STOCKHOLM, Sweden: Spotify founder Daniel Ek will hand over day-to-day leadership of the music streaming giant in January, moving into an executive chairman role as the company reshapes itself under a new co-CEO model. The Swedish firm said that Ek, one of Europe's best-known tech entrepreneurs, will focus on capital allocation and long-term strategy while Gustav Soderstrom and Alex Norstrom take over as co-CEOs.

Ek, who launched Spotify in 2006 and has been its public face through its transformation into the world's biggest music platform, likened the transition to shifting "from a player to a coach." He stressed that, unlike a U.S.-style chairperson, his new position will involve hands-on guidance of company strategy.

Spotify's U.S.-listed shares slipped about five percent after the announcement, though they remain up 63 percent this year. Analysts said Ek departs the CEO role "on a high note, with big boots to fill," as Paolo Pescatore of PP Foresight put it.

The company remains far ahead of rivals in scale, with nearly 700 million monthly active users and more than 100 million tracks on its platform. Apple Music has about 90 million subscribers, while YouTube Music and Amazon Music lean on video libraries and Prime bundles to lure listeners. Still, Spotify has struggled with profitability pressures as artists push for higher royalties and advertising revenue grows more slowly than subscriptions.

Global recorded music revenue climbed 4.8 percent to US$29.6 billion in 2024, according to IFPI, with streaming surpassing $20 billion for the first time. Subscription platforms now account for over half of that total, underscoring the importance of Spotify's business model.

Spotify posted its first annual profit in 2024 after rounds of price hikes and cost-cutting, but investor scrutiny over margins remains sharp. Ek has argued that the company is entering a "second phase" that requires discipline in capital allocation and more diversified leadership.

Soderstrom, the current chief product and technology officer, will oversee Spotify's global tech strategy and product development. Norstrom, the chief business officer, will manage subscribers, advertising, and Spotify's music, podcast, and audiobook divisions. The three executives have worked together for more than a decade.

Other global tech players, including Oracle and Netflix, have used co-CEO structures to share responsibility in increasingly complex markets. But critics worry the arrangement blurs accountability. "The big unknown is why Spotify needs an executive chairman and two chief executives," said Dan Coatsworth of AJ Bell. "That conjures up the idea that too many cooks spoil the broth."