Back in December, Spotify CEO Daniel Ek announced that the company’s Chief Financial Officer, Paul Vogel, would be leaving the company at the end of Q1 2024.
The announcement came three days after Spotify announced a headcount reduction of around 1,500 people, or about 17% of its workforce. It was the largest in a series of layoffs the company had executed over the prior year.
“Spotify has embarked on an evolution over the last two years to bring our spending more in line with market expectations while also funding the significant growth opportunities we continue to identify,” Ek said in announcing Vogel’s departure.
“Over time, we’ve come to the conclusion that Spotify is entering a new phase and needs a CFO with a different mix of experiences.”
A “different mix of experiences” is certainly what Spotify will get with its new CFO – Christian Luiga, who has been serving as CFO and Deputy CEO for Swedish aerospace and defense giant Saab AB.
In a statement issued on Thursday (April 4), Spotify said Luiga will join the company in Q3 2024, while Ben Kung, Spotify’s VP of Financial Planning and Analysis, will serve as interim CFO until then.
Luiga will be based in Sweden “and have responsibility for the following functions: financial planning and analysis, audit and risk, investor relations, accounting, corporate development, tax and treasury,” Spotify said.
According to a statement released by Saab, Luiga will continue to serve at the Stockholm-headquartered defense company until October 3 at the latest.
“I have really enjoyed my time at Saab and it is a fantastic company with great opportunities. I will miss all the colleagues that I have got to know during these years and I look forward to following the continued success of the company from the sideline,” Luiga said in the statement from Saab.
Luiga has been CFO at Saab since September 2020. Prior to that, he spent 11 years at Swedish telecom firm Telia, including a six-year stint as Executive Vice President and CFO, plus a short period as President and acting CEO.
“I have really enjoyed my time at Saab and it is a fantastic company with great opportunities.”
Christian Luiga, Spotify
Vogel came on board with Spotify in 2016, as Head of FP&A, Treasury and Investor Relations. He was appointed CFO in 2020, replacing the previous CFO, Barry McCarthy.
The week Vogel’s departure was announced, an SEC filing showed he had cashed out 47,859 shares of Spotify, banking him an estimated USD $9.38 million.
The changeover in Spotify’s chief financial officers comes amidst major financial changes at the company, including a shift in focus from building a subscriber base to reaching profitability, something the company hasn’t managed to do, on an annual basis, since it went public in 2018.
“A new part of the Spotify modus operandi is our focus on efficiencies,” Ek told investors on the company’s Q3 earnings call last October.
“Paul [Vogel] and myself and the rest of the management team [are] constantly looking at how we can make improvements, and we’re constantly finding new ways to bring more efficiencies out of the business.
“Our… expectations are now that we will consistently be in the black moving forward.”
To that end, the company announced 500 layoffs in January of 2023, and another 200 job cuts in June, related to a restructuring of its podcast division. The company also shut down Spotify Live last year, after two years of “experimentation” with live streaming.
Spotify has also begun raising prices. Its first-ever price hike in the US and many other markets came last summer, when it raised the Premium individual subscription price from $10 per month to $11.
According to a news report this week, Spotify plans to raise the price of an individual subscription in a number of markets again this year, including the US. In the UK, Australia, and Pakistan, that price hike is expected to take place by the end of this month. An individual subscription in the US will rise to $12 per month in the US, while family plans will rise by $2 to $19.
The company is also reportedly planning to launch new subscription tiers, including a “basic” tier that will exclude access to audiobooks. (The Premium subscription comes with 15 hours of audiobook listening time per month included in the subscription price).
It’s also been rumored for some time that Spotify is working on a “Supremium” tier that will include access to high-bitrate lossless audio, something on which Spotify has lagged major competitors such as Apple Music and Amazon Music.
Notably, the company recently completed a shift in its royalty payment model, under which tracks withe fewer than 1,000 plays in the prior 12 months won’t be counted towards an artist’s share of the royalty pool. The change is among a number Spotify is making to deter artificial streaming and disincentivize “those attempting to game the system with noise.”
The change is expected to shift “an additional $1 billion in revenue toward emerging and professional artists over the next five years,” the company said.
Spotify paid out $9 billion to rightsholders in 2023, equivalent to 63% of its revenue.Music Business Worldwide
