Bryan Goldberg: We’ve got another question from Rich Greenfield on the product. Spotify recently began testing a Friend’s tab on the bottom strip of the app. Can you help us understand your thinking here?
Daniel Ek: Well, we do a lot of experiments on the product side in many different areas. So, what you probably have seen is one of those experiments. And since we’re not committed to rolling that out, I don’t really have much of a sort of comment, but to say that overall, we’re committed to creating the best audio experience for consumers and creators in the world. And obviously, social could be a meaningful driver of creating an even stickier and more engaging experience.
Bryan Goldberg: We’ve got a follow-up question. I’m from Doug Anmuth on subscribers. You typically see MAU to Premium subscriber conversion in the 12 to 18-month range. Do you expect any change to that conversion or to churn given the large MAU cohorts over the past couple of years?
Paul Vogel : So, I’d say, look, at a high level, we’ve said this repeatedly for a while, any time you’re seeing accelerating growth in MAU, that always tends to be very good for our business and lead to subscribers over time. At this point, we don’t see any reason why any of our historical trends would change. It’s always tough to know. But again, given the outperformance in MAU this year, that’s always a good harbinger for sub growth in the future. And with respect to churn, we don’t obviously give those numbers out. Year-over-year churn, though, was pretty consistent with where it was at this point last year. So even with the strong growth, we’re not seeing any uptick in churn at all.
Daniel Ek: The one addition I would probably just make is that it’s generally been true over the entire existence at Spotify that the longer a person stays with us, the higher the likelihood is that they’ll end up being a Premium subscriber over time. So again, country mix changes, maturity of those market changes and so on. So, when you look at the core behavior, it may take longer in some developing markets than it does in mature markets, et cetera. But the trend is the same, which is the longer they stay, the more likely they are to convert. And of course, the better the engaging experience, we make the more likely they are to stay. And therefore, the more likely it is to lead to positive business results for us long term.
Bryan Goldberg: All right. We’ve got time for one to two more questions. We’re going to go to the next one from Benjamin Black on margins. I think you classified 2022 as an investment year. So, could you break out — break down which investments are falling off that will drive the positive gross margin inflection in 2023 and 2024?
Paul Vogel : Yes. I think there’s — look, there’s a number of factors that are going to — that improve gross margin. I think we’ve talked about a lot of them. We’re going to continue to see Marketplace growth, which will help our music gross margin. A lot of the investments that we did in 2022 that were investments with no real sort of benefits to the revenue will start to hopefully bear fruit in ’23 and beyond. We’ve talked about podcasting that 2022 was going to be the peak year in terms of the drag that podcasting had on our gross margins. So, we expect that to get better in 2023 as well. So pretty consistent with what we’ve said in the past in terms of what the impacts were in 2022 and how that will change in ’23 and beyond.
