Whatever happens, it will benefit Spotify. As with streaming TV, over time the majority of these advertising dollars will transition to on-demand platforms or disappear altogether as consumers opt for ad-free streaming subscriptions. Each year, over $10 billion is spent in the U.S. On the ad-supported side of things, Spotify operates with its free tier. In Africa and Southeast Asia, where music streaming penetration is far lower than in Western markets, there is even more room for services like Spotify to grow. For reference, in Sweden, Spotify's home country, 52% of the population pays for music streaming.
population subscribed to a music streaming service. It is estimated that at the end of 2019, only 30% of the U.S. Even in the U.S., one of its most mature markets, hundreds of millions of dollars are still spent each year on CDs and digitally owned music through platforms like iTunes. Over time, the majority of this spend should migrate to streaming services like Spotify, simply because these platforms offer a better value proposition for consumers. Spotify is entering more than 80 new markets in 2021, opening up the service to more than a billion potential new users in countries like Nigeria, Bangladesh, and Pakistan. Music streaming has been around for over a decade, but industry growth, especially in non-Western markets, is just getting started.
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