Spotify is changing its focus (AMZN, P)

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Spotify co-founder and CEO Daniel Ek will speak at the Cannes advertising festival this week as the music streaming service prepares to go all in on its plan to increase ad revenues, reports the Wall Street Journal.

Spotify is focusing on its ad-supported service, particularly after an internal mission statement that went around several weeks ago when all of the company's tech and product employees used Spotify's free, ad-supported product for five days. The product currently functions as a freemium service through which listeners can use the free, ad-supported version or a paid, ad-free version.

The company has 30 million paid subscribers and 70 million listeners on the ad-supported service to date.

This strategy allows Spotify to extract more revenue from the non-paying section of its listener base. Approximately 90% of the company's current revenue comes from the premium subscription tier, reports Digital Music News. And in 2015, subscription revenue represented $1.91 billion, while ad revenues climbed to $219 million, according to financial filings uncovered by Music Business Worldwide.

As more competitors enter this space, such as Amazon with its new standalone music service, Spotify will depend on these two strong revenue streams to stay ahead of the pack.

And the competition is already fierce. SoundCloud and Pandora both offer platforms on which advertisers can reach music streaming listeners. In order to lure in more advertisers, Spotify has expanded its ad offerings and has even discussed video ads. The company now allows brands to sponsor some of its owned-and-operated playlists, which can receive billions of streams each week.

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