also think that if you look at the 100 most listened to artists in the world, 25% of them are from Latin America, it’s an incredibly successful figure, but overall I think it shows the power of music and the power of platforms that don’t have national borders like they used to,” Gyllenhammar said.

Another of the data found in the report is that almost half of the artists who generated more than $10,000 on Spotify in 2017 are now generating more than $50,000 and four out of five artists who generated at least $10,000 in 2017 reached the minus that amount last year.

“In every market we go to we’re not really just there to make money or have a commercial business, we’re there to provide the global platform for creators so they can make a living from their art and have their art consumed around the world,” he pointed. “It’s true that Spotify has been a favorable platform for independent artists because it is a fast-moving and constantly changing platform and artists have new ways to release music and new ways to interact with fans, they can really take advantage of the entire platform” .

THE FUTURE

Gyllenhammar, who knows how to play the saxophone and calls himself a music lover, sees the outlook for Latin America with optimism.

“I think we are just scratching the surface of the success that Spotify and what we do for the industry is happening in Latin America; this is a region with many young people and emerging middle classes,” he said. “We see continued growth, it is growing faster than the rest of our markets and we are getting closer to the middle class in all Latin American countries… We review very closely what innovations and types of products and offers we can bring to the market to continued growth in the region, there is much more to come.