Spotify's Audio Dominance: A Monopoly in the Making

Spotify has secured a monopoly-like status in the audio segment by transforming from a music application to a global utility, achieving a significant increase in operating income to €582 million ($688 million) in Q3 2025. The company operates on a variable-cost model, paying royalties only when users listen to tracks, protecting it from the hit-driven risks that plague video platforms. Spotify has expanded its gross margin to 31.6%, achieved a record Q3 free cash flow of €806 million ($953 million), and right-sized its cost structure for personnel and marketing.