As December began, Spotify users waited with bated breath for the release of 2024 Wrapped, the platform’s annual showcase of each user’s listening history and other data. Spotify Wrapped is a highly anticipated end-of-year occasion for users of Spotify, one of the world’s largest music streaming platforms.
However, its Dec. 4 release brought a massive wave of disappointment from users, who criticized the streaming platform for its lackluster and uncreative Wrapped. In addition to its delayed release, it lacked its usual stimulating data visualizations, instead presenting minimal statistics in a bare-bones format.
The 2024 Wrapped featured users’ top artists and songs, the number of artists and songs listened to and total listening time. This year’s unique feature was a “Music Evolution” section that gave users a creatively titled micro-genre for certain months they spent listening to that style of music the most. However, users found the labels to be extremely bizarre due to their randomness and their lack of recognition outside of Spotify Wrapped, prompting memes across the internet.
“What the hell is this,” one user posted on X, reacting to their label for June being their “Pink Pilates Princess Roller Skating Pop moment.”
Additionally, this year’s Wrapped featured an artificial intelligence (AI) podcast in collaboration with Google NotebooksLM. Users didn’t particularly appreciate this new feature, as consumers have recently been rejecting the use of AI in media and referring to the general overuse of AI as the “Year of Slop.” Many users also questioned the accuracy of Spotify’s metrics for top songs and listening time, with some even suspecting that AI had falsified some of the data.
“I learned 2 things from this year’s Spotify Wrapped,” wrote a user on X. “1. I should probably cancel my Spotify premium [and] 2. Their [end of year] metrics are 100% made-up.”
Previous years’ Wrapped editions featured unconventional yet engaging statistics, like matching cities to users’ listening habits, listening personalities inspired by the Meyers-Briggs test, music evolution through the day, top genres and more visually interesting graphics.
Users widely agree on Spotify’s poor performance with Wrapped this year, pointing to the fact that the company has laid off a large portion of its staff and its increased use of AI to fill in the cracks. Spotify laid off 17% of its workforce in December 2023 in an effort to improve efficiency. Despite adding 6 million subscribers during the June-to-September period, Spotify only managed a profit of $34.8 million, which is up from a loss of $248 million in the same period last year.
Spotify’s consistent losses and low profits can be chalked up to its broken business model. The platform pays artists an average of $0.004 per stream, which largely contributes to Spotify’s negative net income. For every $1 Spotify makes, $0.70 goes to paying the music rights holders. The remaining 30% of the revenue is not enough to fund Spotify’s internal costs, such as staffing, design, marketing, content hosting and legal. The saturated music streaming market, with alternatives like Apple Music and Amazon Music, leaves no right move for Spotify to make. Decreasing royalty cuts for artists would drive music companies to other services, but increasing prices for users would also cause them to choose other services with similarly competitive pricing.
Other ventures to gain a profit have not worked out in Spotify’s favor. In May 2019, Spotify introduced a $90 voice-activated streaming device called the “Car Thing,” targeted toward consumers with older cars without CarPlay or any modern user interface. Due to low demand and supply chain issues, the device was discontinued in February 2022 but Spotify said that existing devices would perform as intended.
However, in May 2024, Spotify announced that the hardware would fully stop working in winter 2024, advising Car Thing users to throw it away. Initially, Spotify did not offer refunds for the device, but after many threatened to sue, it is now possible to receive a refund until Jan. 14, 2025. Users were extremely dissatisfied with Spotify’s decision, especially given that the Car Thing was a Bluetooth device. As a result, there was no real reason to remove the functionality and render the device a brick. As the Car Thing is a Linux-based computer, people have been hacking the device to restore its former functionality and more.
Spotify has also spent upwards of $1 billion on podcasts in an attempt to dominate the industry, landing “Spotify Originals” with the Obamas, Prince Harry and Meghan Markle, the Kardashians and other celebrities. However, in 2023, Spotify reported a loss of over $500 million, which led to the increases in price for the premium family plan and the mass layoffs in December 2023.
Ultimately, Spotify’s business model continues to look increasingly precarious. Unless it can convince people to pay more for music, Spotify will continue to struggle, potentially resulting in its demise.
Ananya Kashyap is an Arts and Entertainment Intern for the fall 2024 quarter. She can be reached at ananyask@uci.edu.
Edited by Alaina Retodo and Jaheem Conley.