You're the product manager at Spotify. Build metrics.

Spotify, an audio streaming service, provides users to access digital music, podcasts, and videos. So, the metrics to be built are for any specific of these services or overall? à Overall.

Since Spotify operates in multiple regions, it might have different product offerings across the geos, should the metrics be for any specific region? à Overall.

Is there any business objective that I should be aware of before building the metrics? à None, you can go ahead.

Okay, lets discuss about Spotify’s mission, its different offerings, its business model and see what its overarching business goal could be. Subsequently, lets list down the metrics of importance which align with the business goal.

Spotify’s mission is to unlock the potential of human creativity by giving a million creative artists the opportunity to live off their art and billions of fans the opportunity to enjoy and be inspired by it. As mentioned before, Spotify started out as an audio streaming service that gives its millions of users access to millions of songs through basic, limited, ad-supported service for free and an unlimited premium service for a subscription fee. Spotify also started offering podcast services (which have been a hit) as well as video services. And Spotify gets its content from major record labels as well as independent artists/creators and pays copyright holders royalties for streaming music. Off late, Spotify has also started dabbling in the usage of Gen AI in the music and video industry.

In the music streaming space, though Spotify has been a dominant player with a healthy market share, but it continues to face competition from Apple Music, Amazon Music, YouTube music and so on. Similarly, in the space of podcasts, its not only facing competition from dominant players such as Apple podcasts and Google Podcasts, there are many niche players as well. Spotify has struggled to convert the ad-supported free tier users to premium users. Also, music streaming, video streaming or social media apps, all are vying for user’s attention and time (which is the limited 24 hours). So, all such companies are competitors at a high level. Also, all these companies are also competing for advertisement revenue for their respective ad-supported tiers (more the users and more the engagement on platform à advertisers are more eager to invest). So, Spotify would like to increase and retain its users, increase engagement, and raise its revenue and profitability.

Now let’s look at its important overall metrics from creators, users and product usage perspectives:

Acquisition/Activation:

1. No. of new users acquired monthly for ad-supported and premium offering – split by audio, podcast and video as well as split by region
2. No. of creators added D/W/M – split by audio, podcast and video as well as split by region as well as split by independent creators and businesses

Engagement:

1. No. of users interacting (listening to music/podcasts or watching videos) D/W/M - split by audio, podcast and video as well as split by region as well as split by ad-supported, premium offering
2. No. of songs/podcasts listened to and videos watched per user D/W/M - split by audio, podcast and video as well as split by region as well as split by ad-supported, premium offering
3. Avg time spent by users on the platform D/W/M - split by audio, podcast and video as well as split by region as well as split by ad-supported, premium offering
4. No. of ads presented to per user D/W/M - split by audio, podcast and video as well as split by region as well as split by ad-supported, premium offering
5. No. of content added per creator in a month - split by audio, podcast and video as well as split by region as well as split by independent creators and businesses
6. No. of active creators monthly - split by audio, podcast and video as well as split by region

Retention:

1. Churn rate of ad-supported users in a month – split by region
2. Conversion of ad-supported users to premium users in a month – split by region
3. No. of users renewing their premium subscriptions monthly/yearly – split by region

Monetization:

1. Revenue generated through ads D/W/M - split by audio, podcast and video as well as split by region
2. MRR and ARR for the premium offering – split by region
3. ARPU in a month – split by region
4. Ratio of LTV to CAC every month – split by region
5. Average revenue per content creator monthly and yearly - split by audio, podcast and video as well as split by region
6. Average Royalty paid to content Creator monthly and yearly - split by audio, podcast and video as well as split by region

Now, lets look at the guardrail metrics –

• Feedback from both creators and users (positive/negative)
• Social media chatter about Spotify and its content
• Reports on the content added daily and the advertisements presented to users (to monitor whether the content contains hatred, misinformation or is immoral or is harmful for society)