Spotify is in an interesting spot. They have a premium membership, and make money from that. They also sell advertising, but the premium membership doesn’t have ads. So, they can only sell ads to be played for non-premium users.
They also have an incentive for the ads to be annoying-enough that you subscribe to premium, but not too annoying, or else you’ll go stream music with another provider. (They make more money from Premium than ads, but some money is better than no money.)
They also, it appears, have trouble selling all of the advertising slots in certain markets. When I’m in Lithuania, I hear far fewer ads than I hear in the US, and most of the ads are ads for Spotify premium – an ad slot they couldn’t fill with a paying ad. In Lithuania, the ad-frequency and annoyance-level are low enough that I will not upgrade.
However, when I’m in the US, I stop listening to Spotify due to the frequency of advertising. There are far more ads, which seem to be more aggressive/intrusive than the ads I hear in Lithuania. If I was in the US more often, I’d probably either subscribe to premium or use Apple Music or another streaming service.
Advertising level is a delicate balance for Spotify, and I imagine that the balance point is different for different users. Some users will tolerate a large amount of advertising without complaint, and others will leave and go elsewhere.
I wonder if there’s a reliable way to signal to Spotify the frequency of ads I’m willing to listen to? For example, if I closed Spotify every time I heard an ad, would the frequency of ads decrease? What about if I paused Spotify? I don’t think there’s a clear answer here, but it’s interesting to consider.
Mike Henry's blog 