106/264 Benefits for Users We are focused on enabling the discovery and curation of music for our Users through our range of products and services: • Playlists and Personalization . Users benefit from our ability to help them navigate our more than 35 million tracks as of December 31, 2017. We do this by providing Users with editorially curated and machine­generated playlists. From the moment Users open the Spotify application, we serve them a personalized homepage with content that reflects our understanding of their music tastes, listening habits, musical moods, and daily activities. The homepage is a gateway to a universe of content, and we aim to make that universe accessible, dynamic, and engaging. We believe Users are more likely to engage with a platform that reflects their real­time moods and activities and captures a unique understanding of moments in their lives. • Ad­Supported and Premium Listening . We provide a wide range of listening options that meet the varying needs of our rapidly growing User base and also address our Users’ real­time moods and activities and capture a unique understanding of the moments in their lives. Our listening options include our Ad­Supported Service, Family Plan, Student Plan, and individual Premium subscriptions. Our Ad­Supported Service serves as both a Premium Subscriber acquisition channel and also a robust option for Users who are unable or unwilling to pay a monthly subscription fee but still want to enjoy access to a wide variety of high­quality music and other content. • Cross­Platform Flexibility . We strive to reach Users wherever they are in the world, which means that Spotify is built to be functional across multiple platforms—from smartphones to laptops to video game consoles to cars. The flexibility of our platform and the ability to access it via a single user ID across mobile, tablet, and other connected devices creates a seamless and integrated experience that is designed to fit a variety of lifestyles. In­home devices, such as Amazon’s Echo, Google’s Google Home and Chromecast, Sonos’ home theater systems, Sony’s PlayStation, and many smart TVs, all offer Spotify integrations. As an independent service, we are uniquely positioned to work with the broadest set of partners in the ecosystem. We continue to promote cross­platform engagement in order to make music accessible to anyone, anywhere, at any time. Benefits for Creators Spotify provides a large stage for creators and artists to connect with existing fans and to be discovered by new fans. In addition to providing artists with access to 159 million MAUs, we also provide artists with a full stack of tools and services, enabling them to grow their businesses on a single platform. • Monetization. Through December 31, 2017, we have paid more than €8 billion in royalties to artists, music labels, and publishers since our launch. In 2017, our expenses for rights holders grew by 27% year­over­year. We believe that our number of Premium Subscribers is nearly double the size of our nearest competitor, Apple Music. We also believe our Ad­Supported model is advantageous to creators, particularly recording artists in the United States, as United States radio does not compensate them for their work while Spotify pays royalties to those artists on our Service. • Discovery. We not only help artists connect with existing fans, but we also support artists in connecting with the Users who are most likely to become fans of their music. From our curation algorithms and data assets that surface new music to Users in playlists, to physical billboards, branded events, and personalized campaigns, we offer artists the tools to connect with fans, new and old. • Distribution. An artist who makes their music available on Spotify gains access to the largest global music streaming subscription service based on our 159 million MAUs as of December 31, 2017. We offer our Service in 61 countries and territories around the world. We enable artists to distribute entire albums and individual songs to this audience. We also place artists’ content on playlists, further amplifying their reach. Artists and their managers can track their distribution with song play data, playlist data, and playlist notifications. 99