The Big Spotify Shakeup: Founder/CEO Daniel Ek Steps Down, Co-CEOs Norström and Söderström Step Up

The Spotify universe just got a massive leadership shakeup. On September 30, 2025, founder and CEO Daniel Ek announced he’s officially stepping down from the top job, effective January 1, 2026. Ek will transition to the highly influential role of Executive Chairman. Executive Chairman In a move formalizing a process already underway, the company is elevating co-Presidents Gustav Söderström (Chief Product and Technology Officer) and Alex Norström (Chief Business Officer) to co-Chief Executive Officers. This strategic shift signals the end of Ek's nearly two-decade tenure overseeing daily operations, formalizing a dual-leadership structure that Spotify says has been successfully operating since 2023. co-Chief Executive Officers successfully operating since 2023 This reorganization is being positioned as an "evolutionary" step designed for massive scale. The official messaging emphasizes continuity, aiming to stabilize market perception following a year of significant stock gains driven by cost discipline and price increases. Crucially, this move serves a strategic purpose: it insulates the daily grind of operational execution from the founder’s knack for visionary, high-risk strategic bets—an area where analysts noted past execution failures. significant stock gains driven by cost discipline and price increases execution failures The immediate market response was skeptical. Goldman Sachs downgraded the stock from "Buy" to "Neutral," arguing that "much of the company's value is already priced in", indicating that future growth hinges entirely on the new co-CEOs’ ability to rapidly execute complex monetization strategies. skeptical "much of the company's value is already priced in" Section 1: The Founder’s Retreat: What Ek Will Actually Do The corporate messaging surrounding Daniel Ek’s transition was carefully crafted to say: I’m not leaving, I’m just focusing on the fun, high-level stuff. I’m not leaving, I’m just focusing on the fun, high-level stuff. The Real Message: "Very Little Will Change" While many expected a full resignation video, the research materials available do not contain an Ek resignation video transcript. One prominent source we found is actually an aggressive, critical letter to Daniel Ek penned by independent artist Travis Aweerts, who famously stated: "I refuse to let music, and the people who make it, be co-opted into something this dark. If that puts me in your way — so be it". to "I refuse to let music, and the people who make it, be co-opted into something this dark. If that puts me in your way — so be it" Ek’s true message was distributed via letters to staff, assuring them that the leadership change "simply matches titles to how we already operate". He stressed that "very little will change" for "most" employees, emphasizing that he is "not leaving," but is altering his "time and focus" to concentrate on "the big, defining decisions about our future". "simply matches titles to how we already operate" "very little will change" for "most" employees, emphasizing that he is "not leaving," but is altering his "time and focus" to concentrate on "the big, defining decisions about our future" The European Chairman Model: Big Bets Only Ek’s new role is explicitly modeled after the European Chairman system, which is essentially the strategic power center of the company. European Chairman system His core responsibilities moving forward will include ensuring AI integration drives the platform’s evolution, and managing high-level board engagement. By keeping his hands on the capital and the 5-year-plus vision, Ek ensures Spotify can still pursue the costly, visionary strategic bets (like early podcasting investments) that defined its history. This setup allows the new co-CEOs to focus relentlessly on near-term profitability and flawless operational execution. will include flawless operational execution Market Jitters and the Downgrade Rationale The market reacted with some apprehension. Goldman Sachs adjusted the price target to $765 from $770. The rationale wasn't that Spotify is fundamentally broken, but that "much of the company's value is already priced in". The stock’s massive rally was based on the successful profitability pivot already underway. The market is now demanding results based on execution—specifically, successful monetization and new product tiers—a mandate that rests with the new co-CEOs. apprehension price target to $765 from $770 "much of the company's value is already priced in" Section 2: The Ek Era: How He Changed Everything Daniel Ek’s legacy as CEO is undeniable: he scaled Spotify from a small Swedish startup into the global audio behemoth that fundamentally reshaped the music industry. Massive Scale and the Power of Trust Founded in 2008, Spotify was built on Ek’s radical vision: creating a product that was superior to piracy, based on the concept of trust. The freemium model became the cornerstone of this success. Under his leadership, Spotify became the global market leader in music streaming, beating giants like Apple and Amazon. trust cornerstone of this success global market leader in music streaming By Q2 2025, Spotify had commanded a user base of 696 million Monthly Active Users (MAU) and 276 million premium subscribers. Ek aims to leverage this base to achieve the ambitious goal of reaching 10% to 15% of the world’s population. He also pioneered a new market entry method, executing the first major(https://www.investopedia.com/news/spotify-files-1-billion-ipo/). At the time of filing, Spotify was valued around $19 billion. 696 million Monthly Active Users (MAU) and 276 million premium subscribers 10% to 15% of the world’s population https://www.investopedia.com/news/spotify-files-1-billion-ipo/ valued around $19 billion The exponential growth achieved during Ek’s CEO tenure is summarized below: Spotify's Growth Under Daniel Ek (2017-2025) Spotify's Growth Under Daniel Ek (2017-2025) Metric2017 (Approx.)2023 (Approx.)Q2 2025 (Latest Reported)Monthly Active Users (MAU)< 160 Million~602 Million696 Million 1Premium Subscribers< 70 Million~236 Million276 Million 2Annual Revenue (Euros)€4 Billion€13.25 BillionN/A (Q2 Rev: €4.19B) 1 Metric2017 (Approx.)2023 (Approx.)Q2 2025 (Latest Reported)Monthly Active Users (MAU)< 160 Million~602 Million696 Million 1Premium Subscribers< 70 Million~236 Million276 Million 2Annual Revenue (Euros)€4 Billion€13.25 BillionN/A (Q2 Rev: €4.19B) 1 Metric2017 (Approx.)2023 (Approx.)Q2 2025 (Latest Reported) Metric2017 (Approx.)2023 (Approx.)Q2 2025 (Latest Reported) Metric Metric 2017 (Approx.) 2017 (Approx.) 2023 (Approx.) 2023 (Approx.) Q2 2025 (Latest Reported) Q2 2025 (Latest Reported) Monthly Active Users (MAU)< 160 Million~602 Million696 Million 1Premium Subscribers< 70 Million~236 Million276 Million 2Annual Revenue (Euros)€4 Billion€13.25 BillionN/A (Q2 Rev: €4.19B) 1 Monthly Active Users (MAU)< 160 Million~602 Million696 Million 1 Monthly Active Users (MAU) < 160 Million ~602 Million 696 Million 1 1 Premium Subscribers< 70 Million~236 Million276 Million 2 Premium Subscribers < 70 Million ~236 Million 276 Million 2 2 Annual Revenue (Euros)€4 Billion€13.25 BillionN/A (Q2 Rev: €4.19B) 1 Annual Revenue (Euros) €4 Billion €13.25 Billion N/A (Q2 Rev: €4.19B) 1 1 The Pivot to Profitability Ek successfully diversified Spotify into a comprehensive audio technology platform by investing approximately $1 billion into podcasting and expanding into audiobooks and education. This move was about long-term user value. For instance, audiobook listening time increased by 35% year-on-year in key markets. comprehensive audio technology platform education audiobook listening time increased by 35% year-on-year in key markets Crucially, the final chapter of Ek’s CEO tenure was defined by a massive, successful pivot toward cost discipline and profitability. This yielded major financial results, including an operating income of €266 million in Q2 2024 and a gross margin that stabilized at 31.5% in 2025. This financial stability is the foundation upon which the new co-CEO structure is built. €266 million in Q2 2024 stabilized at 31.5% in 2025 Section 3: The Ethical Backlash and Unfinished Business Despite his success, Ek’s tenure was plagued by chronic monetization deficits and severe ethical scrutiny—liabilities the new co-CEOs inherit. The Problem with the Paycheck The long-running controversy over artist compensation is Spotify’s biggest PR hurdle. Spotify distributes around 70% of its revenue to rights holders, which translates to an average pay-per-stream rate between $0.003 and $0.005. $0.003 and $0.005 While Ek attempted to clarify the complex payment structure with the 2021 "Loud & Clear" website, he admitted it has been "very hard to change the narrative once that narrative has established itself". For many artists, the volume-based model creates a "moral and ethical burden". "very hard to change the narrative once that narrative has established itself" "moral and ethical burden" Execution Failures: Where the CEO Stumbled Analysts point to Ek’s "repeated failures to execute on new product tiers and monetize the advertising business" as a major risk. "repeated failures to execute on new product tiers and monetize the advertising business" The worst offender is the HiFi tier. Announced in 2021, the lossless streaming plan never arrived on time. It is now anticipated to launch in 2025, rebranded as "Music Pro," bundled with features like AI playlist customization, advanced mixing tools, and audiobook listening hours. This delay constrained ARPU growth. Similarly, fixing the ad-tech stack to accelerate revenue remains a critical open question for management, even as ad revenue is projected to rebound significantly. AI playlist customization, advanced mixing tools, and audiobook listening hours projected The Military AI Fallout The most significant ethical liability came from Ek's personal ventures: his investment in the defense technology company, Helsing. Ek’s venture firm led a €600 million funding round for Helsing, a defense tech firm that manufactures its own military drone, the HX-2. investment in the defense technology company, Helsing manufactures its own military drone, the HX-2 This investment caused high-profile protests joined by several other acts. The transition to Executive Chairman closely follows these protests, suggesting it is a deliberate attempt to distance the core Spotify brand from the founder’s controversial capital allocations. high-profile protests Analysis of Ethical Risk: Daniel Ek's Investment in Helsing Analysis of Ethical Risk: Daniel Ek's Investment in Helsing CategorySpecific DetailImpact on SpotifyInvestment VehiclePrima Materia (Daniel Ek's VC Firm) led funding roundReputational risk tied directly to the founder's capital allocationInvestment Size€600 million (£520 million)Substantial capital commitment to defense technologyProduct & FunctionMilitary AI software analyzing battlefield data; HX-2 drone manufacturingLed to moral and ethical protests from high-profile artistsArtist ReactionMassive Attack, King Gizzard, Godspeed You! Black Emperor remove cataloguesIncreased pressure on Spotify’s reliance on creative talent; raises platform stability concerns CategorySpecific DetailImpact on SpotifyInvestment VehiclePrima Materia (Daniel Ek's VC Firm) led funding roundReputational risk tied directly to the founder's capital allocationInvestment Size€600 million (£520 million)Substantial capital commitment to defense technologyProduct & FunctionMilitary AI software analyzing battlefield data; HX-2 drone manufacturingLed to moral and ethical protests from high-profile artistsArtist ReactionMassive Attack, King Gizzard, Godspeed You! Black Emperor remove cataloguesIncreased pressure on Spotify’s reliance on creative talent; raises platform stability concerns CategorySpecific DetailImpact on Spotify CategorySpecific DetailImpact on Spotify Category Category Specific Detail Specific Detail Impact on Spotify Impact on Spotify Investment VehiclePrima Materia (Daniel Ek's VC Firm) led funding roundReputational risk tied directly to the founder's capital allocationInvestment Size€600 million (£520 million)Substantial capital commitment to defense technologyProduct & FunctionMilitary AI software analyzing battlefield data; HX-2 drone manufacturingLed to moral and ethical protests from high-profile artistsArtist ReactionMassive Attack, King Gizzard, Godspeed You! Black Emperor remove cataloguesIncreased pressure on Spotify’s reliance on creative talent; raises platform stability concerns Investment VehiclePrima Materia (Daniel Ek's VC Firm) led funding roundReputational risk tied directly to the founder's capital allocation Investment Vehicle Prima Materia (Daniel Ek's VC Firm) led funding round Reputational risk tied directly to the founder's capital allocation Investment Size€600 million (£520 million)Substantial capital commitment to defense technology Investment Size €600 million (£520 million) Substantial capital commitment to defense technology Product & FunctionMilitary AI software analyzing battlefield data; HX-2 drone manufacturingLed to moral and ethical protests from high-profile artists Product & Function Military AI software analyzing battlefield data; HX-2 drone manufacturing Led to moral and ethical protests from high-profile artists Artist ReactionMassive Attack, King Gizzard, Godspeed You! Black Emperor remove cataloguesIncreased pressure on Spotify’s reliance on creative talent; raises platform stability concerns Artist Reaction Massive Attack, King Gizzard, Godspeed You! Black Emperor remove catalogues Increased pressure on Spotify’s reliance on creative talent; raises platform stability concerns Section 4: The Co-CEO Duo: Operational Architects The selection of Gustav Söderström and Alex Norström is not a typical hand-off; it’s a strategic division of labor designed to maximize efficiency. The operational workload is split cleanly across two complex domains: product innovation and monetization. Both executives have deep history with the company, having served for more than 15 years. having served for more than 15 years Söderström (Product) vs. Norström (Business) The co-CEO structure formalizes a partnership that has successfully already been operating: Gustav Söderström (Co-CEO, Product & Tech): Söderström’s focus is the tech engine. He'll drive innovation, ensuring successful product launches (like the HiFi/Music Pro tier) and deep AI integration to maintain product development. His primary challenge is resolving the company’s history of complex product execution failures.Alex Norström (Co-CEO, Business & Monetization): Norström’s focus is the money engine. He has overseen the subscriber base grow from less than one million to over 300 million. His mandate is to drive ARPU growth through smart pricing and fixing the ad-tech stack, particularly leading global expansion into underpenetrated markets like Asia and Africa. Gustav Söderström (Co-CEO, Product & Tech): Söderström’s focus is the tech engine. He'll drive innovation, ensuring successful product launches (like the HiFi/Music Pro tier) and deep AI integration to maintain product development. His primary challenge is resolving the company’s history of complex product execution failures. Gustav Söderström (Co-CEO, Product & Tech): maintain product development. complex product execution failures Alex Norström (Co-CEO, Business & Monetization): Norström’s focus is the money engine. He has overseen the subscriber base grow from less than one million to over 300 million. His mandate is to drive ARPU growth through smart pricing and fixing the ad-tech stack, particularly leading global expansion into underpenetrated markets like Asia and Africa. Alex Norström (Co-CEO, Business & Monetization): 300 million Asia and Africa Division of Executive Responsibility: Ek and Co-CEOs (Post-Jan 2026) Role/ExecutivePrimary Focus AreasStrategic MandateSourceDaniel Ek (Executive Chairman)Capital Allocation, Long-term Strategy (5+ years), AI Integration, M&A, Global Expansion (Asia/Africa)Maintaining founder vision and strategic oversight, managing external risks/investmentsMusicrowGustav Söderström (Co-CEO, Product & Tech)Product Development, Engineering Execution, User Experience, AI-driven DiscoveryDriving product innovation and successful rollout of new premium tiers (e.g., HiFi/Music Pro)Paragon IntelAlex Norström (Co-CEO, Business & Monetization)Operational Execution, Business Development, Subscription Growth, Advertising Revenue, Pricing StrategyAccelerating monetization, addressing ad-tech failures, and managing pricing increasesGuruFocus Role/ExecutivePrimary Focus AreasStrategic MandateSourceDaniel Ek (Executive Chairman)Capital Allocation, Long-term Strategy (5+ years), AI Integration, M&A, Global Expansion (Asia/Africa)Maintaining founder vision and strategic oversight, managing external risks/investmentsMusicrowGustav Söderström (Co-CEO, Product & Tech)Product Development, Engineering Execution, User Experience, AI-driven DiscoveryDriving product innovation and successful rollout of new premium tiers (e.g., HiFi/Music Pro)Paragon IntelAlex Norström (Co-CEO, Business & Monetization)Operational Execution, Business Development, Subscription Growth, Advertising Revenue, Pricing StrategyAccelerating monetization, addressing ad-tech failures, and managing pricing increasesGuruFocus Role/ExecutivePrimary Focus AreasStrategic MandateSource Role/ExecutivePrimary Focus AreasStrategic MandateSource Role/Executive Role/Executive Primary Focus Areas Primary Focus Areas Strategic Mandate Strategic Mandate Source Source Daniel Ek (Executive Chairman)Capital Allocation, Long-term Strategy (5+ years), AI Integration, M&A, Global Expansion (Asia/Africa)Maintaining founder vision and strategic oversight, managing external risks/investmentsMusicrowGustav Söderström (Co-CEO, Product & Tech)Product Development, Engineering Execution, User Experience, AI-driven DiscoveryDriving product innovation and successful rollout of new premium tiers (e.g., HiFi/Music Pro)Paragon IntelAlex Norström (Co-CEO, Business & Monetization)Operational Execution, Business Development, Subscription Growth, Advertising Revenue, Pricing StrategyAccelerating monetization, addressing ad-tech failures, and managing pricing increasesGuruFocus Daniel Ek (Executive Chairman)Capital Allocation, Long-term Strategy (5+ years), AI Integration, M&A, Global Expansion (Asia/Africa)Maintaining founder vision and strategic oversight, managing external risks/investmentsMusicrow Daniel Ek (Executive Chairman) Daniel Ek (Executive Chairman) Capital Allocation, Long-term Strategy (5+ years), AI Integration, M&A, Global Expansion (Asia/Africa) Maintaining founder vision and strategic oversight, managing external risks/investments Musicrow Gustav Söderström (Co-CEO, Product & Tech)Product Development, Engineering Execution, User Experience, AI-driven DiscoveryDriving product innovation and successful rollout of new premium tiers (e.g., HiFi/Music Pro)Paragon Intel Gustav Söderström (Co-CEO, Product & Tech) Gustav Söderström (Co-CEO, Product & Tech) Product Development, Engineering Execution, User Experience, AI-driven Discovery Driving product innovation and successful rollout of new premium tiers (e.g., HiFi/Music Pro) Paragon Intel Paragon Intel Alex Norström (Co-CEO, Business & Monetization)Operational Execution, Business Development, Subscription Growth, Advertising Revenue, Pricing StrategyAccelerating monetization, addressing ad-tech failures, and managing pricing increasesGuruFocus Alex Norström (Co-CEO, Business & Monetization) Alex Norström (Co-CEO, Business & Monetization) Operational Execution, Business Development, Subscription Growth, Advertising Revenue, Pricing Strategy Accelerating monetization, addressing ad-tech failures, and managing pricing increases GuruFocus GuruFocus The Ultimate Boss This ensures that while management is specialized, the ultimate strategic power remains centralized with the founder. This structure leverages Spotify’s existing agile organizational design, which relies on small, autonomous teams that thrive under clear, specialized leadership. agile organizational design Section 5: Spotify’s Future: Where They Go From Here (2026–2030) Under the new operational leadership, Spotify is entering a mature growth phase defined by ruthless focus on monetization and strategic AI platform shifts. The Monetization Mission The immediate challenge for the co-CEOs is boosting Average Revenue Per User (ARPU). The launch of the Music Pro/HiFi tier is the critical test. It must deliver compelling value—such as enhanced audio quality, advanced mixing, AI playlist tools, and bundled audiobooks—to justify a premium price point and drive significant revenue lift, proving the company can execute on high-value products after years of delays. enhanced audio quality, advanced mixing, AI playlist tools, and bundled audiobooks Fixing the Ad Gap Spotify's future hinges on solving the monetization gap in its non-premium segment. While user growth is expected to continue (MAU is projected to exceed 800 million by 2032), the ad-tech stack must be successfully integrated across non-music content to maximize returns from the vast user base Ek built. 800 million by 2032 The AI and Ethics Tightrope Ek’s focus on AI is in direct tension with the ethical backlash from his military AI investment. The co-CEOs must delicately manage public perception, ensuring that Spotify’s internal, consumer-focused AI strategy is explicitly decoupled from the founder's defense-sector ventures to prevent further artist boycotts and brand damage. The Global Balancing Act Spotify continues to aggressively pursue expansion into high-volume, underpenetrated markets, with Ek prioritizing Asia and Africa. The ambition is still to reach 10% to 15% of the global population. The Norström-Söderström partnership must balance this volume-driven, lower-margin expansion with high-ARPU strategies in the West to maintain profitability expectations. Asia and Africa 10% to 15% of the global population Conclusion: A Succession Designed for Scale and Scrutiny Daniel Ek’s transition from CEO to Executive Chairman isn't a retirement; it's a strategic elevation that moves the company from its disruptive startup phase into a disciplined, mature era. This move formalizes the segregation of roles, freeing Ek to chase visionary projects while shielding operational management from that strategic volatility. The co-CEO structure—the specialized partnership of Alex Norström (Business) and Gustav Söderström (Product)—is Spotify’s attempt to resolve its chronic execution deficits in monetization and product delivery. But is CEO a two person job? Their success will be judged not on user count, but on profitable execution: delivering the promised HiFi tier, fixing the advertising business, and skillfully navigating the ethical minefield left by the founder's military investments. Ek’s vision remains the north star, but the architects of Spotify’s financial future are now the co-CEOs.