Spotify bets on AI to retain subscribers

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A new ChatGPT integration and “Prompted Playlists” from Spotify signal a strategic AI investment to retain subscribers amid stiff competition from Apple, YouTube, and Amazon.Spotify’s stock price has declined recently, but the platform boasts approximately 90 million subscribers using its interactive DJ feature, which has seen over four billion hours of user engagement.

AI integration explained

Michael Pachter from Wedbush Securities notes that streaming libraries from competitors resemble Spotify’s offerings, similar to how Bing and Edge compare to Google. AI recommendations are making strides, with Spotify focusing on diverse AI prompts for personalised music discovery.

The new ChatGPT feature lets users communicate directly with OpenAI’s chatbot for music and podcast suggestions. Users can request content based on mood or genre, receiving results in ChatGPT that open directly in Spotify for playback.

Spotify claims this system allows for deeper interactions than traditional feedback options, uncovering new music and revisiting old favourites. The feature is opt-in, ensuring user control over their data without sharing content with OpenAI for training.

Another feature, Prompted Playlists, enables users to create custom mixes based on their feelings or memories. Apple’s streaming service has been integrating similar AI features, including chat-based interactions for music recommendations. Amazon Music’s Maestro allows playlist creation through text or emojis, currently in beta testing.

Spotify executives highlight AI’s role in user engagement, asserting that such investments attract and retain subscribers. Alex Norström, co-CEO, stated improvements in AI-driven discovery enhance user time and engagement on the platform.

Spotify’s interactive DJ feature remains popular, amassing 90 million subscribers and four billion hours of usage. Norström also mentioned that Prompted Playlists have quickly gained traction among power users.