At the end of every year, Spotify Wrapped takes over social media feeds, with users showing off the annual recap of their top music choices. Lately, these reviews have taken on a more international flavor — packed with K-pop and Latino rhythms that mirror the platform’s explosive overseas expansion and increasingly diverse artist catalog.

Launched in 2008, Spotify today has about 761 million users, including 293 million subscribers, in 184 markets. Brazilian funk, K-pop, Afrobeats, and Urban Latino are among its fastest-growing genres, and last year, songs in 16 languages reached its global top 50, Gustav Gyllenhammar, senior vice president of markets and subscriptions, told Rest of World. 

Most artists see more than half their royalties coming from streams outside their home country, even as the company grapples with the challenges — and opportunities — of artificial intelligence, he said.

The interview has been edited for brevity and clarity.

How important are international markets for Spotify?

We launched in multiple countries from the get-go, and our largest total addressable markets today are outside of Europe and North America. User growth, particularly in South Asia, Southeast Asia, sub-Saharan Africa, and Latin America, has surpassed established markets for many years now. In the last couple of years, we’re also seeing these become our fastest-growing subscription markets. When we launched in India in 2019, we were the 10th player in one of the most competitive streaming markets. Today, we’re the leader in audio streaming, and India sits alongside the U.S. as one of our largest markets by monthly average users. So it just makes business sense to focus on international markets.

It also makes cultural sense. More than half of content consumption on Spotify today is in non-English languages, and it’s growing. Perhaps the trigger was Luis Fonsi’s “Despacito” — that song is now at more than 4 billion combined streams on Spotify, which is just wild. It opened the ears of consumers to non-English music, and it’s quite common now to see Indian hits — even though they are primarily being consumed in India or by the Indian diaspora — show up in the top 50.

16 The number of languages represented in Spotify’s global top 50 songs last year.

Non-English artists were not compensated as well as those performing in English. Is that changing? 

In every country, the pool of money that users bring into Spotify is distributed among the artists being consumed in that country. So in Nigeria, the Nigerian consumer revenue goes toward the content that is being consumed there. But once an artist starts breaking outside their home country, they start generating revenue from additional markets. Nigerian artists make most of their streaming revenue from the U.K. and the U.S. We’re also starting to see more touring for international artists. Latin American artists have toured for a long time in Europe and North America, but we’re starting to see more Korean artists breaking into the U.S. Take our BTS album campaign — millions of fans engaged in-app, and thousands of fans went to concerts and fan events in New York, and in São Paulo, Mexico City, Tokyo, Jakarta, and Manila.

Artist education is also important. We show artists that there are many different ways to succeed, and that they don’t need to go with a major label. You can be independent, like Bad Bunny [who is on an independent label] and others, and from day one, you can maintain the rights to your content. 

Besides local artists, what’s helping you grow in international markets?

I don’t think we ever expected the subscription revenue model to be so successful outside of Western Europe and North America.”

We have been very diligent about localizing our price point. We’re not expecting people in West Africa to pay $13 a month for Premium, so we’ve found the sweet spot — from a local purchasing power parity point of view — and it is more like $2 to $5 in many emerging markets. We also had to innovate around payments. When we launched, it was a credit card-backed form for Western markets, but when you go to Thailand or India, you need to lean into the local payment method there. So we have UPI for India, which accounts for over 90% of intake, at an 85% cheaper effective rate than credit cards. We have different types of wallets for Southeast Asia, and we were one of the first merchants to integrate Pix, the local payment option in Brazil.

I don’t think we ever expected the subscription revenue model to be so successful outside of Western Europe and North America. We could not, in our wildest dreams, think that in South Africa, Nigeria, Thailand, Philippines, Brazil, Mexico, Colombia — we’re actually seeing a premium business model work. I think there’s going to be a phenomenal opportunity for us in India, which is already one of our largest markets — it’s the single largest source of new users for us. Traditionally, it hasn’t been a big revenue market, but I’m convinced that it will grow very, very nicely for us. I’m also very excited about Africa.

There’s a growing backlash against AI-generated music. Spotify has a new AI tool for Premium users to create covers and remixes of songs. How do you view AI use on the platform?   

How music gets created and consumed has changed every decade or so. Songwriters, producers, and artists themselves are leveraging AI tools in order to create and innovate, and express their art. We think it’s a good thing for them, and it’s a good thing for consumers. But it’s very important for us to protect artists and protect consumers, and to make sure that this doesn’t go rogue. So we have the artist profile protection program that protects their identity, and the Verified by Spotify artist badge, which shows they are authentic. We will keep developing the tools that artists are asking for, and we’ll listen to what consumers want. No consumer wants to be deceived into thinking that something is a human being when it’s not. These covers and remixes will be licensed, and will only involve artists and songwriters who agree to take part. So this tool is grounded in consent, credit and compensation from the start. 

On the other hand, in some countries like Japan, virtual artists have been around forever. So with AI, it’s more about not being misleading, and being clear about where the art is from, and for the creator to have full control of their profile, so that they are not being impersonated. This is very, very important. 

We are seeing a revival in vinyl and cassette tapes. What is the future of audio streaming? 

The streaming success has actually been the primary reason for the resurgence of vinyl and cassette, because consumers discover artists, fall in love with their music, and want the physical representation of that. I read that half the vinyls that are being sold are never listened to; they’re being purchased as a sort of decoration or art, and to support the artist. I’m a big believer in different formats of consumption supporting each other, and they’re great for artists to create more monetization options. I nurture my vinyl collection, but most of our listening occasions are on the go, when we’re commuting, when we’re on the way to the gym, and it’s not practical to use those physical formats.

It’s hard to anticipate what else can happen with AI. It is an opportunity for us as a company, but we’re also able to bring a lot of that into the consumer experience, in terms of the AI DJ, the prompted playlist, and other new experiences that are unlocked through AI. Our primary role is to listen, and stay very, very close to all our constituents on the creator side, and ensure that the copyright and intellectual properties and the art that artists create are on their terms, and they are in the driver’s seat.