Why should Spotify invest in improving shared playlists for friend groups?

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Why should Spotify invest in improving shared playlists for friend groups?

Asked at Spotify in the past month

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Abhijeet Das · Answer 1 · 2025-06-21T15:21:12+0000

To summarise the question, Spotify already has an option to create and share playlists with friends, however it is not upto the mark and has some issues which the team is contemplating whether they should invest their resources to improve the playlist sharing feature.

I would like to follow the below structure to answer this question -

Ask clarifying questions and make necessary assumptions
Identify the goal
Analyse metrics - Qualitative and Quantitative
Market competition
Key metrics to monitor
Recommendations
Summarise the discussion

Clarifying questions/ assumptions -

Do we know what are the pending issues in the playlist sharing feature?
- Flow is broken? No
- Intermittent issue? Yes
  - Device specific? No
  - OS specific? No
  - Geography specific? No
- Since when are the issues persisting? Last 4 weeks
Do we have any feedback/ customer complaints data? Yes, complaints have increased by 20%, with more than half of the complaints related to playlist creation and sharing issues
Do we have 4 weeks trailing data on -
- Market share? 30%
- New users signup? Dropped by 10%
- % Users creating account? Stable MoM
- % Users creating playlist? Dropped by 10%
- % Users sharing playlist? Dropped by 25%
- % Recipients receving playlists? Dropped by 10%
- % Recipients creating spotify account? Dropped by 10%
- % Users churned? 5%
Do we know about any powerful playlist sharing feature ofered by competitors? Similar offerings, nothing majorly different

Goal - Since the question is whether to invest in playlist sharing feature improvement, this is more likely going to be related to increase user engagement which in turn might lead to new user addition as well

Analyzing the metrics -

Quantitative -

We have seen a decrease in the user creation rate alongwith a significant drop in user engagement wrt playlists in the app. This drop had a cascading effect on the new users getting converted from playlist recipient category. Also, increase in customer complaints clealy suggests their discontent with the current feature and this might lead to their attrition if not handled on priority. Drop in new users would directly impact the revenue for Spotify.

Qualitative - SInce customers have complained more about the playlist creation and sharing feature, it suggests that they think of this feature as an important feature and hence handling these issues sooner will lead to a better experience for this disgruntled users.

Competitor analysis -

Spotify has major competitors like YT music, Amazon prime music, etc., who also have the playlist creation feature along with share capability, with no reported issues. So, this can be a risk factor for Spotify where they might loose out their customers to Amazon or YT.

Recommendations -

Based on the above data points, Spotify runs a risk of losing out customers due to poor playlist sharing experience which will directly impact their revenue. Hence, they need to act upon sooner to analyse the issues, prioritise them based on criticality and keep fixing them and make it available to the users.

Moreover, it can open up new monetisation opportunities, e.g,

Group-based playlist curation can feed into targeted recommendations or event based collaborations (like, Spotify for parties, Spotify for travel, etc.).
Could lead to premium upsells: synced playback for long-distance friends, co-listening analytics, etc.

In additon to this, it is important for the team to track the key impact metrics -

User funnel metrics (Adoption, Engagement, Retention)
Churn rate
New users getting converted through playlist sharing
Customer complaints rate
CSAT/ NPS score

To summarise the above discussion, Spotify has known issues wrt their playlist creation and sharing, which has been raised by their users through complaints showing their discontent. Since, their competitors like Amazon Prime music and YT Music already have this feature running smoothly, hence Spotify run the risk of losing out their customers to their competitors if they ignore the exisitn issues in the playlsit creation and sharing flow. Moreover, if they can improve their playlist creation and sharing flow smoother and best in class, it can open up new monetisation opportunities like spotifiy for travel/ parties, etc.