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Speaker 1: Welcome, Welcome, Welcome back to Bob Lofstett's podcast. My guest

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Speaker 1: today is Charlie Eleman of Spotify. He's the VP Global

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Speaker 1: Head of Music Product. What is that in English?

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Speaker 2: Charlick English? Yeah, nice to be here, Bob. Head of

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Speaker 2: Music Product means I look after our end to end

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Speaker 2: music offering, mostly you know, in terms of our services

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Speaker 2: to labels and publishers, artists and songwriters, So all the

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Speaker 2: tools that they use to get their music on Spotify,

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Speaker 2: promote their music, manage their their profiles, and our overall

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Speaker 2: policies of running the music vertical for Spotify.

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Speaker 1: Okay, what involving music does not come under your purview?

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Speaker 2: Well, so David Kafer and I run the music vertical together.

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Speaker 2: He manages things like license and sing and artists relations.

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Speaker 2: I manage more of the product side, and together we

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Speaker 2: co lead the music vertical at Spotify.

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Speaker 1: Okay, who would be overseeing the people who create playlists? Yeah?

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Speaker 2: The editorial team, the human editorial team is also part

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Speaker 2: of the music vertical. They report in to David Kaefer.

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Speaker 2: But like I said, the two of us are joined

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Speaker 2: at the hip and working on all of that together

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Speaker 2: every day.

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Speaker 1: Okay. From thirty thousand feet. Yeah, he deals with licensing

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Speaker 1: with the labels. Yeah, what do you deal with the labels?

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Speaker 2: So, for instance, like our Spotify for Artist product, which

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Speaker 2: is how the labels see how they're doing, manage their

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Speaker 2: presence on Spotify, promote their music, et cetera.

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Speaker 1: Okay, So in terms of ingesting music, yeah, that is

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Speaker 1: not your thing. In terms of relationships with music and

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Speaker 1: promoting the music from labels, that is your thing.

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Speaker 2: That's right. Yeah. I've been at Spotify now for fourteen years,

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Speaker 2: so obviously my role has evolved quite a bit over

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Speaker 2: the years. But recently my role expanded to being responsible

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Speaker 2: for the music vertical overall, which just means as we've

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Speaker 2: gone into podcasts and audiobooks, other leaders look after those

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Speaker 2: verticals and I try to look after our music proposition

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Speaker 2: end in.

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Speaker 1: Okay, you talk about the labels, How do you deal

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Speaker 1: with independent labels and independent artists?

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Speaker 2: Yeah, great question, and that's been something that's evolved a

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Speaker 2: ton over the years. As you know. I mean, we

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Speaker 2: released our Loud and Clear Report today which you might

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Speaker 2: have seen, and in twenty twenty four, fifty percent of

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Speaker 2: all of our payouts went to indies, which is just

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Speaker 2: a huge sea change from where it was, you know,

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Speaker 2: even a decade ago. And so for indies, that spanned

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Speaker 2: everything from a do it yourself artist that might be

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Speaker 2: coming through distro kid or tune core and they use

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Speaker 2: Spotify for artists and manage their profile, you know, run

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Speaker 2: their promotions, et cetera, all the way to you know,

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Speaker 2: a pretty big indie label that might have a direct

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Speaker 2: custom deal with Spotify and kind of everything in between.

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Speaker 2: So the range of what is included in indies is

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Speaker 2: pretty broad.

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Speaker 1: Okay, let's just stay there. Can you tell us more

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Speaker 1: about the trends of consumption.

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Speaker 2: Yeah, I mean, I think the biggest one that stands

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Speaker 2: out to me is that year over year, in addition

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Speaker 2: to just payouts growing and the overall size of the

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Speaker 2: pie growing, which is great, it's being cut up in

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Speaker 2: a lot more ways. They're just a lot more types

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Speaker 2: of success stories happening now than we're happening five years

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Speaker 2: or ten years ago. So, you know, I think even

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Speaker 2: if you go back twenty years, maybe twenty percent of

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Speaker 2: plays and downloads we're coming from the top forty songs.

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Speaker 2: That's now down to two percent something like that, And

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Speaker 2: so things have gotten cut up into a lot smaller

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Speaker 2: niches in music, so less top heavy and more kind

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Speaker 2: of middle tier artists having sustainable fan bases but might

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Speaker 2: not be superstars. I think that's been the biggest shift

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Speaker 2: in consumption patterns over the last ten years or so.

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Speaker 1: Okay, let's just assume I'm somebody through distro kid yeah

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Speaker 1: or CD baby, one of these independent aggregators. Yeah, can

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Speaker 1: I touch you?

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Speaker 2: What do you mean?

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Speaker 1: I would assume if I'm universal, there's a direct pipeline

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Speaker 1: between them and you. They have the largest market share.

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Speaker 2: Whatever, I see what you mean.

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Speaker 1: Let's say that I'm an independent artist. Is there any

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Speaker 1: way to interact with someone at Spotify?

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Speaker 2: Yeah, we try to have avenues at all different levels

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Speaker 2: of scale. So I'll give you an example. Our human

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Speaker 2: editorial team. If you go back, you know, say, five

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Speaker 2: eight years, a lot of that was through human interaction.

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Speaker 2: Like they were getting sent pre release music that was

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Speaker 2: going to come out, they were listening to stuff that

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Speaker 2: they were getting sent, and you know, they have limited

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Speaker 2: hours in the day, right, so they're trying to be

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Speaker 2: on top of everything, but they're only exposed to so much.

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Speaker 2: So one of the things that we did was through

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Speaker 2: Spotify for artists. We launched what we call New Music Submission,

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Speaker 2: this playlist pitching tool where everyone, even if you're a

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Speaker 2: do it yourself artist, you upload your music and then

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Speaker 2: you can tag it with a bunch of stuff, tell

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Speaker 2: the story, what instruments are used, you know who's in

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Speaker 2: the band, all this kind of stuff, tag it with genres,

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Speaker 2: and then that all goes into one workflow for the editors.

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Speaker 2: So it doesn't matter if you're from Republic or if

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Speaker 2: you're from District Kid. It all comes into one funnel

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Speaker 2: and it goes into you know, if you're an indie

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Speaker 2: rock editor, you get all the stuff tagged for indie rock,

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Speaker 2: and then you you listen to the pre release music

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Speaker 2: and try to tag up you know, what's showing promise,

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Speaker 2: what we're we're gonna believe in, what we're gonna give

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Speaker 2: some editorial love to. And so through things like that,

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Speaker 2: we've tried to streamline it. So the levels of access

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Speaker 2: are pretty uniform, you know, regardless of the kind of

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Speaker 2: label set up the.

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Speaker 1: F Let's say I'm an independent artist, I'm through one

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Speaker 1: of those aggregators. Yeah, but I have money to spend,

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Speaker 1: h Can I immediately get access? Say, well, you know,

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Speaker 1: I want certain stuff that you offer the big labels

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Speaker 1: because I'm willing to pay for it.

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Speaker 2: Yeah, that's another area where we've really streamlined and made

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Speaker 2: the same tools accessible for everyone. So there's two types

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Speaker 2: of promotional offerings that we offered a labels big and small.

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Speaker 2: One is what we call native ads. So these are

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Speaker 2: things where if you come into Spotify you might see

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Speaker 2: you know, sponsored recommendation or new release and it's featured

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Speaker 2: and artists, you know, whether they're on the biggest label

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Speaker 2: or they're do it yourself. They can come into Spotify

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Speaker 2: for artists and they can book a campaign. They can

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Speaker 2: target dormant fans or existing fans or potential listeners, and

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Speaker 2: they can use a cash budget for that. You know,

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Speaker 2: works very similarly the way a lot of digital advertising works.

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Speaker 2: And again because we've launched that in a self serve way,

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Speaker 2: everybody has equal access to that. The other program that

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Speaker 2: I would argue is even more accessible is Discovery Mode,

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Speaker 2: and it's more accessible because it actually requires zero upfront budget.

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Speaker 2: So with Discovery Mode, you say, here are my promotional priorities,

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Speaker 2: these are the tracks I'm really trying to work. I

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Speaker 2: want you to try to find spotify any opportunity for

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Speaker 2: this to show up in more relevant place. And I

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Speaker 2: don't put in budget on the front end. I accept

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Speaker 2: a commission of my royalty rate on the back end

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Speaker 2: when you pay me next month. And because it doesn't

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Speaker 2: require upfront budget, it really levels the playing field so

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Speaker 2: that it doesn't advantage people that have the most you know,

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Speaker 2: cash on hand for marketing. But just you know, whatever

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Speaker 2: is the most relevant in the system, which you know,

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Speaker 2: we're really proud of.

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Speaker 1: That, Okay, you know, staying with the independent artists because

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Speaker 1: there's not a lot of light on this particular sphere. Yeah,

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Speaker 1: I am an independent artist. Let's go with the latter.

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Speaker 1: And I say, okay, I am checking in these discovery modes.

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Speaker 1: If people listen, I will accept a reduce royalty. Yeah,

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Speaker 1: but what are the odds that people are gonna actually

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Speaker 1: hear my stuff?

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Speaker 2: It performs pretty well. It's it's I think it's been,

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Speaker 2: you know, certainly our most successful promotional product today. So

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Speaker 2: I can explain a little bit more and detail how

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Speaker 2: it works. But generally people say, you know, if you

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Speaker 2: look at how many streams you got before putting in

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Speaker 2: discovery mode and streams you got after putting in discovery mode,

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Speaker 2: typically you're seeing you know, fifty one hundred hundred and

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Speaker 2: fifty percent higher royalties because of the lift and streams,

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Speaker 2: you get.

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Speaker 1: A little bit more granular. Yeah, how does it actually work? Sure?

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Speaker 2: Okay, So discovery mode operates in algorithmic playlists. So these

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Speaker 2: are things like you know, radio stations or AutoPlay, right,

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Speaker 2: and when a radio station is formed, there's two steps

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Speaker 2: to this. So first, you know you're making it a

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Speaker 2: Dell radio station. There might be three four, five hundred

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Speaker 2: songs that are relevant for a Dell radio station. You know,

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Speaker 2: Slean Beyond to Beyonce. You could go a lot of

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Speaker 2: different ways. So you create a pool of all the

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Speaker 2: most hyper relevant stuff. But then you got to sequence

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Speaker 2: that playlist, right, like does this user typically like Selean

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Speaker 2: theon or do they like Beyonce? What are they famili

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Speaker 2: you're with? Or what's going to be more of a

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Speaker 2: new discovery for them? You have to have some variations,

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Speaker 2: so it's not you know, all Adele in the beginning

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Speaker 2: and then all the other stuff, right, So a lot

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Speaker 2: of the goodness comes in the sequencing. So the only

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Speaker 2: thing that discovery mode does is after the track pool

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Speaker 2: has already been set up. It only affects the sequencing,

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Speaker 2: So there's maybe fifty or one hundred things that go

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Speaker 2: into the sequencing, and discovery mode adds that one more ingredient.

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Speaker 2: To say, factor in the fact that you know, this

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Speaker 2: is the promotional priority for this artist, and because of that,

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Speaker 2: it's going to get sequenced often higher in the list

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Speaker 2: than it would have if it were not in discovery mode.

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Speaker 2: Does that make sense?

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Speaker 1: Yeah, but let's just go even deeper. User creates a

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Speaker 1: radio station, Yeah, we'll use your example at Dell. Are

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Speaker 1: we saying conventionally there's five hundred tracks or is that

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Speaker 1: a number you just used.

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Speaker 2: Yeah, it's usually a track pool for radio stations, a

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Speaker 2: few hundred tracks. That's about right.

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Speaker 1: Okay, there's five hundred tracks. The tracks in that pool

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Speaker 1: are based on daddy you got from the listener, uh huh.

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Speaker 1: And the rotation because as you said, you don't want

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Speaker 1: all adele first in all unknown at the end. How

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Speaker 1: is the rotation established?

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Speaker 2: So the sequencer it has all these different dimensions to it.

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Speaker 2: But it's like we have to have a good mix

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Speaker 2: of familiarity and discovery. So some tracks that you're going

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Speaker 2: to recognize in some that you don't. We want a

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Speaker 2: good diversity of mix of artists. We want to have,

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Speaker 2: you know, diversity of old versus new. So a lot

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Speaker 2: of different factors go into it, and then discovery mode

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Speaker 2: becomes one of those factors that goes into the ordering

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Speaker 2: that we give the user.

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Speaker 1: Okay, so let's just use your number of five hundred. Yeah,

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Speaker 1: how do we decide if my discovery mode track goes

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Speaker 1: with the Dell as a post to Deftones, and what

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Speaker 1: if everybody wants to be with it? Don't.

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Speaker 2: Well, since discovery mode only affects the sequencer, it can

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Speaker 2: only move within a trackpool it's already in. You cannot

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Speaker 2: use discovery mode to inject a track into a radio

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Speaker 2: station that it wouldn't have already been in. The only

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Speaker 2: thing it influences is the rank within the track pool.

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Speaker 1: Okay, once again, very deep. I upload my stuff, I

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Speaker 1: say I want discovery mode. Yeah, how do I know

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Speaker 1: what acts and how many acts would I be in

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Speaker 1: that pool of tracks?

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Speaker 2: So we have these pre campaign analytics for you that

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Speaker 2: show you this is where you're at. These are some

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Speaker 2: suggestions of what might perform well, and then you can

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Speaker 2: take those suggestions or ignore those suggestions. You try something,

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Speaker 2: and then you get a report that's like, this is

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Speaker 2: the amount of uplift each of these tracks got. These

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Speaker 2: ones are ROI positive because they're getting more royalties than

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Speaker 2: they did before. These ones. It's not resonating, like we

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Speaker 2: tried to give it more spins, but it's not performing

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Speaker 2: well and so it's staying flat and so you're accepting

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Speaker 2: a discount, but it's not really worth it for you.

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Speaker 2: So you get all this reporting and then you make

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Speaker 2: adjustments for next month about what you want to try.

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Speaker 2: That's different.

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Speaker 1: Okay, is it month by month?

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Speaker 2: It is month by month, Yeah, because that's the royalty

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Speaker 2: reporting cycle, and so it's a good, you know cycle.

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Speaker 1: So everybody's on the same month exactly counter month. Okay,

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Speaker 1: let's say I'm a complete unknown quote Bob Dylan, do

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Speaker 1: I get discovery options.

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Speaker 2: For discovery mode? We need the system needs to know

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Speaker 2: a bit about you in the algorithm, right, because since

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Speaker 2: you have to already be in the track pulls to

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Speaker 2: get you know, moving up and moving down, if the

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Speaker 2: algorithm has no idea where you're relevant, it can't process

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Speaker 2: the track for discovery mode. So you have to have

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Speaker 2: some minimum presence in radio stations or algorithm mixes. All right,

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Speaker 2: it still means that there's like hundreds of thousands of

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Speaker 2: uploaders who have access to the tool. But you can't

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Speaker 2: start from absolute zero.

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Speaker 1: Okay, so let's just doue them. I'm starting from nothing. Yeah,

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Speaker 1: in order to be eligible, is it as simple as

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Speaker 1: someone's got to listen to my track or people have

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Speaker 1: to listen to my track a thousand times on Spotify?

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Speaker 1: How do we create the data that gives us the

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Speaker 1: ability to go to discovery mode?

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Speaker 2: Yeah, you need some thousands of streams and then you'll

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Speaker 2: see in Spotify for artists when the algorithm on the

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Speaker 2: radio and mix aside has picked it up enough where

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Speaker 2: you're now eligible for it.

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Speaker 1: And to be clear, this is all algorithmic radio playlist

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Speaker 1: has got nothing to do with curated.

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Speaker 2: Playlists, That's right.

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Speaker 1: We have.

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Speaker 2: Two separate worlds, the man in the machine and for

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Speaker 2: editorial playlists like Today's Top Hits, rap CA stuff like that,

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Speaker 2: discovery mode has no impact on it whatsoever. It's only

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Speaker 2: for kind of the lean back sessions where people are

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Speaker 2: open to discovery and like a wide variety of tracks

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Speaker 2: where the discovery mode promotion system operates.

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Speaker 1: Okay, what percentage of Spotify listening is in lean back mode?

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Speaker 2: Well, it's increase over the years, is the algorithms have

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Speaker 2: gotten better and better. I think it's grown from ten

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Speaker 2: to fifteen towards twenty percent. Is you know, all the

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Speaker 2: personalized mixes, algorithmic mixes, auto play radio things like that.

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Speaker 1: Okay, let's say I create a radio station with Dell.

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Speaker 1: We understand that, Yeah, but also Spotify serves me a

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Speaker 1: lot of algorithmic playlist to me. Yeah. If an act

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Speaker 1: signs up for discovery mode, will it potentially be placed there?

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Speaker 2: The types of mixes that it's in are kind of

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Speaker 2: the lean back mixes. So these could be things like

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Speaker 2: daily mix We usually make a user five or six

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Speaker 2: daily mixes that are each of the users what we

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Speaker 2: call taste clusters or artists mix Like, here's a mix

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Speaker 2: of you know, adele like music for you, genre mixes,

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Speaker 2: you know, hip hop for you, those kind of mixes.

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Speaker 1: Let's just say I'm using Discovery Mode and I get traction. Yeah,

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Speaker 1: let's just say, for the sake of discussion, my royalty

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Speaker 1: pool is increased. What are my options after I get traction?

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Speaker 2: Well, I mean usually what we see is obviously artists

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Speaker 2: are doing a bunch of different things across a bunch

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Speaker 2: of different platforms at the same time to try to

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Speaker 2: build buzz. So usually it's combining maybe native ads and

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Speaker 2: discovery mode on Spotify, but then also you know, organic

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Speaker 2: interest that they're trying to drum up on social media,

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Speaker 2: maybe paid advertising on social media as well. It's even

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Speaker 2: as you get bigger and bigger sponsorship out of home,

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Speaker 2: et cetera. So it's usually part of a broader picture.

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Speaker 2: But typically, you know, like what we see is if

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Speaker 2: you get traction and you see something's really resonating. One

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Speaker 2: of the things that's really cool about discovery mode is

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Speaker 2: it's kind of like a heat seeker where it will

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Speaker 2: route someone to say, oh, if that thing's resonating really well,

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Speaker 2: I wasn't thinking about that one being the next single

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Speaker 2: that I'm really promoting. But maybe I'm gonna change the

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Speaker 2: plan a little bit, put a bit more emphasis on

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Speaker 2: that because it seems to be having, you know, some

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Speaker 2: kind of grounds well.

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Speaker 1: Wait, wait, a lot of stuff going on there. If

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Speaker 1: I'm in discovery mode and I have enough traction such

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Speaker 1: that you're doing it, yeah, do I pick a specific

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Speaker 1: track or do you take it from a pool of tracks?

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Speaker 1: How does that work?

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Speaker 2: So an artist could come in or their label, you know,

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Speaker 2: if you're if you're doing it at that scale, and

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Speaker 2: they could put one track into discovery mode, or they

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Speaker 2: could put eight tracks. You know, it's up to them

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Speaker 2: how pointed they want to be with it and tactical

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Speaker 2: versus more broad and using the tool.

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Speaker 1: So let's just assume that I'm gaining traction. What is

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Speaker 1: the next level I'm eligible for?

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Speaker 2: Its Spotify Well, I mean hopefully the way that we

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Speaker 2: see it working organically is signals kind of pick up

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Speaker 2: and ladder on each other. So if you're doing well

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Speaker 2: in radio, then the algorithm's going to notice that and

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Speaker 2: start putting you more and more in other contexts. On

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Speaker 2: the editor's dashboards, they're going to see, oh, you know,

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Speaker 2: the save rate on this thing is super high. Everyone

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Speaker 2: that listens to it wants to save it, so they're

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Speaker 2: going to consider it more for things when we're thinking

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Speaker 2: about artists to partner with, you know, a radar artist

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Speaker 2: or some of the programs that we do to build

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Speaker 2: artist brands. It all kind of feeds into the better

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Speaker 2: a track is performing. All those opportunities start, you know,

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Speaker 2: opening up for ours.

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Speaker 1: Let's be very clear, this is a business of hype

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Speaker 1: and bullshit. Okay, let's assume I have some traction. They're

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Speaker 1: gonna be people who try to make contact with you,

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Speaker 1: who are gonna spin a story. I'm gonna be on television,

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Speaker 1: I'm selling tickets, et cetera, et cetera. How do you

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Speaker 1: separate the week from the chat?

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Speaker 2: Yeah, I mean we see it a lot. I think

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Speaker 2: there are things that spike, and then there are things

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Speaker 2: that have staying power, and I think we've gotten pretty

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Speaker 2: good at especially when things are in our programming or

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Speaker 2: editorial programming or algorithmic programming. You kind of see it

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Speaker 2: in the data, right, Like when someone listens to the song,

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Speaker 2: how often do they go back to it next week?

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Speaker 2: How often do they save it and make it one

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Speaker 2: of the things in their playlist, how often they sharing

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Speaker 2: it with friends? You can't really fake that stuff in

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Speaker 2: terms of the response you're getting from real human beings.

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Speaker 2: And so you might get some noise in the data

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Speaker 2: from something having like a meme moment on TikTok or

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Speaker 2: you know, getting featured somewhere, but it's pretty easy for

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Speaker 2: us to see what's gonna kind of stick with it

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Speaker 2: and have staying power.

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Speaker 1: Okay, I'm clicking boxes for discovery mode. Yeah, let's just

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Speaker 1: assume I continue to have more and more success. At

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Speaker 1: what point do I talk to a human being?

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Speaker 2: Well, I mean I don't. I don't say this to

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Speaker 2: say we don't want to talk to artists and levels

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Speaker 2: we talk to artisans.

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Speaker 1: Listen, I don't want to talk to people. I'd rather

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Speaker 1: deal with email, whatever, So continue.

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Speaker 2: You know, It's just the point I'm trying to make is,

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Speaker 2: you know, the music ecosystem is pretty small, right, like

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Speaker 2: this industry. It's a small industry and relationships matter. I

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Speaker 2: don't want to like deny that, but at the same time,

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Speaker 2: I think it's been good for the industry that more

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Speaker 2: and more is done on the basis of, you know,

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Speaker 2: how is something actually performing and how's it resonating with

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Speaker 2: fans more so than who you know and who you're

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Speaker 2: connected to. So we try to make it so the

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Speaker 2: top of the mountain isn't about getting to talk to

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Speaker 2: someone you know. It shouldn't require you having a friend

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Speaker 2: in the company, so that's not really all roads don't

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Speaker 2: lead to And then you have a meeting with Spotify

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Speaker 2: or hopefully our systems are working so that you can

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Speaker 2: get a lot done and it doesn't have to be

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Speaker 2: about a human relationship.

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Speaker 1: But after I'm in discovery mode and it's working, I

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Speaker 1: just have to have faith that editorial and it's going

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Speaker 1: to work me. You know.

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Speaker 2: I think it's about having faith, but it's also about

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Speaker 2: look For most artists that are really trying to do

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Speaker 2: this and they're trying to get out on tour and

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Speaker 2: they're trying to have fans that maybe support them with

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Speaker 2: merch or become someone that's going to be a genuine supporter.

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Speaker 2: It's about taking people from being light listeners maybe I

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Speaker 2: hear you in radio, to being high intent listeners like

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Speaker 2: I'm searching for you and I'm playing you to a

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Speaker 2: real follower and supporter where I'm you know, buying things,

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Speaker 2: and so we try to kind of flow those tools together.

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Speaker 2: So let's say you have good success on discovery mode,

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Speaker 2: then you can go in and buy a native ads

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Speaker 2: campaign that says, I want to target people that have

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Speaker 2: only ever heard me on programming but have never put

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Speaker 2: me in their library. Can you put me in front

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Speaker 2: of them? And then we want to say all right

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Speaker 2: now you've got some high intent listeners, Let's put your

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Speaker 2: show and your concert listing in front of them. And

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Speaker 2: that's kind of the beautiful flow when it works really well,

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Speaker 2: is going from discovery mode low intent, native ads high intent,

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Speaker 2: and now you start having your concert listings or your

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Speaker 2: merch and you start, you know, not only getting very

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Speaker 2: material royalties, and I'm sure we'll talk about you know,

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Speaker 2: sizeable royalties that are getting paid out, but also other

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Speaker 2: revenue streams that you can drive by having those you know,

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Speaker 2: high intent fans on Spotify.

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Speaker 1: Okay, when you talk about AD, you're not talking about

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Speaker 1: the free tier. You're talking about information that would be

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Speaker 1: served up to subscribers. You're right, yes, and that information

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Speaker 1: might be tour dates, might be merch anything else.

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Speaker 2: So it could be content like here's a new release

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Speaker 2: from an artist that you might have heard in a

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Speaker 2: radio station. It could be like you said, concerts merch.

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Speaker 1: And where would the user see that?

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Speaker 2: Well, our main products are called Marquee, which is like

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Speaker 2: when you open the app, if there's a relevant new

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Speaker 2: release for you, you'll see a big screen when you

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Speaker 2: open the app announcing the new release, usually on release day,

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Speaker 2: and then we have a second format called Showcase, which

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Speaker 2: is essentially a home shelf. You know how we have

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Speaker 2: the shelves on home with different content recommendations. It's a

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Speaker 2: sponsored shelf where you can feature not only a new release,

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Speaker 2: but it could be a catalog, anniversary or kind of

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Speaker 2: anything that you want to promote.

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Speaker 1: Okay. Previous Spotify reports have said the most active listeners

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Speaker 1: pick and choose their music as opposed to listening to playlists.

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Speaker 1: Is that accurate?

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Speaker 2: Well, I mean, it's certainly true that almost every user

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Speaker 2: does both. So you know, users that are heavily engaged

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Speaker 2: often have their own playlists and they're curating stuff for themselves,

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Speaker 2: your favorite songs that you want to go back to

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Speaker 2: over and over. But the vast, vast majority of users

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Speaker 2: also have habits with our programming. Maybe they love hot

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Speaker 2: country or they love their daily mix too. The healthiest

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Speaker 2: users on Spotify have the most diverse habits. They listen

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00:24:47,600 --> 00:24:49,400
Speaker 2: to us on their phone and the card, they listen

436
00:24:49,400 --> 00:24:53,640
Speaker 2: to programming and you know, the DJ, and they do

437
00:24:53,920 --> 00:24:56,280
Speaker 2: a jam with their friends. Like, the more different parts

438
00:24:56,320 --> 00:24:58,520
Speaker 2: of Spotify you're using, the more you're going to retain,

439
00:24:58,600 --> 00:25:00,760
Speaker 2: the more you're gonna keep paying for your subscription.

440
00:25:02,280 --> 00:25:07,960
Speaker 1: Okay, what is happening musically on Spotify? After all, we

441
00:25:08,000 --> 00:25:10,960
Speaker 1: hear all this top line stuff. It's a hip hop world.

442
00:25:11,040 --> 00:25:11,720
Speaker 1: Rock is dying.

443
00:25:11,880 --> 00:25:15,880
Speaker 2: What is going on genre wise? You mean yes, well,

444
00:25:16,000 --> 00:25:19,480
Speaker 2: you know earlier I said more nichefication. I think that's

445
00:25:19,520 --> 00:25:23,600
Speaker 2: definitely true. But I think probably like the biggest trend

446
00:25:23,640 --> 00:25:27,480
Speaker 2: that I see is how global. Those trends have been

447
00:25:28,000 --> 00:25:33,800
Speaker 2: so regional Mexican music, K pop, afro pop, you know,

448
00:25:35,240 --> 00:25:39,840
Speaker 2: music has gotten so global across the world, and now

449
00:25:39,840 --> 00:25:44,080
Speaker 2: we're at a place where artists get the majority of

450
00:25:44,119 --> 00:25:48,440
Speaker 2: their royalties from outside their home country. A third of

451
00:25:48,520 --> 00:25:49,320
Speaker 2: artists get more than.

452
00:25:49,359 --> 00:25:51,760
Speaker 1: Who wha wha, wha wha A little bit slower. Yeah,

453
00:25:52,000 --> 00:25:55,960
Speaker 1: all artists around the world, both in small countries and

454
00:25:56,040 --> 00:25:59,760
Speaker 1: in large markets US, Germany and UK, get most of

455
00:25:59,800 --> 00:26:02,280
Speaker 1: their royalties outside their home country.

456
00:26:02,520 --> 00:26:07,720
Speaker 2: The average is that the majority of an artist's royalties

457
00:26:07,720 --> 00:26:09,120
Speaker 2: come from outside their home country.

458
00:26:10,000 --> 00:26:13,160
Speaker 1: Okay, I interrupted, you continue, Yeah.

459
00:26:12,960 --> 00:26:15,280
Speaker 2: So just to say I think that I think we've

460
00:26:15,320 --> 00:26:18,400
Speaker 2: gone from a global music market that was a lot

461
00:26:18,440 --> 00:26:21,480
Speaker 2: more western centric and it's you know, these kind of

462
00:26:21,520 --> 00:26:24,080
Speaker 2: radio stations on Terrestra radio that fit into a certain

463
00:26:24,080 --> 00:26:27,760
Speaker 2: format to a lot more niche genres, and a lot

464
00:26:27,800 --> 00:26:31,919
Speaker 2: of those genres are driven outside the West, but are

465
00:26:31,960 --> 00:26:33,480
Speaker 2: becoming really popular globally.

466
00:26:35,119 --> 00:26:38,160
Speaker 1: Okay, we have the Spotify Top fifty, that's the most

467
00:26:38,240 --> 00:26:42,840
Speaker 1: dominant chart in the world. It does not seem to

468
00:26:42,920 --> 00:26:47,440
Speaker 1: have niche ification if you look down the road. Are

469
00:26:47,480 --> 00:26:50,119
Speaker 1: these other niches going to grow or is that always

470
00:26:50,160 --> 00:26:52,520
Speaker 1: going to be separate from the pool at large?

471
00:26:52,760 --> 00:26:54,080
Speaker 2: I think so. I mean, when you look at the

472
00:26:54,080 --> 00:26:56,080
Speaker 2: top fifty on Spotify, you gotta remember that's a little

473
00:26:56,119 --> 00:26:58,800
Speaker 2: bit of a reflection of where our users are. But

474
00:26:58,920 --> 00:27:01,960
Speaker 2: as India has become a bigger and bigger area of

475
00:27:02,400 --> 00:27:05,240
Speaker 2: usage for Spotify, you see more and more music from

476
00:27:05,240 --> 00:27:07,800
Speaker 2: India charting, and I think we're just going to see

477
00:27:07,800 --> 00:27:12,359
Speaker 2: that as we've become more popular in Africa across Asia.

478
00:27:12,840 --> 00:27:14,720
Speaker 2: I certainly think you're going to see that on the

479
00:27:14,760 --> 00:27:15,720
Speaker 2: global chart.

480
00:27:16,800 --> 00:27:20,840
Speaker 1: Okay, let's regional. Are we going to see an Americana

481
00:27:20,960 --> 00:27:22,920
Speaker 1: act in the Spotify Top fifteen?

482
00:27:25,080 --> 00:27:28,600
Speaker 2: I mean, I think that because of the fact that

483
00:27:28,880 --> 00:27:31,880
Speaker 2: the way music is breaking is so different now. I mean,

484
00:27:32,400 --> 00:27:36,080
Speaker 2: you know, like I said, in the nineties, you kind

485
00:27:36,119 --> 00:27:38,560
Speaker 2: of had to fit into a certain set of radio formats.

486
00:27:38,600 --> 00:27:41,000
Speaker 2: There are no rules now, Like, you can be whatever

487
00:27:41,040 --> 00:27:42,640
Speaker 2: kind of music you want. You don't need to brand

488
00:27:42,680 --> 00:27:45,560
Speaker 2: yourself with a specific genre or whatever. And if you

489
00:27:45,680 --> 00:27:48,040
Speaker 2: have a fan base that's resonating with what you're doing

490
00:27:48,080 --> 00:27:50,399
Speaker 2: because of your personality or the way you relate to

491
00:27:50,440 --> 00:27:53,119
Speaker 2: them or whatever, you can grow. And so because of that,

492
00:27:53,160 --> 00:27:56,000
Speaker 2: I think it's possible for really any type of music

493
00:27:56,040 --> 00:27:59,280
Speaker 2: to break through. Like I yeah, I don't think there

494
00:27:59,280 --> 00:28:01,000
Speaker 2: are really any rules boundaries anymore.

495
00:28:02,240 --> 00:28:06,840
Speaker 1: Just going sideways for a second to what did we

496
00:28:07,320 --> 00:28:12,520
Speaker 1: to tracks start on social media primarily TikTok and crossover,

497
00:28:13,480 --> 00:28:18,000
Speaker 1: or start on Spotify, or start on TikTok and not crossover.

498
00:28:18,560 --> 00:28:21,719
Speaker 2: Yeah, look, I mean we certainly see all of the above.

499
00:28:22,840 --> 00:28:28,720
Speaker 2: I think typically, Well, let me divide into two types

500
00:28:28,760 --> 00:28:33,919
Speaker 2: of tracks, just to massively oversimplify, there's two types of tracks.

501
00:28:33,960 --> 00:28:37,760
Speaker 2: There's tracks that follow like a typical historical pattern, which

502
00:28:37,800 --> 00:28:40,960
Speaker 2: is your biggest week is your opening week. You come

503
00:28:41,000 --> 00:28:43,880
Speaker 2: out hot out of the gate, all the attention, and

504
00:28:43,880 --> 00:28:46,800
Speaker 2: then slowly over time you kind of plateau and fade out.

505
00:28:46,960 --> 00:28:50,920
Speaker 2: That's like one path that a track can have. A

506
00:28:50,960 --> 00:28:55,320
Speaker 2: second type of path that we see is what I

507
00:28:55,360 --> 00:28:58,000
Speaker 2: would think about as a momentum track, it gets released,

508
00:28:58,480 --> 00:29:00,560
Speaker 2: it's kind of sitting there and then all of a

509
00:29:00,600 --> 00:29:02,800
Speaker 2: sudden it gets picked up by something. It's in a

510
00:29:02,920 --> 00:29:07,760
Speaker 2: Netflix show, it's in a TikTok trend whatever, and now

511
00:29:07,760 --> 00:29:09,800
Speaker 2: it starts surging out of nowhere and it has this

512
00:29:09,880 --> 00:29:12,920
Speaker 2: kind of big hill out of nowhere. So I think

513
00:29:12,960 --> 00:29:15,720
Speaker 2: in terms of tracks that really spike on Spotify, it

514
00:29:15,800 --> 00:29:18,400
Speaker 2: might be fifty to fifty ish in terms of the

515
00:29:18,440 --> 00:29:22,120
Speaker 2: first pattern versus the second pattern. Typically for the first

516
00:29:22,160 --> 00:29:24,760
Speaker 2: pattern tracks they really break first on Spotify, you see

517
00:29:24,760 --> 00:29:27,120
Speaker 2: them spike out of the gate. They're getting you know,

518
00:29:27,560 --> 00:29:30,000
Speaker 2: presence on playlists, and then they start getting picked up

519
00:29:30,040 --> 00:29:33,880
Speaker 2: elsewhere in the world. For the second time of track,

520
00:29:34,240 --> 00:29:36,560
Speaker 2: usually streaming is a little bit behind, maybe you know,

521
00:29:36,600 --> 00:29:38,440
Speaker 2: a couple of days or a week after it's trending

522
00:29:38,480 --> 00:29:40,840
Speaker 2: on social it starts, you know, we see the signals

523
00:29:40,840 --> 00:29:42,640
Speaker 2: in the search algorithm and stuff, and it starts getting

524
00:29:42,640 --> 00:29:46,240
Speaker 2: picked up by Spotify. But to your point about not sticking,

525
00:29:47,200 --> 00:29:49,640
Speaker 2: you know, a lot of the stuff that is a

526
00:29:49,680 --> 00:29:53,320
Speaker 2: trending sound to the background of a social media video

527
00:29:53,720 --> 00:29:55,479
Speaker 2: isn't the stuff that people want to have in their playlist,

528
00:29:55,560 --> 00:29:59,200
Speaker 2: and it doesn't actually you know, linger or really catch

529
00:29:59,240 --> 00:30:02,400
Speaker 2: on were genuine music streaming. It's just, you know, a

530
00:30:02,440 --> 00:30:04,120
Speaker 2: trend in a different sense.

531
00:30:11,800 --> 00:30:18,280
Speaker 1: Okay. As you said, today, Spotify released its annual economics report. Well,

532
00:30:18,280 --> 00:30:21,040
Speaker 1: those who haven't read it, can you give us some

533
00:30:21,160 --> 00:30:22,840
Speaker 1: highlights for sure?

534
00:30:22,880 --> 00:30:26,040
Speaker 2: I mean, to me, I would boil it down to

535
00:30:26,080 --> 00:30:31,640
Speaker 2: two big things. First, the total pie continues to grow

536
00:30:31,680 --> 00:30:36,880
Speaker 2: and grow and grow, which is great. I started in

537
00:30:36,880 --> 00:30:40,520
Speaker 2: the music industry two thousand and eight to twenty fourteen,

538
00:30:40,560 --> 00:30:43,680
Speaker 2: and every year it was how much are we going down?

539
00:30:43,960 --> 00:30:45,720
Speaker 2: So I don't take it for granted that every year,

540
00:30:45,760 --> 00:30:49,000
Speaker 2: you know, the industry grows. It's fantastic that total payouts

541
00:30:50,120 --> 00:30:52,200
Speaker 2: in total revenues to the industry are going up and

542
00:30:52,280 --> 00:30:56,600
Speaker 2: up and up every year. It's clear that streaming has

543
00:30:56,600 --> 00:30:58,480
Speaker 2: gotten people to pay for music more and more and

544
00:30:58,520 --> 00:31:00,920
Speaker 2: more people are coming out to the idea that paying

545
00:31:00,920 --> 00:31:04,080
Speaker 2: for music every month is a great service, which is awesome.

546
00:31:04,160 --> 00:31:07,239
Speaker 2: So ten billion with a B in total payouts from

547
00:31:07,280 --> 00:31:12,640
Speaker 2: Spotify in twenty twenty four ten x growth from where

548
00:31:12,640 --> 00:31:14,680
Speaker 2: we were in twenty fourteen. We paid out one billion

549
00:31:14,680 --> 00:31:17,880
Speaker 2: in twenty fourteen. Ten billion in twenty twenty four the

550
00:31:17,920 --> 00:31:21,880
Speaker 2: most that any retailer has ever paid to the music industry,

551
00:31:22,120 --> 00:31:24,880
Speaker 2: So that's awesome. The total pie is growing. Second big

552
00:31:24,880 --> 00:31:31,040
Speaker 2: thing that stands out is it's getting divided and shared

553
00:31:31,080 --> 00:31:33,680
Speaker 2: in by more and more types of artist success stories.

554
00:31:34,040 --> 00:31:38,040
Speaker 2: So the number of artists that are getting ten thousand

555
00:31:38,040 --> 00:31:40,800
Speaker 2: dollars in payouts per year, one hundred thousand dollars in

556
00:31:40,800 --> 00:31:43,600
Speaker 2: payouts per year, five million dollars in payouts per year,

557
00:31:43,720 --> 00:31:47,000
Speaker 2: all those have tripled in the last seven years. So

558
00:31:47,360 --> 00:31:51,200
Speaker 2: the number of artists seeing you know, meaningful amounts of

559
00:31:51,400 --> 00:31:55,240
Speaker 2: royalty payouts is growing faster than the total pie is growing,

560
00:31:55,240 --> 00:31:57,200
Speaker 2: which just means that we're finding more and more ways

561
00:31:57,240 --> 00:32:03,479
Speaker 2: to program different types of artists to audiences and that's working.

562
00:32:03,680 --> 00:32:06,480
Speaker 2: Fifty percent of payouts going to indies. That was never possible,

563
00:32:06,560 --> 00:32:08,920
Speaker 2: you know, in the previous way that the industry works.

564
00:32:08,920 --> 00:32:11,080
Speaker 2: So those are the two big things that stand out

565
00:32:11,120 --> 00:32:14,080
Speaker 2: to me, total pie growth and then how it's getting

566
00:32:14,120 --> 00:32:16,000
Speaker 2: shared by more and more types of artists.

567
00:32:17,520 --> 00:32:21,960
Speaker 1: Can you give us, you know, this may be two minute,

568
00:32:22,480 --> 00:32:24,960
Speaker 1: Can you give us a couple of stories of people

569
00:32:24,960 --> 00:32:27,600
Speaker 1: were making a lot of money that I mean obviously

570
00:32:27,720 --> 00:32:30,280
Speaker 1: Lady Gaga, Brude marsh and making a lot of money,

571
00:32:30,760 --> 00:32:34,440
Speaker 1: but something domestic. We're speaking in English where people will

572
00:32:34,520 --> 00:32:36,920
Speaker 1: be surprised how much money these people are making.

573
00:32:38,280 --> 00:32:39,920
Speaker 2: Yeah, it's a good question. I don't know, you know,

574
00:32:39,920 --> 00:32:43,920
Speaker 2: if I should owe any one artists specific payouts. But

575
00:32:44,040 --> 00:32:48,560
Speaker 2: you know, actually I was just talking to there's a

576
00:32:48,600 --> 00:32:51,480
Speaker 2: guy on our team who's employed by Spotify, but he

577
00:32:51,880 --> 00:32:54,520
Speaker 2: does music with his band still as a side gig,

578
00:32:54,680 --> 00:32:56,360
Speaker 2: and so we were looking at his stuff because I'm

579
00:32:56,360 --> 00:32:57,800
Speaker 2: allowed to talk about him because he works here. I

580
00:32:57,840 --> 00:33:03,160
Speaker 2: don't need to ask his permission. So they're bandy, you know,

581
00:33:03,160 --> 00:33:05,280
Speaker 2: they all have jobs, but they put out music on

582
00:33:05,320 --> 00:33:09,840
Speaker 2: the side still. They have maybe around one hundred thousand

583
00:33:09,840 --> 00:33:14,800
Speaker 2: monthly listeners, a few million streams. They're generating about fifteen

584
00:33:15,040 --> 00:33:21,080
Speaker 2: thousand dollars a year in payouts from Spotify, and so

585
00:33:21,640 --> 00:33:25,200
Speaker 2: you know that's probably they're yeah, probably some something like

586
00:33:25,240 --> 00:33:29,720
Speaker 2: the eighty thousand, you know, highest earning artists, and Spotify

587
00:33:29,720 --> 00:33:32,800
Speaker 2: by no means is this like you know, their day job.

588
00:33:32,840 --> 00:33:34,480
Speaker 2: But it just like gives you an example of the

589
00:33:34,600 --> 00:33:38,440
Speaker 2: types of that type of success story wasn't really even

590
00:33:38,440 --> 00:33:40,520
Speaker 2: a thing twenty years ago. So I thought that was cool,

591
00:33:40,600 --> 00:33:42,200
Speaker 2: just as an example of what's possible.

592
00:33:43,640 --> 00:33:48,560
Speaker 1: Okay, since your tenure at Spotify, there's been a change

593
00:33:49,120 --> 00:33:53,240
Speaker 1: where you have to reach a certain threshold to get

594
00:33:53,360 --> 00:33:59,680
Speaker 1: royalties at all. Yeah, what percentage of tracks reach that threshold?

595
00:33:59,800 --> 00:34:05,680
Speaker 2: So ninety nine point five percent of tracks by stream

596
00:34:05,680 --> 00:34:12,160
Speaker 2: share monetize. But the reason that we established that threshold is,

597
00:34:13,239 --> 00:34:15,919
Speaker 2: you know, if I back up for a second, most

598
00:34:15,920 --> 00:34:18,160
Speaker 2: of what we try to do every day grow the

599
00:34:18,200 --> 00:34:20,760
Speaker 2: pie because it grows our revenues and it grows payouts

600
00:34:20,760 --> 00:34:25,879
Speaker 2: to the industry. Right, very very infrequently, you can find

601
00:34:25,880 --> 00:34:28,399
Speaker 2: a way to shift the payout that you're already doing

602
00:34:28,440 --> 00:34:30,440
Speaker 2: around to get people paid more. But that's what we

603
00:34:30,520 --> 00:34:33,640
Speaker 2: found with this. For tracks that were generating less than

604
00:34:33,680 --> 00:34:35,640
Speaker 2: a thousand streams in the last year, on average, they

605
00:34:35,680 --> 00:34:40,680
Speaker 2: were generating three cents in payouts. So that means if

606
00:34:40,680 --> 00:34:43,200
Speaker 2: you went into your aggregator account and said I want

607
00:34:43,200 --> 00:34:46,239
Speaker 2: to withdraw my three cents, you couldn't even do it

608
00:34:46,239 --> 00:34:49,120
Speaker 2: because it's below the threshold of the fee to withdraw

609
00:34:49,160 --> 00:34:53,600
Speaker 2: your money. Right and so literally, if you add up

610
00:34:53,640 --> 00:34:57,440
Speaker 2: all those pennies of millions of uploaders generating a few pennies,

611
00:34:58,440 --> 00:35:02,479
Speaker 2: we were allowed fifty one hundred million dollars to sit

612
00:35:03,719 --> 00:35:06,799
Speaker 2: just between couch cushions getting wasted, and that seemed like

613
00:35:06,800 --> 00:35:09,640
Speaker 2: a real missed opportunity. We had gotten so big that

614
00:35:09,640 --> 00:35:11,799
Speaker 2: that amount of waste in the system seemed like a

615
00:35:11,920 --> 00:35:16,520
Speaker 2: miss So we established a threshold to say, you know,

616
00:35:16,600 --> 00:35:19,520
Speaker 2: until a track has one thousand streams the last twelve months,

617
00:35:19,600 --> 00:35:23,960
Speaker 2: it doesn't generate royalties. That allows all the tracks that

618
00:35:24,160 --> 00:35:28,440
Speaker 2: are generating royalties to get half a percent more payout,

619
00:35:28,480 --> 00:35:30,960
Speaker 2: so it increases all of their payouts. Spotify makes no

620
00:35:31,680 --> 00:35:34,920
Speaker 2: additional money by this policy. It just shifts the revenue

621
00:35:34,960 --> 00:35:39,959
Speaker 2: to people that can actually withdraw their money. And because

622
00:35:40,000 --> 00:35:41,680
Speaker 2: of that, we eliminated waste in the system and we're

623
00:35:41,680 --> 00:35:44,040
Speaker 2: able to get everyone who's doing this a little bit

624
00:35:44,040 --> 00:35:45,760
Speaker 2: more seriously paid a little bit more money.

625
00:35:47,280 --> 00:35:52,319
Speaker 1: Okay. Spotify is the largest player in streaming market, just

626
00:35:52,360 --> 00:35:57,480
Speaker 1: like anybody who's the largest player, there's blowback. In addition,

627
00:35:57,640 --> 00:36:01,040
Speaker 1: streaming is a different paradigm than it will in the

628
00:36:01,080 --> 00:36:06,760
Speaker 1: pre Internet era. Is this just something that the public

629
00:36:06,840 --> 00:36:11,000
Speaker 1: doesn't understand it needs to adjust to or what would

630
00:36:11,000 --> 00:36:12,160
Speaker 1: your response.

631
00:36:11,760 --> 00:36:16,400
Speaker 2: Be, Yeah, I mean it depends on the type of

632
00:36:16,400 --> 00:36:19,960
Speaker 2: blowback you're talking about. I see it all, but you know,

633
00:36:20,040 --> 00:36:24,000
Speaker 2: the one type that I see is it was better

634
00:36:24,040 --> 00:36:27,200
Speaker 2: in the good old days. You know, everyone was making

635
00:36:27,239 --> 00:36:29,719
Speaker 2: more money in the good old days. And I don't

636
00:36:29,800 --> 00:36:34,279
Speaker 2: understand that. I haven't seen any data that at any

637
00:36:34,400 --> 00:36:38,239
Speaker 2: point in music history we're artists making more money than

638
00:36:38,280 --> 00:36:41,480
Speaker 2: they are now. I was looking at in loud and

639
00:36:41,520 --> 00:36:47,080
Speaker 2: clear this year, if you were the one hundred thousandth

640
00:36:47,760 --> 00:36:52,560
Speaker 2: most popular artists on Spotify last year, he generated six

641
00:36:52,600 --> 00:36:56,560
Speaker 2: thousand dollars from Spotify, And usually, you know, Spotify is

642
00:36:56,600 --> 00:36:58,880
Speaker 2: about a quarter of what you make from recorded revenue,

643
00:36:58,920 --> 00:37:01,480
Speaker 2: so maybe you're making twenty twenty five thousand in total

644
00:37:01,520 --> 00:37:04,719
Speaker 2: if you were one hundred thousandth most popular artists on

645
00:37:04,760 --> 00:37:08,000
Speaker 2: Spotify in twenty twenty four. In two thousand and four,

646
00:37:08,280 --> 00:37:11,640
Speaker 2: one hundred thousandth most popular artist was making six hundred

647
00:37:11,680 --> 00:37:14,640
Speaker 2: dollars from Spotify. So it's ten x and in two

648
00:37:14,719 --> 00:37:17,680
Speaker 2: thousand four, if I go back ten years, additionally, there

649
00:37:17,760 --> 00:37:18,279
Speaker 2: was no Just.

650
00:37:18,200 --> 00:37:20,200
Speaker 1: To be clear, because I think you missbooked, you're about

651
00:37:20,200 --> 00:37:21,040
Speaker 1: twenty fourteen.

652
00:37:21,800 --> 00:37:24,879
Speaker 2: Sorry, Yeah, So twenty twenty four it was generating six

653
00:37:24,880 --> 00:37:28,680
Speaker 2: thousand dollars. Twenty fourteen it was generating six hundred dollars.

654
00:37:28,840 --> 00:37:30,399
Speaker 2: And if I go back to two thousand and four.

655
00:37:30,520 --> 00:37:33,200
Speaker 2: Ten years earlier, there was no such thing as the

656
00:37:33,200 --> 00:37:36,520
Speaker 2: one hundred thousandth most popular commercial artists. The record stores

657
00:37:36,520 --> 00:37:39,600
Speaker 2: did not have one hundred thousand different artists in it,

658
00:37:39,640 --> 00:37:42,839
Speaker 2: so that didn't exist. They cut their demo, they didn't

659
00:37:42,840 --> 00:37:45,080
Speaker 2: get signed, no thank you, you're out of the game.

660
00:37:45,120 --> 00:37:48,120
Speaker 2: They weren't even allowed to play. So we've gone from

661
00:37:48,800 --> 00:37:51,800
Speaker 2: you can't be in the game to you can generate

662
00:37:51,800 --> 00:37:55,560
Speaker 2: a couple hundred dollars to you know, twenty twenty five

663
00:37:55,560 --> 00:37:58,680
Speaker 2: thousand dollars a year from recorded revenue. Not that it's like, okay,

664
00:37:58,760 --> 00:38:01,239
Speaker 2: quit everything, this is your but that's the kind of

665
00:38:01,320 --> 00:38:03,719
Speaker 2: progress that makes it hard for me to understand how

666
00:38:03,719 --> 00:38:05,759
Speaker 2: you could look at this and say anything other than

667
00:38:07,080 --> 00:38:09,759
Speaker 2: the industry is so much healthier now than it's been

668
00:38:09,840 --> 00:38:13,560
Speaker 2: at any point in its history. Maybe, you know, if

669
00:38:13,600 --> 00:38:17,279
Speaker 2: you're a top ten, top twenty act and less of

670
00:38:17,320 --> 00:38:19,680
Speaker 2: the streams, less of the attention goes to you, maybe

671
00:38:19,680 --> 00:38:24,120
Speaker 2: it's it's, you know, a weaker phase of music industry

672
00:38:24,680 --> 00:38:28,000
Speaker 2: at that tip of the iceberg. But in terms of

673
00:38:28,040 --> 00:38:31,400
Speaker 2: the total revenue getting paid to artists, in terms of

674
00:38:31,440 --> 00:38:34,719
Speaker 2: the number of artists achieving meaningful amounts of royalties or

675
00:38:34,760 --> 00:38:39,000
Speaker 2: meaningful amounts of success. There's just no denying the fact

676
00:38:39,080 --> 00:38:42,359
Speaker 2: that there's more you know, success now than there's ever been.

677
00:38:42,400 --> 00:38:44,640
Speaker 2: So to me, this is the good old days of

678
00:38:45,080 --> 00:38:48,880
Speaker 2: the music industry. And that's probably the criticism that confuses

679
00:38:48,920 --> 00:38:52,640
Speaker 2: me the most of you know, streaming doesn't pay and

680
00:38:52,680 --> 00:38:54,440
Speaker 2: we are so much better off in the CD era.

681
00:38:54,520 --> 00:38:56,520
Speaker 2: I've just never seen a number or a fact to

682
00:38:56,600 --> 00:39:00,080
Speaker 2: support that way of looking at it.

683
00:39:00,360 --> 00:39:07,360
Speaker 1: Okay, how about all the people who say my track

684
00:39:07,520 --> 00:39:11,439
Speaker 1: was streamed a million dollar a million times, but I'm

685
00:39:11,480 --> 00:39:12,280
Speaker 1: getting buck.

686
00:39:12,080 --> 00:39:17,439
Speaker 2: Gis, Yeah, totally, you know. One of the tough things

687
00:39:17,480 --> 00:39:22,040
Speaker 2: that's it's hard to wrap your head around this. One

688
00:39:22,120 --> 00:39:26,480
Speaker 2: point four million tracks on Spotify have gotten a million

689
00:39:26,480 --> 00:39:30,839
Speaker 2: streams for more. It's just there's a lot of streams, right,

690
00:39:30,920 --> 00:39:34,840
Speaker 2: So if if your track gets a million streams, it

691
00:39:34,840 --> 00:39:38,640
Speaker 2: means you're in the top one point four million tracks

692
00:39:39,400 --> 00:39:45,080
Speaker 2: last year. But just a million streams doesn't mean what

693
00:39:45,120 --> 00:39:49,600
Speaker 2: it used to in terms of total popularity. So I

694
00:39:49,840 --> 00:39:55,520
Speaker 2: think a lot of times when people are frustrated about payouts,

695
00:39:55,520 --> 00:39:57,640
Speaker 2: and it's from maybe an artist that you haven't heard

696
00:39:57,719 --> 00:40:00,440
Speaker 2: of before, or they haven't kind of built their brand.

697
00:40:00,960 --> 00:40:02,879
Speaker 2: A lot of it is just the laws of popularity.

698
00:40:02,920 --> 00:40:06,080
Speaker 2: Like you and I could record a song today and

699
00:40:06,080 --> 00:40:08,640
Speaker 2: we could put it up on Spotify. There's twelve million

700
00:40:08,640 --> 00:40:11,879
Speaker 2: people who have uploaded. Are we gonna have a hit?

701
00:40:12,360 --> 00:40:12,640
Speaker 1: You know?

702
00:40:12,719 --> 00:40:16,000
Speaker 2: It's the odds are stacked against us. So it just

703
00:40:16,600 --> 00:40:21,000
Speaker 2: requires that much more popularity to break through today because

704
00:40:21,000 --> 00:40:23,880
Speaker 2: there's hundreds of millions of people streaming, and there's trillions

705
00:40:23,920 --> 00:40:26,680
Speaker 2: of streams every year, and so what might have seemed

706
00:40:26,719 --> 00:40:29,479
Speaker 2: like a big number in a downloads era just really

707
00:40:29,520 --> 00:40:31,520
Speaker 2: isn't the same in the streaming era.

708
00:40:33,600 --> 00:40:37,640
Speaker 1: However, there are people, especially in the UK, keep saying, oh,

709
00:40:37,680 --> 00:40:40,160
Speaker 1: you're putting out an artist out of business, they can't

710
00:40:40,160 --> 00:40:40,800
Speaker 1: make a living.

711
00:40:43,920 --> 00:40:46,040
Speaker 2: I just don't know if it's supported by facts, like

712
00:40:46,080 --> 00:40:51,720
Speaker 2: I hear the anecdotes that you're talking about. But every

713
00:40:52,000 --> 00:40:54,520
Speaker 2: single piece of data that I see is that there's

714
00:40:54,880 --> 00:40:57,880
Speaker 2: more revenue being paid to artists that support more people

715
00:40:57,920 --> 00:41:01,439
Speaker 2: being able to afford living through music than there were

716
00:41:01,840 --> 00:41:04,799
Speaker 2: ten years ago or twenty years ago. I mean ten

717
00:41:04,880 --> 00:41:09,320
Speaker 2: years ago the total industry had gotten to a bottom

718
00:41:09,360 --> 00:41:12,520
Speaker 2: of thirteen fourteen billion, and now we're going to be

719
00:41:12,560 --> 00:41:18,240
Speaker 2: over in the thirties. In total revenues for recorded music,

720
00:41:18,640 --> 00:41:20,919
Speaker 2: So there's no doubt that more is being paid out.

721
00:41:22,040 --> 00:41:24,640
Speaker 2: We are one hundred percent transparent with how we pay

722
00:41:24,640 --> 00:41:27,440
Speaker 2: out and to who. No one's been more transparent than us,

723
00:41:27,719 --> 00:41:31,200
Speaker 2: And so there are occasions I'm sure where money is

724
00:41:31,239 --> 00:41:33,279
Speaker 2: getting lost in the pipes or it's not reaching the

725
00:41:33,320 --> 00:41:35,239
Speaker 2: right hands. I don't want to diminish any of that,

726
00:41:36,120 --> 00:41:41,040
Speaker 2: but overall, I think it to me, there's no denying

727
00:41:41,040 --> 00:41:43,839
Speaker 2: the data that the industry is more healthy and more

728
00:41:43,840 --> 00:41:45,879
Speaker 2: people are making a living for music than there were

729
00:41:45,880 --> 00:41:46,919
Speaker 2: at any previous era.

730
00:41:48,520 --> 00:41:54,040
Speaker 1: Okay, today, how many tracts are being uploaded a day

731
00:41:54,120 --> 00:41:55,360
Speaker 1: or a week or a month.

732
00:41:57,080 --> 00:42:00,000
Speaker 2: Yeah, I know it's in the tens of thousands, maybe

733
00:42:00,040 --> 00:42:01,319
Speaker 2: towards one hundred thousand a day.

734
00:42:01,320 --> 00:42:08,839
Speaker 1: I think now, Okay, you said something earlier that Spotify

735
00:42:09,200 --> 00:42:16,080
Speaker 1: represents twenty five percent, one quarter of overall recorded music revenues.

736
00:42:17,000 --> 00:42:18,600
Speaker 1: Where's the other three quarters?

737
00:42:19,360 --> 00:42:22,719
Speaker 2: Well, I think in terms of let's see, I think

738
00:42:22,719 --> 00:42:26,680
Speaker 2: in terms of streaming revenue, that's about that's become about

739
00:42:26,719 --> 00:42:30,320
Speaker 2: eighty percent of the business now and we're about thirty

740
00:42:30,320 --> 00:42:34,920
Speaker 2: five forty percent of that. And then outside of streaming,

741
00:42:35,000 --> 00:42:39,080
Speaker 2: you know, you've got vinyl and CD and inside streaming

742
00:42:39,160 --> 00:42:42,839
Speaker 2: you have essentially Spotify's competitors.

743
00:42:43,600 --> 00:42:49,560
Speaker 1: Okay, you know the big competitors domestically are Apple and Amazon.

744
00:42:50,280 --> 00:42:54,560
Speaker 1: Are we considering streaming people who are listening for free

745
00:42:54,640 --> 00:42:57,360
Speaker 1: on YouTube also which pays? But I just want to

746
00:42:57,400 --> 00:42:58,520
Speaker 1: know in the overall pie.

747
00:42:58,920 --> 00:43:02,600
Speaker 2: Yeah, when we look at total recorded revenues for the industry,

748
00:43:03,239 --> 00:43:06,920
Speaker 2: paid streaming is the biggest driver. Free streaming AD supported

749
00:43:06,960 --> 00:43:11,200
Speaker 2: streaming from Spotify and YouTube is the second biggest, and

750
00:43:11,239 --> 00:43:15,120
Speaker 2: then you know everything after that is pretty small, digital downloads,

751
00:43:15,120 --> 00:43:15,479
Speaker 2: et cetera.

752
00:43:16,520 --> 00:43:20,000
Speaker 1: To what degree do you personally pay or the company

753
00:43:20,080 --> 00:43:23,480
Speaker 1: also pay attention to your competitors. Let me start on

754
00:43:23,520 --> 00:43:26,400
Speaker 1: a gross level. Yeah, if you ever say, wait a second,

755
00:43:26,440 --> 00:43:28,760
Speaker 1: something else has happened in there, we have to follow

756
00:43:28,800 --> 00:43:29,719
Speaker 1: that trend.

757
00:43:29,960 --> 00:43:32,239
Speaker 2: I think for the most part, you know, we've been

758
00:43:32,280 --> 00:43:37,160
Speaker 2: more of a leader for the fact that this is

759
00:43:37,239 --> 00:43:39,279
Speaker 2: really all we focus on, you know, like this is

760
00:43:39,320 --> 00:43:42,520
Speaker 2: our whole business. If streaming music doesn't work for us,

761
00:43:42,560 --> 00:43:44,680
Speaker 2: we don't work, like we have to make this work.

762
00:43:44,800 --> 00:43:47,399
Speaker 2: So we focus a lot on how can we make

763
00:43:47,440 --> 00:43:50,600
Speaker 2: the most valuable service that we possibly can so that

764
00:43:50,640 --> 00:43:53,640
Speaker 2: more people pay for a music subscription so that we

765
00:43:53,640 --> 00:43:56,080
Speaker 2: grow revenues and we grow payouts. We have to be

766
00:43:56,120 --> 00:43:58,359
Speaker 2: obsessed with that. We don't have any other We don't

767
00:43:58,400 --> 00:44:01,200
Speaker 2: have a cloud business or a you know, of books

768
00:44:01,239 --> 00:44:05,120
Speaker 2: business or a hardware business to subsidize this thing. It

769
00:44:05,120 --> 00:44:06,760
Speaker 2: has to work on its own. So I think because

770
00:44:06,760 --> 00:44:09,000
Speaker 2: of that, we've been really focused. We've invested a ton

771
00:44:09,719 --> 00:44:12,359
Speaker 2: in innovation of the product and R and D, you know,

772
00:44:12,480 --> 00:44:15,080
Speaker 2: to be in front and have what I'm biased, but

773
00:44:15,160 --> 00:44:17,440
Speaker 2: I think clearly the best consumer experience.

774
00:44:19,400 --> 00:44:24,640
Speaker 1: It's a collegial small business. Do the other big companies

775
00:44:24,719 --> 00:44:28,640
Speaker 1: have someone like you? Do you know them? To what

776
00:44:28,800 --> 00:44:32,640
Speaker 1: degree is their infrastructure akin to yours?

777
00:44:33,600 --> 00:44:36,239
Speaker 2: Yeah, it is a small ecosystem, and I think that,

778
00:44:36,320 --> 00:44:41,000
Speaker 2: like you know, as much as we are competitors, I

779
00:44:41,040 --> 00:44:45,880
Speaker 2: genuinely mean this. There's what It's somewhere between five hundred

780
00:44:45,880 --> 00:44:50,080
Speaker 2: and six hundred million people paying for music music subscription

781
00:44:50,160 --> 00:44:53,920
Speaker 2: around the world. Now there's seven eight billion people in

782
00:44:53,920 --> 00:44:58,720
Speaker 2: the world. The big picture here is music is part

783
00:44:58,760 --> 00:45:02,160
Speaker 2: of every single human being's life. There is still a

784
00:45:02,200 --> 00:45:05,640
Speaker 2: ton of growth to get all of the world paying

785
00:45:05,680 --> 00:45:11,880
Speaker 2: for streaming music, and so if other companies are finding

786
00:45:11,920 --> 00:45:15,640
Speaker 2: ways to do that, I genuinely believe it's a good

787
00:45:15,640 --> 00:45:19,480
Speaker 2: thing because that brings them into this market, and I

788
00:45:19,520 --> 00:45:22,279
Speaker 2: think Spotify is the best product and so ultimately it's

789
00:45:22,320 --> 00:45:26,680
Speaker 2: going to win that market. But that's like the big

790
00:45:26,920 --> 00:45:31,839
Speaker 2: picture journey that we're on. I remember when I joined

791
00:45:31,880 --> 00:45:35,920
Speaker 2: Spotify in twenty eleven, and you know, there's like industry

792
00:45:35,960 --> 00:45:39,120
Speaker 2: analysis reports and they were like, the total addressable market

793
00:45:39,200 --> 00:45:42,520
Speaker 2: for a paying music subscription, we think is between three

794
00:45:42,560 --> 00:45:44,880
Speaker 2: to five million or you know, and Spotify was at

795
00:45:44,920 --> 00:45:49,319
Speaker 2: nine hundred thousand subscribers. The big picture why the pie

796
00:45:49,400 --> 00:45:51,840
Speaker 2: is growing, why there's more revenue in the industry, is

797
00:45:51,880 --> 00:45:56,480
Speaker 2: we got hundreds of millions of people to pay for music.

798
00:45:56,600 --> 00:45:59,959
Speaker 2: So I'm cheerleading everybody that's trying to make that happen.

799
00:46:00,080 --> 00:46:05,240
Speaker 2: And because of that, you know, I try to take inspiration.

800
00:46:05,320 --> 00:46:07,920
Speaker 2: There's a lot of Spotify alumni who've gone to YouTube,

801
00:46:07,920 --> 00:46:10,400
Speaker 2: We've gone to Apple, We've gone to Amazon and built

802
00:46:10,440 --> 00:46:13,160
Speaker 2: out similar things there, you know, Amazon Music for artists

803
00:46:13,280 --> 00:46:16,480
Speaker 2: or similar tools that what we're doing, and I think

804
00:46:16,480 --> 00:46:17,480
Speaker 2: that is a great thing.

805
00:46:25,120 --> 00:46:30,320
Speaker 1: What do you say to people who say Spotify pays

806
00:46:30,400 --> 00:46:31,600
Speaker 1: less per stream.

807
00:46:33,040 --> 00:46:38,879
Speaker 2: Well, it's a it's a totally bogus ridiculous concept. There

808
00:46:38,920 --> 00:46:41,160
Speaker 2: is no such thing as a There is no such

809
00:46:41,160 --> 00:46:45,080
Speaker 2: thing as a per play rate, and this is probably

810
00:46:45,120 --> 00:46:50,520
Speaker 2: the most misunderstood concept in the music industry. The thing

811
00:46:50,560 --> 00:46:53,080
Speaker 2: that probably bothers me the most is when people in

812
00:46:53,120 --> 00:46:56,960
Speaker 2: the music industry who fully know that it's bullshit and

813
00:46:57,040 --> 00:46:59,000
Speaker 2: still talk about it as if it's a real thing

814
00:46:59,000 --> 00:47:01,120
Speaker 2: because it serves their narraor. But there is no such

815
00:47:01,160 --> 00:47:05,279
Speaker 2: thing as a per play rate. The reason that there's

816
00:47:05,280 --> 00:47:07,080
Speaker 2: no such thing as a per play rate is because

817
00:47:07,160 --> 00:47:10,759
Speaker 2: no consumer pays per play that they do, you know,

818
00:47:10,840 --> 00:47:16,400
Speaker 2: they pay per month. So every music subscription pays the

819
00:47:16,400 --> 00:47:19,279
Speaker 2: same way. We all charge the same retail price, and

820
00:47:19,320 --> 00:47:21,600
Speaker 2: we all take our music revenues and pay two thirds

821
00:47:21,600 --> 00:47:25,320
Speaker 2: of it to labels and publishers. Every music streaming service

822
00:47:25,360 --> 00:47:29,319
Speaker 2: does that exactly the same way. So then if we're

823
00:47:29,320 --> 00:47:31,440
Speaker 2: all paying, if we're all doing the same retail price,

824
00:47:31,640 --> 00:47:34,240
Speaker 2: and we're all paying out two thirds of that retail revenue,

825
00:47:34,600 --> 00:47:40,480
Speaker 2: why is the revenue per play higher in some streaming

826
00:47:40,560 --> 00:47:45,719
Speaker 2: services than others. The reason is that on other streaming services,

827
00:47:46,120 --> 00:47:51,080
Speaker 2: people play a lot fewer streams. So if you only

828
00:47:51,239 --> 00:47:54,080
Speaker 2: use your service to play one track in a month,

829
00:47:54,680 --> 00:47:57,120
Speaker 2: you got a per play rate of ten dollars. Congratulations,

830
00:47:57,120 --> 00:48:00,880
Speaker 2: that looks amazing. If you use the service a lot

831
00:48:01,080 --> 00:48:03,480
Speaker 2: and you're streaming thousands or tens of thousands of times

832
00:48:03,520 --> 00:48:07,760
Speaker 2: a month, the effective quote unquote per play rate goes down.

833
00:48:08,080 --> 00:48:12,000
Speaker 2: The only problem is if you look at what is

834
00:48:12,040 --> 00:48:17,360
Speaker 2: the biggest predictor of churn of stopping paying for music,

835
00:48:17,920 --> 00:48:22,480
Speaker 2: the biggest predictor of churn is low usage of the service.

836
00:48:22,560 --> 00:48:25,560
Speaker 2: So if you play five times a month or ten

837
00:48:25,600 --> 00:48:28,360
Speaker 2: times a month, it makes your per play rate look amazing,

838
00:48:29,360 --> 00:48:31,439
Speaker 2: and then next month you're probably canceling your description because

839
00:48:31,480 --> 00:48:34,000
Speaker 2: you get no value from the thing. So all of

840
00:48:34,040 --> 00:48:36,080
Speaker 2: the you know, anyone in the industry you're saying, we

841
00:48:36,120 --> 00:48:38,399
Speaker 2: got to get the per play rates up. It's it's

842
00:48:38,480 --> 00:48:40,640
Speaker 2: literally backwards for what we need to be trying to

843
00:48:40,680 --> 00:48:42,600
Speaker 2: do as an industry. We need to be trying to

844
00:48:42,640 --> 00:48:46,719
Speaker 2: get people to engage more in their service so that

845
00:48:46,760 --> 00:48:50,359
Speaker 2: they're willing to pay more when we raise prices, that

846
00:48:50,400 --> 00:48:54,080
Speaker 2: they retain better. And so you know, if a service

847
00:48:54,120 --> 00:48:56,279
Speaker 2: has a lot of dormant accounts, you know, you sign

848
00:48:56,320 --> 00:48:59,319
Speaker 2: up with your phone carrier, but you never actually use

849
00:48:59,320 --> 00:49:02,719
Speaker 2: it, it makes your per play ray look amazing, but it's

850
00:49:02,880 --> 00:49:06,080
Speaker 2: it's totally a distraction, and it's opposite from what the

851
00:49:06,120 --> 00:49:09,600
Speaker 2: industry needs to be focused on. So it's so frustrating

852
00:49:09,680 --> 00:49:10,880
Speaker 2: misunderstood in the industry.

853
00:49:12,560 --> 00:49:17,920
Speaker 1: Okay, what is the demo of subscriber of Spotify compared

854
00:49:18,040 --> 00:49:19,800
Speaker 1: to Apple and Amazon.

855
00:49:20,160 --> 00:49:22,120
Speaker 2: It's younger, and it's more global.

856
00:49:24,520 --> 00:49:26,920
Speaker 1: And it is also more active. Correct.

857
00:49:27,719 --> 00:49:28,960
Speaker 2: Yeah, I mean, I don't know if you could call

858
00:49:28,960 --> 00:49:31,640
Speaker 2: that a demo, but way more active. I think, on average,

859
00:49:31,680 --> 00:49:32,920
Speaker 2: probably about twice as active.

860
00:49:34,280 --> 00:49:39,480
Speaker 1: Okay. I was with a twenty something yesterday actually three

861
00:49:39,560 --> 00:49:43,480
Speaker 1: days ago, and she said she subscribed to Apple Music,

862
00:49:44,640 --> 00:49:48,479
Speaker 1: which shocked me. Okay, they're out there not getting into

863
00:49:48,520 --> 00:49:54,160
Speaker 1: my own personal feelings about this. Let's just assume someone

864
00:49:54,239 --> 00:49:56,919
Speaker 1: is listening and they don't have a subscription at all

865
00:49:57,040 --> 00:50:00,399
Speaker 1: or there with a rival service, Why should would they

866
00:50:00,400 --> 00:50:02,640
Speaker 1: be subscribing to Spotify instead.

867
00:50:03,560 --> 00:50:06,319
Speaker 2: I'm like, in a live pitch them. Yeah, oh this

868
00:50:06,400 --> 00:50:10,200
Speaker 2: is exciting. Well, I think you know, typically the things

869
00:50:10,239 --> 00:50:12,440
Speaker 2: that we see people calling out is the reason that

870
00:50:12,440 --> 00:50:17,160
Speaker 2: they come to Spotify or switch to Spotify is personalization.

871
00:50:17,680 --> 00:50:19,200
Speaker 2: You know, all the mixes that we make for you,

872
00:50:19,400 --> 00:50:21,239
Speaker 2: the way that the service kind of wraps around your

873
00:50:21,280 --> 00:50:23,840
Speaker 2: taste and get to know you. The second is ubiquity,

874
00:50:23,920 --> 00:50:27,279
Speaker 2: Like we've put in fifteen years into making sure run

875
00:50:27,480 --> 00:50:30,719
Speaker 2: every speaker, every TV, every car, wherever you are you

876
00:50:30,719 --> 00:50:34,120
Speaker 2: can get Spotify to work. That's a big part of it.

877
00:50:35,520 --> 00:50:37,640
Speaker 2: And then recently, I think a lot of the investments

878
00:50:37,680 --> 00:50:41,799
Speaker 2: that we've been making into kind of product innovation, being

879
00:50:41,800 --> 00:50:43,480
Speaker 2: able to have a jam with your friends where you

880
00:50:43,520 --> 00:50:46,960
Speaker 2: can all cue songs together, the DJ feature where you

881
00:50:47,000 --> 00:50:50,080
Speaker 2: have someone giving you context about the music, and you know,

882
00:50:50,120 --> 00:50:54,480
Speaker 2: serving recommendations. I think all those things have felt like

883
00:50:54,520 --> 00:50:57,040
Speaker 2: you're getting a little bit more value from this service

884
00:50:57,080 --> 00:50:59,239
Speaker 2: than maybe other places.

885
00:51:00,000 --> 00:51:05,839
Speaker 1: Okay, there was a recent book that analyze Spotify and

886
00:51:06,000 --> 00:51:11,319
Speaker 1: said there were tracks created and that these tracks were

887
00:51:11,320 --> 00:51:16,000
Speaker 1: created mostly in lean back music. We're taking away royalties

888
00:51:16,000 --> 00:51:19,040
Speaker 1: from the overall pool. Can you tell us about that?

889
00:51:20,280 --> 00:51:25,239
Speaker 2: Not true? Spotify creates zero tracks period. Every track that's

890
00:51:25,280 --> 00:51:29,960
Speaker 2: on Spotify comes from a third party, a licenser, which

891
00:51:30,040 --> 00:51:32,840
Speaker 2: is a label or a distributor. They distribute us tracks.

892
00:51:33,680 --> 00:51:36,560
Speaker 2: We publish and program the tracks, so we do not

893
00:51:36,719 --> 00:51:40,040
Speaker 2: make our own music, and we do not like pad

894
00:51:40,120 --> 00:51:43,040
Speaker 2: our service with you know, Spotify's own tracks.

895
00:51:43,760 --> 00:51:47,799
Speaker 1: How about different royalty rates for different companies, like a

896
00:51:47,920 --> 00:51:52,839
Speaker 1: music factory who's creating work for hire. Some guy comes in,

897
00:51:53,160 --> 00:51:57,720
Speaker 1: creates an atmospheric track. They put these into a pile

898
00:51:57,800 --> 00:52:01,799
Speaker 1: of let's say twenty five thousand tracks. You say, okay,

899
00:52:02,360 --> 00:52:05,600
Speaker 1: we'll program that, but we'll pay you a lesser royalty.

900
00:52:06,160 --> 00:52:10,880
Speaker 2: So we never say we'll program that period. But we've

901
00:52:11,040 --> 00:52:14,360
Speaker 2: never said in a deal you give us this and

902
00:52:14,400 --> 00:52:16,640
Speaker 2: we'll program it that. That's not a quid pro quo

903
00:52:16,760 --> 00:52:20,759
Speaker 2: that we would ever do. If you're asking, would we

904
00:52:20,800 --> 00:52:25,960
Speaker 2: pay the same royalty rate for uh SPA background music

905
00:52:25,960 --> 00:52:29,799
Speaker 2: as Kendrick Lamar, of course, I think any sane person

906
00:52:29,840 --> 00:52:34,360
Speaker 2: would assume we're not paying the same rate for forests,

907
00:52:34,960 --> 00:52:37,600
Speaker 2: you know, wind sounds as we are for you know,

908
00:52:37,680 --> 00:52:41,000
Speaker 2: the top acts in the world. That's always been the

909
00:52:41,080 --> 00:52:43,200
Speaker 2: case in the history of the music industry. You have

910
00:52:43,200 --> 00:52:45,719
Speaker 2: your production music in the bargain bin, you've got the

911
00:52:45,800 --> 00:52:48,520
Speaker 2: hits that have a higher wholesale rate. There's I don't

912
00:52:48,520 --> 00:52:51,560
Speaker 2: think anyone would be surprised by that. But as far

913
00:52:51,600 --> 00:52:56,080
Speaker 2: as background music, it's really been an emergent behavior of

914
00:52:56,120 --> 00:52:59,560
Speaker 2: the access model. Like what I mean by that is

915
00:53:01,160 --> 00:53:04,640
Speaker 2: there weren't a lot of people buying White Noise CDs

916
00:53:04,840 --> 00:53:07,799
Speaker 2: in the nineties, Are you really going to you know,

917
00:53:08,640 --> 00:53:11,040
Speaker 2: pay eight dollars to have that CD on hand for

918
00:53:11,080 --> 00:53:12,799
Speaker 2: when you want to listen to white Noise? Probably not,

919
00:53:13,160 --> 00:53:16,239
Speaker 2: but in the access model and streaming where you've already

920
00:53:16,239 --> 00:53:19,040
Speaker 2: paid your monthly subscription, but you want to have you know,

921
00:53:19,120 --> 00:53:22,040
Speaker 2: your our meditation session, or you want to have the

922
00:53:22,080 --> 00:53:24,920
Speaker 2: background noise so you're you know, toddler can take a nap.

923
00:53:25,120 --> 00:53:27,680
Speaker 2: It's become you know, it's become an important use case

924
00:53:27,680 --> 00:53:31,560
Speaker 2: to some people. It exists as an important playlisting category.

925
00:53:31,600 --> 00:53:34,920
Speaker 2: For us, it's been pretty consistent out of around one

926
00:53:34,920 --> 00:53:40,680
Speaker 2: to two percent of plays over the last decade. It

927
00:53:40,680 --> 00:53:43,000
Speaker 2: probably is about one to two percent of what we

928
00:53:43,040 --> 00:53:44,880
Speaker 2: think about day to day. It's Spotify, it's not a

929
00:53:44,960 --> 00:53:50,919
Speaker 2: huge part. And so there's no you know, uh, there's

930
00:53:50,920 --> 00:53:55,239
Speaker 2: no scheme, there's no I don't really know where the

931
00:53:55,280 --> 00:53:58,120
Speaker 2: myths and the controversy come from, but it's sort of

932
00:53:58,200 --> 00:54:00,759
Speaker 2: a natural evolution of having access to anything you want

933
00:54:00,800 --> 00:54:04,160
Speaker 2: that these kind of use cases become something that people do.

934
00:54:05,560 --> 00:54:09,879
Speaker 1: How do you decide which tracks get a lower royalty rate?

935
00:54:10,640 --> 00:54:13,080
Speaker 2: Well, I mean everything is a negotiation. So if you're

936
00:54:13,080 --> 00:54:17,839
Speaker 2: doing a deal with a production music company that specializes

937
00:54:17,920 --> 00:54:19,920
Speaker 2: and by the way, some of them are very good

938
00:54:20,280 --> 00:54:23,279
Speaker 2: at doing this really well. Like you have to make

939
00:54:23,320 --> 00:54:27,759
Speaker 2: the music. I think boring is probably the right word, Like,

940
00:54:28,360 --> 00:54:31,960
Speaker 2: don't distract the user when they're trying to meditate with vocals.

941
00:54:32,000 --> 00:54:34,000
Speaker 2: It's got to kind of just recede into the background

942
00:54:34,000 --> 00:54:37,000
Speaker 2: and be as like unnoticeable as possible. So I don't

943
00:54:37,040 --> 00:54:39,320
Speaker 2: want to diminish the skill that it takes to create

944
00:54:39,360 --> 00:54:43,440
Speaker 2: a great production library. It's it is certainly valuable. But

945
00:54:43,480 --> 00:54:45,640
Speaker 2: if you're negotiating with that type of label, obviously the

946
00:54:45,680 --> 00:54:47,279
Speaker 2: mechanics of that are going to be different than if

947
00:54:47,320 --> 00:54:50,480
Speaker 2: you're negotiating with someone that drives a lot of their

948
00:54:50,520 --> 00:54:52,560
Speaker 2: own demand that you know people are going to search

949
00:54:52,760 --> 00:54:56,160
Speaker 2: for that artist. It's not something that you know it's

950
00:54:56,239 --> 00:54:58,279
Speaker 2: just going to be a use case kind of music,

951
00:54:58,320 --> 00:55:00,320
Speaker 2: but people actually care about that artists and going to

952
00:55:00,360 --> 00:55:01,239
Speaker 2: search it out.

953
00:55:02,480 --> 00:55:07,360
Speaker 1: Okay, it's mostly in the jazz soft jazz world. Artist

954
00:55:07,400 --> 00:55:09,920
Speaker 1: you're saying, I put in all my effort I create

955
00:55:10,000 --> 00:55:15,480
Speaker 1: this and and to save money. Spotify is programming stuff

956
00:55:15,480 --> 00:55:19,320
Speaker 1: that's more from one of these music factories instead.

957
00:55:20,520 --> 00:55:23,279
Speaker 2: You know, from what we see. They just don't. They're

958
00:55:23,320 --> 00:55:26,399
Speaker 2: just not substitutional. Period. So, like, I'm a jazz fan,

959
00:55:27,480 --> 00:55:29,920
Speaker 2: and there are times that I seek out jazz and

960
00:55:29,960 --> 00:55:32,600
Speaker 2: I look for John Scholfield or Pamathany or I'm you know,

961
00:55:33,000 --> 00:55:35,759
Speaker 2: I'm looking for music because I care that I'm listening

962
00:55:35,840 --> 00:55:37,840
Speaker 2: to jazz. And then there's other times where I just

963
00:55:37,840 --> 00:55:40,560
Speaker 2: want background music. I don't think that you can get

964
00:55:41,000 --> 00:55:43,520
Speaker 2: someone who would be interested in jazz to be like,

965
00:55:43,800 --> 00:55:45,440
Speaker 2: don't you want to meditate right now? Or don't you

966
00:55:45,440 --> 00:55:47,640
Speaker 2: want to sleep right now? It's up to the user,

967
00:55:48,400 --> 00:55:50,880
Speaker 2: you know, what need they have. So it's just not

968
00:55:51,000 --> 00:55:54,040
Speaker 2: a viable idea to say, oh, let's take someone that

969
00:55:54,080 --> 00:55:58,080
Speaker 2: would be looking for, you know, what's the latest in jazz,

970
00:55:58,160 --> 00:56:01,359
Speaker 2: or let me go listen to Pamathany and instead give them,

971
00:56:02,000 --> 00:56:05,000
Speaker 2: you know, background production music. It just doesn't work like that.

972
00:56:06,120 --> 00:56:11,640
Speaker 1: Okay, are there any companies that makes soft jazz that

973
00:56:11,719 --> 00:56:14,319
Speaker 1: you have an overall deal with that you pay less to?

974
00:56:15,880 --> 00:56:18,000
Speaker 2: I don't know if any of the production music, I

975
00:56:18,040 --> 00:56:20,000
Speaker 2: don't know how much it goes into soft jazz or

976
00:56:20,040 --> 00:56:22,800
Speaker 2: if it's more the white noise kind of baby sleep

977
00:56:23,520 --> 00:56:28,640
Speaker 2: nature sounds side of it. I'm sure there's some blurring

978
00:56:28,719 --> 00:56:31,040
Speaker 2: of the edges, but what I can tell you is

979
00:56:31,080 --> 00:56:33,799
Speaker 2: that for any of these playlists, like if you look

980
00:56:33,840 --> 00:56:41,480
Speaker 2: at our noise meditation or our relaxation playlists or whatever,

981
00:56:41,840 --> 00:56:44,480
Speaker 2: the people you know, just so you see what it

982
00:56:44,480 --> 00:56:46,960
Speaker 2: looks like on the inside. Within the company, the people

983
00:56:46,960 --> 00:56:53,120
Speaker 2: who are responsible for programming that playlist, they are accountable

984
00:56:53,239 --> 00:56:57,560
Speaker 2: to that playlist performing the best with consumers. So they

985
00:56:57,600 --> 00:56:59,279
Speaker 2: need to go in and say, every time I add

986
00:56:59,280 --> 00:57:03,759
Speaker 2: some of the playlist, people skip less and they stream more,

987
00:57:04,280 --> 00:57:07,040
Speaker 2: and so they need to put the stuff in it

988
00:57:07,120 --> 00:57:09,000
Speaker 2: that is the best. That is their incentive is to

989
00:57:09,000 --> 00:57:12,080
Speaker 2: program it with the you know, the content that people

990
00:57:12,120 --> 00:57:15,480
Speaker 2: want for that use case or or for that playlist.

991
00:57:15,520 --> 00:57:17,960
Speaker 2: They're not asked to, you know, do it from here

992
00:57:18,080 --> 00:57:19,360
Speaker 2: or do it from there. They're asked to put the

993
00:57:19,400 --> 00:57:21,440
Speaker 2: best stuff in there that's going to perform best for

994
00:57:21,440 --> 00:57:23,440
Speaker 2: the user, because that's what gets people to retain in

995
00:57:23,480 --> 00:57:26,440
Speaker 2: their subscription and grows our revenue.

996
00:57:26,760 --> 00:57:33,120
Speaker 1: Okay, you're out there, you're somewhere, you're at dinner, you're

997
00:57:33,160 --> 00:57:36,360
Speaker 1: at a show, you're at a party, and it comes

998
00:57:36,400 --> 00:57:41,920
Speaker 1: out you work at Spotify. How do people react well?

999
00:57:42,800 --> 00:57:48,800
Speaker 2: For the most part, people who are not in the

1000
00:57:48,920 --> 00:57:54,880
Speaker 2: music industry have lovely things to say about Spotify because

1001
00:57:55,160 --> 00:57:58,040
Speaker 2: from a consumer standpoint, it's been life changing. You know,

1002
00:57:58,400 --> 00:58:01,400
Speaker 2: like I feel like I get a amazing surplus of value.

1003
00:58:01,440 --> 00:58:02,960
Speaker 2: I get to listen to anything in the world. Your

1004
00:58:02,960 --> 00:58:05,240
Speaker 2: playlists are amazing. When I talk to people who are

1005
00:58:05,240 --> 00:58:08,120
Speaker 2: in the music industry, they have lots more interesting things

1006
00:58:08,160 --> 00:58:09,800
Speaker 2: to ask me about, you know, how do I get

1007
00:58:09,840 --> 00:58:15,040
Speaker 2: on playlists? And how do your royalty rates work? And

1008
00:58:15,320 --> 00:58:17,040
Speaker 2: all sorts of stuff. But you know, if you're talking

1009
00:58:17,040 --> 00:58:19,640
Speaker 2: about just day to day interactions, I think people have been,

1010
00:58:21,040 --> 00:58:24,160
Speaker 2: you know, overjoyed about the way that Spotify plays in

1011
00:58:24,200 --> 00:58:27,919
Speaker 2: their life, how it's soundtracked different moments of their life,

1012
00:58:27,960 --> 00:58:30,440
Speaker 2: the role it plays with the time they spend with

1013
00:58:30,480 --> 00:58:32,520
Speaker 2: their kids. I mean, that's really one of the things

1014
00:58:32,520 --> 00:58:36,200
Speaker 2: that has kept me at Spotify for now fourteen years,

1015
00:58:36,320 --> 00:58:40,200
Speaker 2: is like there's just so few products that have one

1016
00:58:40,440 --> 00:58:43,760
Speaker 2: a real role in people's lives, you know, that is

1017
00:58:43,840 --> 00:58:46,560
Speaker 2: used by so many different people, but two in kind

1018
00:58:46,600 --> 00:58:50,400
Speaker 2: of a I would argue, like a purely positive way.

1019
00:58:50,480 --> 00:58:53,160
Speaker 2: You know, you don't hear parents say I got to

1020
00:58:53,160 --> 00:58:55,400
Speaker 2: get my kid to spend less time with Spotify. I

1021
00:58:55,400 --> 00:58:58,040
Speaker 2: think more time that people spend with Spotify, whether it's

1022
00:58:58,120 --> 00:59:01,960
Speaker 2: you know, podcasts or music, it's you know, it's enriching,

1023
00:59:02,000 --> 00:59:06,520
Speaker 2: it's making your life. I don't know better in some ways,

1024
00:59:06,560 --> 00:59:08,840
Speaker 2: you don't feel like, oh that hour that I just

1025
00:59:08,880 --> 00:59:12,200
Speaker 2: spent has kind of robbed me of something or made

1026
00:59:12,240 --> 00:59:14,840
Speaker 2: me feel worse or something. So you know, that's usually

1027
00:59:14,840 --> 00:59:16,880
Speaker 2: what I hear about from most folks.

1028
00:59:17,520 --> 00:59:21,760
Speaker 1: Okay, we've covered Indie. Tell me about your relationship with

1029
00:59:21,840 --> 00:59:24,160
Speaker 1: the three major labels in large independence.

1030
00:59:26,760 --> 00:59:32,120
Speaker 2: Well, I think that right now our relationship with the

1031
00:59:32,160 --> 00:59:35,160
Speaker 2: industry is probably the healthiest it's been. I mean, look,

1032
00:59:35,200 --> 00:59:37,360
Speaker 2: in an industry like ours, you're always going to have

1033
00:59:37,440 --> 00:59:41,040
Speaker 2: your debates d jure about what's going on in the

1034
00:59:41,040 --> 00:59:45,640
Speaker 2: industry and things that you can argue about. But in

1035
00:59:45,680 --> 00:59:50,000
Speaker 2: a world where our incentives are so aligned, we all

1036
00:59:50,040 --> 00:59:51,440
Speaker 2: want to get more people in the world to pay

1037
00:59:51,480 --> 00:59:53,240
Speaker 2: for music. We all want to figure out how to

1038
00:59:53,400 --> 00:59:56,400
Speaker 2: raise prices in a way that's going to maximize revenue. Together,

1039
00:59:56,480 --> 00:59:58,640
Speaker 2: we all want to figure out a way to add

1040
00:59:58,680 --> 01:00:00,680
Speaker 2: more value to the subscription and so that we can

1041
01:00:00,720 --> 01:00:04,600
Speaker 2: add more tiers or things like that. The conversations that

1042
01:00:04,680 --> 01:00:08,800
Speaker 2: I feel like we're in day to day, we're more aligned,

1043
01:00:08,840 --> 01:00:11,080
Speaker 2: you know, we want the same things. Of course, there's

1044
01:00:11,080 --> 01:00:12,760
Speaker 2: always going to be things to figure out, but you know,

1045
01:00:12,760 --> 01:00:14,760
Speaker 2: if you talk about the state of those relationships, I

1046
01:00:14,760 --> 01:00:17,440
Speaker 2: think they're you know, they're as good as I've ever

1047
01:00:17,440 --> 01:00:20,240
Speaker 2: seen them. Being at Spotify for the last fourteen years.

1048
01:00:21,560 --> 01:00:25,920
Speaker 1: How often do you speak with people from the major labels?

1049
01:00:28,240 --> 01:00:29,439
Speaker 2: Definitely a few times a month.

1050
01:00:31,160 --> 01:00:35,520
Speaker 1: Okay, you're saying you could talk to someone from Innerscope

1051
01:00:35,640 --> 01:00:38,520
Speaker 1: once a month, three times a month.

1052
01:00:39,080 --> 01:00:43,840
Speaker 2: Well, in my role, I typically am interfacing more with

1053
01:00:43,920 --> 01:00:46,240
Speaker 2: people who are in the central corporate teams and the

1054
01:00:46,240 --> 01:00:50,280
Speaker 2: major labels more so than the frontline labels. The frontline

1055
01:00:50,320 --> 01:00:52,920
Speaker 2: labels have teams they can work with at Spotify on

1056
01:00:53,760 --> 01:00:55,600
Speaker 2: this is the new release coming from this artist. We

1057
01:00:55,640 --> 01:00:57,080
Speaker 2: want to give you heads up about it. We want

1058
01:00:57,080 --> 01:00:59,040
Speaker 2: to get prepared how we're going to partner around it.

1059
01:00:59,040 --> 01:01:01,720
Speaker 2: That's you know, that's that's less of my day to.

1060
01:01:01,760 --> 01:01:05,440
Speaker 1: Day just staying on that. Yeah, lessons daity, how does

1061
01:01:05,480 --> 01:01:06,520
Speaker 1: that actually work?

1062
01:01:08,320 --> 01:01:15,880
Speaker 2: Well? I mean, as you know, so much of a

1063
01:01:15,960 --> 01:01:18,600
Speaker 2: new releases promotional cycle now has shifted to the pre

1064
01:01:18,680 --> 01:01:24,560
Speaker 2: release phase, building hype, teasing it, getting people excited about it.

1065
01:01:25,160 --> 01:01:29,120
Speaker 2: And one of the ways that Spotify and markets its

1066
01:01:29,160 --> 01:01:35,720
Speaker 2: service is in collaboration with artists. So we try to

1067
01:01:35,800 --> 01:01:39,680
Speaker 2: do co marketing with artists that not only attract attention

1068
01:01:39,760 --> 01:01:42,520
Speaker 2: to them, but might be the reason that someone joined

1069
01:01:42,560 --> 01:01:45,400
Speaker 2: Spotify for the first time. Like if you're sixteen and

1070
01:01:45,520 --> 01:01:51,360
Speaker 2: you see, oh, here's chaperone advertisement with Spotify, I want

1071
01:01:51,360 --> 01:01:53,560
Speaker 2: to make sure I get that new release on release day,

1072
01:01:53,600 --> 01:01:56,240
Speaker 2: and that could be the reason that you join Spotify.

1073
01:01:56,320 --> 01:01:58,640
Speaker 2: So a lot of times you try to coordinate, you know,

1074
01:01:58,680 --> 01:02:01,440
Speaker 2: sort of co marketing together around a new release.

1075
01:02:02,680 --> 01:02:07,120
Speaker 1: Well what about people who say that Spotify is run

1076
01:02:07,160 --> 01:02:11,480
Speaker 1: presently streaming in general's run present like radio, where the

1077
01:02:11,560 --> 01:02:16,640
Speaker 1: majors have a dominant relationship in market share and mind share.

1078
01:02:18,160 --> 01:02:21,240
Speaker 2: Every data point says the exact opposite thing. I mean,

1079
01:02:22,840 --> 01:02:27,640
Speaker 2: if you're if the assertion is that the majors dominate

1080
01:02:27,680 --> 01:02:31,240
Speaker 2: more than ever before, that's certainly not what we're seeing, right.

1081
01:02:31,280 --> 01:02:34,280
Speaker 2: We're seeing more share go to indies than ever before.

1082
01:02:34,360 --> 01:02:37,840
Speaker 2: We're seeing more DIY success than ever before. So I

1083
01:02:37,920 --> 01:02:40,240
Speaker 2: don't I haven't seen any data to support the idea

1084
01:02:40,280 --> 01:02:43,880
Speaker 2: that the industry is getting more and more dominated by

1085
01:02:44,120 --> 01:02:44,840
Speaker 2: major labels.

1086
01:02:45,880 --> 01:02:49,360
Speaker 1: Okay, it is a relationship business. I personally know people

1087
01:02:49,400 --> 01:02:53,080
Speaker 1: who have relationships with people at Spotify and work them

1088
01:02:53,120 --> 01:02:57,120
Speaker 1: on records. Yeah, somebody who's in Timbuctoo's got a record

1089
01:02:57,280 --> 01:03:01,840
Speaker 1: doesn't have that relationship. Relationship must pay dividends.

1090
01:03:02,800 --> 01:03:05,840
Speaker 2: Well, I think so if we separate two things, we

1091
01:03:05,880 --> 01:03:08,800
Speaker 2: talk about marketing, we talk about playlisting. Earlier I talked

1092
01:03:08,840 --> 01:03:12,919
Speaker 2: about our playlist pitching system where we've tried to make

1093
01:03:13,000 --> 01:03:16,520
Speaker 2: as level of a playing field as possible, and so

1094
01:03:16,560 --> 01:03:18,680
Speaker 2: it's not about who can get in the building and

1095
01:03:18,720 --> 01:03:21,880
Speaker 2: play their record on a stereo. It's it all comes

1096
01:03:21,880 --> 01:03:24,480
Speaker 2: through the same tool. People evaluate it with their headphones on.

1097
01:03:24,560 --> 01:03:26,760
Speaker 2: They decide, you know, our editors decide what they want

1098
01:03:26,760 --> 01:03:28,520
Speaker 2: to get behind. So that's one piece of it. And

1099
01:03:28,560 --> 01:03:32,880
Speaker 2: then on the co marketing side, we are our interest

1100
01:03:32,880 --> 01:03:38,520
Speaker 2: is in partnering with artist brands where they're bringing something

1101
01:03:38,520 --> 01:03:41,560
Speaker 2: to the table, an audience, an excitement, right, and so

1102
01:03:41,840 --> 01:03:44,200
Speaker 2: when we see that, it can be from any angle.

1103
01:03:44,200 --> 01:03:46,800
Speaker 2: It could be an independent artist, it could be an

1104
01:03:46,800 --> 01:03:49,160
Speaker 2: indie major distributor urist, it could be a major as

1105
01:03:49,240 --> 01:03:52,840
Speaker 2: signed artist. If it's if it's an artist that doing

1106
01:03:52,880 --> 01:03:55,680
Speaker 2: a marketing tie up can be beneficial to both sides

1107
01:03:55,880 --> 01:04:00,200
Speaker 2: because it allows us to have an interesting camp pain

1108
01:04:00,360 --> 01:04:02,840
Speaker 2: and speak to a demo or a fan base that

1109
01:04:02,840 --> 01:04:07,840
Speaker 2: we'd like to reach. It doesn't really matter. Yeah, the

1110
01:04:08,600 --> 01:04:12,240
Speaker 2: exact kind of deal structure they have with their label.

1111
01:04:19,960 --> 01:04:23,760
Speaker 1: Okay, I know people who have worked for Spotify no

1112
01:04:23,840 --> 01:04:26,520
Speaker 1: longer worked there anymore for whatever reason.

1113
01:04:26,640 --> 01:04:27,160
Speaker 2: Uh huh.

1114
01:04:27,200 --> 01:04:31,920
Speaker 1: And they said traditionally drop date is Friday. And they said,

1115
01:04:32,000 --> 01:04:35,680
Speaker 1: with some of these major racks, they can tell by

1116
01:04:36,360 --> 01:04:39,920
Speaker 1: early afternoon whether the albums is stiff for a success.

1117
01:04:40,040 --> 01:04:40,880
Speaker 1: Can you speak to that?

1118
01:04:42,720 --> 01:04:45,600
Speaker 2: I think that. Yeah, So typically stuff is coming out

1119
01:04:45,640 --> 01:04:50,960
Speaker 2: Thursday night midnight, and yeah, signals tend to emerge pretty

1120
01:04:51,000 --> 01:04:54,160
Speaker 2: quickly in terms of again, how often are people sharing

1121
01:04:54,160 --> 01:04:56,480
Speaker 2: the track, saving the track, repeap, playing the track. Those

1122
01:04:56,520 --> 01:04:58,000
Speaker 2: signals start coming through pretty quick.

1123
01:05:00,120 --> 01:05:04,800
Speaker 1: What would you tell someone who has, you know, a

1124
01:05:04,840 --> 01:05:07,360
Speaker 1: household name to a degree everything you say it's an

1125
01:05:07,360 --> 01:05:11,000
Speaker 1: interest today that the indicators are not good at first,

1126
01:05:11,400 --> 01:05:13,960
Speaker 1: what would you tell them to try to prop up

1127
01:05:14,000 --> 01:05:14,760
Speaker 1: the music?

1128
01:05:15,760 --> 01:05:20,520
Speaker 2: Well, so everything is context dependent. What I mean by

1129
01:05:20,520 --> 01:05:27,200
Speaker 2: that is, you know, if you take a song and

1130
01:05:27,240 --> 01:05:29,800
Speaker 2: put it in hot country and it doesn't perform well,

1131
01:05:30,000 --> 01:05:31,760
Speaker 2: it could be because it's just not a song that's

1132
01:05:31,800 --> 01:05:33,600
Speaker 2: going to resonate with anyone. But it also could be

1133
01:05:33,640 --> 01:05:35,600
Speaker 2: that the people who are listening to that playlist, they're

1134
01:05:35,640 --> 01:05:37,880
Speaker 2: not your people. You got to find some different people.

1135
01:05:39,440 --> 01:05:42,480
Speaker 2: Our system tries to do that automatically. But sometimes it's

1136
01:05:42,520 --> 01:05:45,800
Speaker 2: also about like, you know, who's this artist partnering with,

1137
01:05:45,920 --> 01:05:48,720
Speaker 2: where are they talking what? You know, like what culture

1138
01:05:48,720 --> 01:05:51,680
Speaker 2: are they trying to like appeal to. And sometimes it's

1139
01:05:51,680 --> 01:05:56,840
Speaker 2: about finding your zone a little bit. And you know,

1140
01:05:56,920 --> 01:05:59,360
Speaker 2: I think that sometimes it can be a track that

1141
01:05:59,400 --> 01:06:02,640
Speaker 2: will perform, just needs to be in a different type

1142
01:06:02,680 --> 01:06:03,520
Speaker 2: of context.

1143
01:06:03,920 --> 01:06:07,160
Speaker 1: Okay, let's just talk to someone who's truly a household names. Yeah,

1144
01:06:07,240 --> 01:06:11,720
Speaker 1: they dropped their new album, numbers are not good. It

1145
01:06:11,760 --> 01:06:15,439
Speaker 1: wouldn't be about classifying the niche. What might you tell

1146
01:06:15,560 --> 01:06:18,880
Speaker 1: them to say, this is a way for you to

1147
01:06:19,040 --> 01:06:20,360
Speaker 1: make the album sustain.

1148
01:06:21,640 --> 01:06:24,120
Speaker 2: It's hard to fight gravity. So I don't know that

1149
01:06:24,160 --> 01:06:26,400
Speaker 2: I have any magic answers to that, but you know,

1150
01:06:26,520 --> 01:06:28,840
Speaker 2: at the very least, you're always gonna have, like, if

1151
01:06:28,880 --> 01:06:31,320
Speaker 2: you're talking about an established name, you're probably gonna have

1152
01:06:31,720 --> 01:06:33,720
Speaker 2: some diehards that are gonna be with you no matter what.

1153
01:06:34,240 --> 01:06:36,080
Speaker 2: And so some records are gonna be the kind that

1154
01:06:36,120 --> 01:06:38,800
Speaker 2: are like I was even with you on that album,

1155
01:06:38,880 --> 01:06:40,640
Speaker 2: even though it didn't kind of cross over to be

1156
01:06:40,680 --> 01:06:44,080
Speaker 2: a pop hit. You always have that. But I don't

1157
01:06:44,080 --> 01:06:45,920
Speaker 2: know that I have a magic answer outside of that.

1158
01:06:46,800 --> 01:06:51,840
Speaker 1: Okay, let's assume I'm an act with some fan. Should

1159
01:06:51,840 --> 01:06:54,120
Speaker 1: I put out a single? Should I put out an EP?

1160
01:06:54,400 --> 01:06:57,760
Speaker 1: How frequently should I put out my music? Yeah?

1161
01:06:57,880 --> 01:07:01,120
Speaker 2: I think there can be a lot of for success.

1162
01:07:01,360 --> 01:07:03,520
Speaker 2: But I do think one of the big challenges with

1163
01:07:03,680 --> 01:07:10,640
Speaker 2: music is the long periods that can sometimes happen between releases,

1164
01:07:11,920 --> 01:07:15,120
Speaker 2: where you kind of people start forgetting or fraying a

1165
01:07:15,200 --> 01:07:19,760
Speaker 2: little bit. So I do think that there's a pretty clear,

1166
01:07:20,640 --> 01:07:23,440
Speaker 2: you know, evidence that if you can keep a heartbeat

1167
01:07:23,480 --> 01:07:27,520
Speaker 2: of engagement and keep you know, a touch point with

1168
01:07:27,600 --> 01:07:29,960
Speaker 2: the fans, it's a little bit easier when the next

1169
01:07:29,960 --> 01:07:32,760
Speaker 2: big project drops to have them ready and warmed up

1170
01:07:32,840 --> 01:07:38,760
Speaker 2: and waiting. Dripping singles has been a pretty effective strategy

1171
01:07:38,800 --> 01:07:41,160
Speaker 2: for that. So it tends to work a little better if,

1172
01:07:41,400 --> 01:07:43,080
Speaker 2: you know, if you've got a big release coming in

1173
01:07:43,120 --> 01:07:46,960
Speaker 2: three months, if you can drip out one to five

1174
01:07:47,480 --> 01:07:50,720
Speaker 2: singles along the way, every single one of those drops

1175
01:07:50,760 --> 01:07:53,440
Speaker 2: is an opportunity to drive word of mouth and attention

1176
01:07:53,680 --> 01:07:57,400
Speaker 2: and algorithmic you know, signal and relevancy. That just increases

1177
01:07:57,440 --> 01:07:59,800
Speaker 2: the chances that when the full project drops, you know,

1178
01:08:00,120 --> 01:08:01,680
Speaker 2: gonna do as well as I can possibly do.

1179
01:08:03,280 --> 01:08:06,400
Speaker 1: And what about the number of tracks on an album.

1180
01:08:06,720 --> 01:08:08,640
Speaker 1: You know, there's been a trend of acts. I mean,

1181
01:08:08,680 --> 01:08:11,760
Speaker 1: listening to Morgan Wallen's a perfect example. The last couple

1182
01:08:11,800 --> 01:08:15,320
Speaker 1: of albums have been double albums. One of the analysisses, well,

1183
01:08:15,320 --> 01:08:19,080
Speaker 1: they're gonna make more money.

1184
01:08:19,360 --> 01:08:26,360
Speaker 2: I you know, maybe I'm thinking too artistically puist, but

1185
01:08:26,840 --> 01:08:31,479
Speaker 2: in my gut it is if you've got eighteen amazing

1186
01:08:31,520 --> 01:08:33,839
Speaker 2: tracks that you really believe in, put out all eighteen.

1187
01:08:34,240 --> 01:08:36,599
Speaker 2: If you've got nine and you try to force another nine,

1188
01:08:36,680 --> 01:08:38,320
Speaker 2: it's not gonna work. I mean, you can make an

1189
01:08:38,360 --> 01:08:41,320
Speaker 2: eighteen album, but I don't think you can mathematically engineer

1190
01:08:41,439 --> 01:08:42,000
Speaker 2: these things.

1191
01:08:42,240 --> 01:08:42,400
Speaker 1: Now.

1192
01:08:42,439 --> 01:08:45,599
Speaker 2: Certainly, if you've got a twenty track album and people

1193
01:08:45,640 --> 01:08:48,439
Speaker 2: start listening to it from the beginning and they play

1194
01:08:48,479 --> 01:08:52,040
Speaker 2: through the end, that's gonna generate more royalty bearing streams.

1195
01:08:52,320 --> 01:08:55,800
Speaker 2: That's just math. But the songs have to be good

1196
01:08:55,880 --> 01:08:57,599
Speaker 2: enough where they don't skip and they don't tune out,

1197
01:08:57,640 --> 01:08:58,920
Speaker 2: So at the end of the day, it's really like

1198
01:08:59,120 --> 01:09:03,040
Speaker 2: what you have that should dictate the release strategy.

1199
01:09:03,120 --> 01:09:07,960
Speaker 1: If you talk to certainly the acts that are less popular,

1200
01:09:08,920 --> 01:09:11,840
Speaker 1: they say they have to make an album. That's the

1201
01:09:11,880 --> 01:09:15,479
Speaker 1: only way they can get press. Otherwise, if they put

1202
01:09:15,520 --> 01:09:18,519
Speaker 1: out a single, they can't get press and they can

1203
01:09:18,560 --> 01:09:21,960
Speaker 1: get no action on streaming. What do you say to that.

1204
01:09:22,320 --> 01:09:24,960
Speaker 2: I just don't think there's one way. I mean the

1205
01:09:25,040 --> 01:09:27,640
Speaker 2: traditional like I'm going to drop an album, I'm going

1206
01:09:27,720 --> 01:09:29,680
Speaker 2: to do a press tour around the album. That is

1207
01:09:29,720 --> 01:09:31,320
Speaker 2: a way you can do it that way. But I

1208
01:09:31,320 --> 01:09:35,160
Speaker 2: think there's plenty of examples of a single EP or

1209
01:09:35,200 --> 01:09:38,000
Speaker 2: a single track having its own moment, and that's cool too.

1210
01:09:39,640 --> 01:09:44,440
Speaker 1: Okay, let's go back to the artist tools for Spotify.

1211
01:09:45,600 --> 01:09:49,920
Speaker 1: Let's just make it an independent artist because they're more

1212
01:09:49,960 --> 01:09:53,280
Speaker 1: wet behind the years. I am putting on a track

1213
01:09:53,720 --> 01:09:56,200
Speaker 1: on Spotify and I want to have a career. This

1214
01:09:56,320 --> 01:09:58,160
Speaker 1: is not something I did in my basement when I

1215
01:09:58,200 --> 01:10:04,040
Speaker 1: got home from being a CPA. Yeah, I used a distributor.

1216
01:10:04,880 --> 01:10:08,840
Speaker 1: The track is populated on Spotify. What can I do

1217
01:10:09,520 --> 01:10:11,919
Speaker 1: in terms of all the tools you were mentioning earlier.

1218
01:10:12,720 --> 01:10:15,720
Speaker 2: Yeah, So to name a few I think we we

1219
01:10:15,840 --> 01:10:19,799
Speaker 2: tend to think about this stuff in the release cycle.

1220
01:10:20,160 --> 01:10:24,679
Speaker 2: So pre release, we have a tool called the countdown page.

1221
01:10:25,400 --> 01:10:31,400
Speaker 1: UHHOA let's start at the raw level. I am an artist. Yeah,

1222
01:10:31,439 --> 01:10:33,960
Speaker 1: I have a track that's going to come out on Spotify.

1223
01:10:34,600 --> 01:10:38,080
Speaker 1: Is there a general dashboard that I sign up for?

1224
01:10:39,600 --> 01:10:41,400
Speaker 2: Yes, that's the Spotify for Artists tool.

1225
01:10:42,400 --> 01:10:46,759
Speaker 1: Okay, so I sign up for that. What's my next

1226
01:10:46,800 --> 01:10:48,840
Speaker 1: step or my next options?

1227
01:10:49,320 --> 01:10:50,960
Speaker 2: Well, we try to take you through this journey, so

1228
01:10:50,960 --> 01:10:52,920
Speaker 2: we have recommended steps for you that kind of guide

1229
01:10:52,960 --> 01:10:55,640
Speaker 2: you through. So if I can just take it in

1230
01:10:55,680 --> 01:11:00,400
Speaker 2: a timeline countdown page, first step, so you and that

1231
01:11:00,439 --> 01:11:02,840
Speaker 2: a project is coming and people can see there's like

1232
01:11:02,880 --> 01:11:05,280
Speaker 2: a placeholder pre save it now, there's going to be

1233
01:11:05,400 --> 01:11:08,720
Speaker 2: music here soon. That's an opportunity to gain attention. And

1234
01:11:08,920 --> 01:11:11,800
Speaker 2: in that countdown page you can drip out stuff, so

1235
01:11:11,840 --> 01:11:13,920
Speaker 2: you can do a clip of you in the studio,

1236
01:11:14,160 --> 01:11:18,719
Speaker 2: you can tease you know, twenty seconds of an upcoming song.

1237
01:11:19,600 --> 01:11:22,160
Speaker 2: You can tell a story with video tools, so that's

1238
01:11:22,160 --> 01:11:24,280
Speaker 2: an important part of it. Then there's a bunch of

1239
01:11:24,280 --> 01:11:30,439
Speaker 2: stuff to do to get ready to have your your

1240
01:11:30,479 --> 01:11:34,200
Speaker 2: best audience on release day. So typically we see a

1241
01:11:34,200 --> 01:11:37,519
Speaker 2: good pattern of using discovery Mode on catalog leading up

1242
01:11:37,560 --> 01:11:40,200
Speaker 2: to release day, So warm up your catalog, get people

1243
01:11:40,200 --> 01:11:43,320
Speaker 2: hearing your catalog more so that there's more people who

1244
01:11:43,320 --> 01:11:45,960
Speaker 2: have followed you or are fans of you on release

1245
01:11:46,040 --> 01:11:48,920
Speaker 2: day that it's going to get blasted to. Then on

1246
01:11:49,120 --> 01:11:52,800
Speaker 2: release day, you know, you drop your album. There are

1247
01:11:52,840 --> 01:11:55,599
Speaker 2: a couple free to use tools that are pretty important.

1248
01:11:56,240 --> 01:12:01,000
Speaker 2: One is canvas, so having moving visuals with the track

1249
01:12:01,040 --> 01:12:02,920
Speaker 2: as opposed to just stat at cover art. That's something

1250
01:12:02,960 --> 01:12:06,280
Speaker 2: you can upload in the tool that increases engagement. That's important,

1251
01:12:06,479 --> 01:12:08,560
Speaker 2: show your brand, let people see what you're about a

1252
01:12:08,600 --> 01:12:11,120
Speaker 2: little bit more. And also the playlist pitching tool that

1253
01:12:11,160 --> 01:12:13,599
Speaker 2: I mentioned before. Those are important things to do for sure.

1254
01:12:14,080 --> 01:12:16,759
Speaker 2: And then there's a paid tool on release day called Marquee,

1255
01:12:17,080 --> 01:12:19,320
Speaker 2: which is to announce your new release to people who

1256
01:12:19,400 --> 01:12:24,200
Speaker 2: are listeners or potential listeners. And then after release day

1257
01:12:25,760 --> 01:12:29,439
Speaker 2: to sustain engagement, like discovery Mode on the actual record

1258
01:12:29,439 --> 01:12:33,599
Speaker 2: that you put out, can be a good tool. Coming

1259
01:12:33,640 --> 01:12:36,680
Speaker 2: back and adding maybe more of a deluxe version by

1260
01:12:36,680 --> 01:12:40,040
Speaker 2: adding clips behind each track, telling a story behind the track,

1261
01:12:40,160 --> 01:12:42,160
Speaker 2: what it means, how it was written, things like that.

1262
01:12:42,320 --> 01:12:44,360
Speaker 2: Those are things that can maybe take something that's starting

1263
01:12:44,360 --> 01:12:46,439
Speaker 2: to die off and give it a reason to get

1264
01:12:46,479 --> 01:12:49,760
Speaker 2: reconsidered again and have a little bit of a second life,

1265
01:12:49,800 --> 01:12:51,880
Speaker 2: if that makes sense. So we try to guide people

1266
01:12:51,880 --> 01:12:56,799
Speaker 2: through that whole journey in the Spotify for Artists product, And.

1267
01:12:56,720 --> 01:13:02,720
Speaker 1: That's all your Internet. It's not talking to anybody, it's

1268
01:13:02,760 --> 01:13:04,160
Speaker 1: clicking and uploading.

1269
01:13:04,320 --> 01:13:06,800
Speaker 2: Everything that I just went through is self serve and

1270
01:13:06,880 --> 01:13:10,160
Speaker 2: accessible to anyone, you know, with there are sometimes minimum

1271
01:13:10,280 --> 01:13:12,519
Speaker 2: viable audience thresholds you need to have, like I was

1272
01:13:12,560 --> 01:13:15,360
Speaker 2: mentioning earlier about discovery Mode, but other than that, it's

1273
01:13:15,360 --> 01:13:17,960
Speaker 2: accessible to anyone in Spotify Artists.

1274
01:13:17,960 --> 01:13:23,000
Speaker 1: Okay, So staying on that point, if I'm a new artist,

1275
01:13:23,720 --> 01:13:25,519
Speaker 1: you're not going to be able to push out to

1276
01:13:25,600 --> 01:13:29,120
Speaker 1: my fans pre release information.

1277
01:13:28,720 --> 01:13:35,160
Speaker 2: Correct, That's right. So really the best system that we

1278
01:13:35,240 --> 01:13:37,559
Speaker 2: have for brand new artists, like if you're coming out

1279
01:13:37,600 --> 01:13:44,280
Speaker 2: from from zero, is our Fresh Fines franchise. So we

1280
01:13:44,439 --> 01:13:49,840
Speaker 2: have an algorithm that looks at all the listeners that

1281
01:13:49,960 --> 01:13:52,719
Speaker 2: tend to listen to stuff before it really breaks out.

1282
01:13:52,880 --> 01:13:55,040
Speaker 2: They tend to be like way on the beginning of

1283
01:13:55,080 --> 01:13:58,880
Speaker 2: the curve, what are they listening to right now? And

1284
01:13:58,920 --> 01:14:01,840
Speaker 2: then we and then we feature those artists in these

1285
01:14:01,880 --> 01:14:04,080
Speaker 2: Fresh Finds playlists, and we have them for every genre.

1286
01:14:04,280 --> 01:14:05,920
Speaker 2: And this is like the create Diggers. Like, if you

1287
01:14:05,960 --> 01:14:07,680
Speaker 2: want to be a year ahead of who's going to

1288
01:14:07,720 --> 01:14:10,120
Speaker 2: be the cool new indie artist, that's the place to look,

1289
01:14:10,120 --> 01:14:13,240
Speaker 2: and we try to feature those people in Fresh Finds.

1290
01:14:13,240 --> 01:14:15,720
Speaker 2: So if you're building a little bulls on social or like,

1291
01:14:15,960 --> 01:14:17,759
Speaker 2: you know, people are talking about you on the Internet,

1292
01:14:18,360 --> 01:14:20,519
Speaker 2: and then people start listening to you who are ahead

1293
01:14:20,520 --> 01:14:22,680
Speaker 2: of the curve, you get featured there and then a

1294
01:14:22,720 --> 01:14:25,440
Speaker 2: lot of times that builds up enough of a listenership

1295
01:14:25,479 --> 01:14:29,040
Speaker 2: where some of these other tools are accessible to you.

1296
01:14:30,920 --> 01:14:35,080
Speaker 1: Okay, I'm a brand new artist, theoretically I might be

1297
01:14:35,120 --> 01:14:41,280
Speaker 1: able to be on Fresh Finds. This is all without

1298
01:14:41,320 --> 01:14:44,479
Speaker 1: people involved. You're collecting data from socials. How do you

1299
01:14:44,560 --> 01:14:47,040
Speaker 1: know that I have some traction outside Spotify?

1300
01:14:47,240 --> 01:14:50,639
Speaker 2: Well, one of the biggest signals is on Spotify data,

1301
01:14:51,080 --> 01:14:54,880
Speaker 2: but listeners who are just ahead of the curve, so

1302
01:14:54,920 --> 01:14:57,120
Speaker 2: we look at what they're listening to. Now, So what

1303
01:14:57,160 --> 01:14:59,439
Speaker 2: I meant by that was if you're really buzzy on

1304
01:14:59,479 --> 01:15:04,200
Speaker 2: social media, that might get people who are trendsetter listeners

1305
01:15:04,200 --> 01:15:07,719
Speaker 2: to listen to you. And that's the biggest contributing factor

1306
01:15:07,760 --> 01:15:10,880
Speaker 2: to whether you get on the Fresh Fines playlist.

1307
01:15:11,560 --> 01:15:14,960
Speaker 1: Can you give us an example of somebody who started

1308
01:15:15,040 --> 01:15:17,200
Speaker 1: on Fresh Fines and then kind of blew up?

1309
01:15:17,920 --> 01:15:22,400
Speaker 2: Oh that's a great question. I feel like almost every

1310
01:15:22,479 --> 01:15:26,240
Speaker 2: artist that has has broken over the last you know,

1311
01:15:26,360 --> 01:15:31,080
Speaker 2: ten years, has been that example. So yeah, I mean

1312
01:15:31,360 --> 01:15:33,200
Speaker 2: I think literally almost every name that you could come

1313
01:15:33,240 --> 01:15:33,439
Speaker 2: up with.

1314
01:15:33,479 --> 01:15:36,639
Speaker 1: Okay, well, let me use a specific example. Zach Brian

1315
01:15:36,720 --> 01:15:40,800
Speaker 1: put out his albums independently, then went to Warner Brothers. Yep,

1316
01:15:41,520 --> 01:15:43,960
Speaker 1: they get a hold of me, come to the will Turn.

1317
01:15:44,840 --> 01:15:48,240
Speaker 1: I was there every now that I play stadium, So

1318
01:15:48,320 --> 01:15:51,640
Speaker 1: this is at the beginning of the blow up. Everybody

1319
01:15:51,680 --> 01:15:55,600
Speaker 1: there knows every song the album had an X I

1320
01:15:55,600 --> 01:15:59,800
Speaker 1: think fourteen or eighteen tracks. Were you aware of the

1321
01:16:00,080 --> 01:16:05,040
Speaker 1: act that something was going on there? I don't.

1322
01:16:05,160 --> 01:16:08,920
Speaker 2: I don't know the Zach Bryan like on platform history

1323
01:16:08,960 --> 01:16:12,640
Speaker 2: off the top of my head. We tend to be, yeah,

1324
01:16:12,760 --> 01:16:15,080
Speaker 2: especially our editorial team tends to be very on top

1325
01:16:15,120 --> 01:16:16,799
Speaker 2: of that type of stuff, So I wouldn't be surprised,

1326
01:16:16,800 --> 01:16:18,599
Speaker 2: But I'm not sure what that specific example.

1327
01:16:18,600 --> 01:16:20,760
Speaker 1: Well, you know, Chapel Road had been in the marketplace

1328
01:16:20,880 --> 01:16:25,000
Speaker 1: for a while suddenly he's doing these live shows where

1329
01:16:25,080 --> 01:16:27,559
Speaker 1: I'm getting email. Hey, you know, there's a big reaction.

1330
01:16:27,680 --> 01:16:32,880
Speaker 1: Here's some videos cocomminentally, were you seeing this on Spotify? Yeah?

1331
01:16:33,040 --> 01:16:36,280
Speaker 2: And Chapel is a great example because I think a

1332
01:16:36,280 --> 01:16:38,640
Speaker 2: lot of people know her story now because of her

1333
01:16:38,680 --> 01:16:41,320
Speaker 2: Grammy win. But she had this up and down journey

1334
01:16:41,400 --> 01:16:43,160
Speaker 2: right where she she put out a couple songs, she

1335
01:16:43,200 --> 01:16:44,920
Speaker 2: was dropped by the label, she went back home, she

1336
01:16:45,040 --> 01:16:51,240
Speaker 2: researched even that first leg of the journey where she

1337
01:16:51,280 --> 01:16:53,639
Speaker 2: put out a couple songs and then was subsequently dropped.

1338
01:16:53,840 --> 01:16:57,799
Speaker 2: She was getting Spotify editorial support even at that phase.

1339
01:16:58,240 --> 01:17:01,960
Speaker 2: And you know, she's been an editorials playlist on Spotify

1340
01:17:02,040 --> 01:17:05,600
Speaker 2: I think continuously for the last seven years. So I

1341
01:17:05,600 --> 01:17:08,920
Speaker 2: think that's actually a great example of we tend to

1342
01:17:08,920 --> 01:17:13,480
Speaker 2: be yeah, ahead of the curve on those kind of things.

1343
01:17:14,040 --> 01:17:16,320
Speaker 1: How many people are an editorial.

1344
01:17:17,360 --> 01:17:21,040
Speaker 2: Globally, I think it's around one hundred and fifty two

1345
01:17:21,120 --> 01:17:22,160
Speaker 2: hundred something like that.

1346
01:17:22,720 --> 01:17:27,360
Speaker 1: Let's just talk domestically, it tens.

1347
01:17:27,720 --> 01:17:28,960
Speaker 2: I don't know the number off my head.

1348
01:17:30,120 --> 01:17:34,559
Speaker 1: Okay, So I have a new album or I'm a

1349
01:17:34,600 --> 01:17:40,200
Speaker 1: new artist, I go through the release phase. Now, Spotify

1350
01:17:40,280 --> 01:17:43,040
Speaker 1: for artists, What else will it give me? First of all,

1351
01:17:43,160 --> 01:17:46,360
Speaker 1: let's talk very specifically in terms of data. Yeah, what

1352
01:17:46,720 --> 01:17:48,080
Speaker 1: data will I get?

1353
01:17:49,479 --> 01:17:52,280
Speaker 2: If anything, we get the feedback that it's too much.

1354
01:17:53,320 --> 01:17:56,599
Speaker 2: But at a high level, you're looking at audience metrics.

1355
01:17:56,680 --> 01:18:02,960
Speaker 2: So how many light listeners, heavy listeners, fans do you

1356
01:18:03,040 --> 01:18:04,599
Speaker 2: have consuming your music?

1357
01:18:05,320 --> 01:18:07,479
Speaker 1: Well, just stop right there. How do you break those

1358
01:18:07,479 --> 01:18:08,360
Speaker 1: categories down?

1359
01:18:08,960 --> 01:18:14,479
Speaker 2: So light listener is like, you know, maybe I listened

1360
01:18:14,479 --> 01:18:17,280
Speaker 2: to today's top hits, right, and so Chapel Roone is

1361
01:18:17,320 --> 01:18:20,600
Speaker 2: on that. I'm a listener, but I've never searched for

1362
01:18:20,720 --> 01:18:23,360
Speaker 2: Chapel Roone. I've never put her in my playlist. So

1363
01:18:23,400 --> 01:18:25,840
Speaker 2: I would be a light listener, but I would not

1364
01:18:25,960 --> 01:18:28,920
Speaker 2: be a you know, high intent listener, if that makes sense.

1365
01:18:30,240 --> 01:18:31,920
Speaker 1: Okay, take me up the next two levels.

1366
01:18:32,720 --> 01:18:34,840
Speaker 2: So, yeah, we have a couple levels of fandom and intent,

1367
01:18:35,120 --> 01:18:36,840
Speaker 2: and part of what we try to do is show

1368
01:18:36,880 --> 01:18:40,000
Speaker 2: you how the different things that you can do can

1369
01:18:40,040 --> 01:18:43,120
Speaker 2: help to move audiences up. So maybe you want to

1370
01:18:43,120 --> 01:18:46,360
Speaker 2: target the people that have only heard you on playlists

1371
01:18:46,880 --> 01:18:49,559
Speaker 2: and have a goal of your campaign to be to

1372
01:18:49,600 --> 01:18:51,559
Speaker 2: have them, you know, save you and listen to you

1373
01:18:51,680 --> 01:18:54,000
Speaker 2: in their library instead. So that's like one level of

1374
01:18:54,080 --> 01:18:55,800
Speaker 2: data that we give you in Spotify for artists is

1375
01:18:55,840 --> 01:18:59,280
Speaker 2: the intent level of the audience, and you can see

1376
01:19:00,120 --> 01:19:02,720
Speaker 2: both total size of the audience, the intent level, the

1377
01:19:02,760 --> 01:19:08,880
Speaker 2: geographic breakdown, the demographic breakdown, all that kind of stuff.

1378
01:19:09,320 --> 01:19:15,120
Speaker 2: Then you also get data on each individual track, So

1379
01:19:15,680 --> 01:19:17,920
Speaker 2: what playlist is it getting added to? You can see

1380
01:19:17,920 --> 01:19:21,120
Speaker 2: Spotify playlists, you can see user playlists, what kind of

1381
01:19:21,160 --> 01:19:23,400
Speaker 2: pickup is it getting, what kind of performance is that

1382
01:19:23,439 --> 01:19:26,000
Speaker 2: track getting, and you can compare that to like, how

1383
01:19:26,080 --> 01:19:29,719
Speaker 2: is this signal single doing compared to my last one,

1384
01:19:30,080 --> 01:19:32,080
Speaker 2: to get a sense for how it's coming out of

1385
01:19:32,120 --> 01:19:37,280
Speaker 2: the gate. Probably the most popular data feature is on

1386
01:19:37,600 --> 01:19:41,479
Speaker 2: release day. We have a live listener account, so you

1387
01:19:41,560 --> 01:19:43,759
Speaker 2: come in and its release day and you can see

1388
01:19:44,080 --> 01:19:47,040
Speaker 2: there's like a little heartbeat that's showing, you know, twenty

1389
01:19:47,080 --> 01:19:49,960
Speaker 2: four nine and sixty four people are listening to this

1390
01:19:50,760 --> 01:19:54,040
Speaker 2: you know artist right now. And you know, people have

1391
01:19:54,120 --> 01:19:56,080
Speaker 2: fun on release day having their phone out and just

1392
01:19:56,120 --> 01:19:58,240
Speaker 2: seeing the number climb and climb and climb, and their

1393
01:19:58,280 --> 01:20:00,000
Speaker 2: baby is born and they get to see the world

1394
01:20:00,160 --> 01:20:04,479
Speaker 2: kind of listening to it in real time. Yeah, So

1395
01:20:04,880 --> 01:20:08,000
Speaker 2: those are you know, some of the bigger categories of data.

1396
01:20:09,160 --> 01:20:11,599
Speaker 1: The heartbeat is how many people have listened in that day,

1397
01:20:11,680 --> 01:20:14,240
Speaker 1: or how many listen simultaneous.

1398
01:20:13,760 --> 01:20:17,360
Speaker 2: Second like this right now the audio is coming out

1399
01:20:17,360 --> 01:20:19,479
Speaker 2: of their speaker. How many people listening right now to

1400
01:20:19,520 --> 01:20:20,000
Speaker 2: this track?

1401
01:20:21,320 --> 01:20:25,720
Speaker 1: Okay, if I'm an artist, can I do that any day? No?

1402
01:20:26,000 --> 01:20:29,120
Speaker 2: I think it was for like computational load or something.

1403
01:20:29,120 --> 01:20:31,240
Speaker 2: We had to limit it to the first release week.

1404
01:20:31,320 --> 01:20:33,240
Speaker 2: I think it is, and then you know, so you

1405
01:20:33,320 --> 01:20:37,840
Speaker 2: get that like concurrent right now metric for anything that's

1406
01:20:37,880 --> 01:20:40,360
Speaker 2: released in the last seven days, but not every track

1407
01:20:40,439 --> 01:20:42,800
Speaker 2: in perpetuity.

1408
01:20:49,560 --> 01:20:54,320
Speaker 1: Okay, so my track has some traction. People have listened

1409
01:20:54,360 --> 01:20:58,600
Speaker 1: to it on playlists. What can I do as an

1410
01:20:58,720 --> 01:21:01,240
Speaker 1: artist to get higher consumption?

1411
01:21:03,160 --> 01:21:08,960
Speaker 2: Well, you know, to drive consumption on Spotify. A lot

1412
01:21:09,000 --> 01:21:12,800
Speaker 2: of the Spotify for Artist tools are kind of purposely

1413
01:21:12,960 --> 01:21:18,640
Speaker 2: designed for that. So, whether it's Discovery mode for more

1414
01:21:18,760 --> 01:21:21,920
Speaker 2: lean back or the native ads for more high intent

1415
01:21:22,280 --> 01:21:26,639
Speaker 2: driving listening, those are great, you know, places to start.

1416
01:21:27,439 --> 01:21:31,160
Speaker 2: If I think more broadly outside of you know, just

1417
01:21:31,240 --> 01:21:33,120
Speaker 2: kind of our first party tools, a lot of what

1418
01:21:33,160 --> 01:21:39,000
Speaker 2: we see people having success with are collaborations, so that

1419
01:21:39,080 --> 01:21:41,960
Speaker 2: you can kind of share across people's different fan base

1420
01:21:42,000 --> 01:21:45,000
Speaker 2: and that tends to work really well. We don't have

1421
01:21:45,040 --> 01:21:46,920
Speaker 2: a tool for that. It's just a lot of times

1422
01:21:46,920 --> 01:21:49,000
Speaker 2: what people do when they're starting to get momentum is

1423
01:21:49,040 --> 01:21:52,560
Speaker 2: you know, start that chain of collabse to sustain.

1424
01:21:53,920 --> 01:21:56,759
Speaker 1: We covered it, but just go back. Yeah. Native ads

1425
01:21:57,040 --> 01:22:03,080
Speaker 1: would be paying to put information in front of the listener,

1426
01:22:03,880 --> 01:22:07,800
Speaker 1: and it might be tour dates, merch whatever.

1427
01:22:07,720 --> 01:22:13,320
Speaker 2: It's it's for music primarily, So it's you can open

1428
01:22:13,360 --> 01:22:17,360
Speaker 2: the app and on the homepage you might see, you know,

1429
01:22:17,520 --> 01:22:20,960
Speaker 2: new release from this artist that you have some knowledge of,

1430
01:22:21,400 --> 01:22:23,960
Speaker 2: and that's a placement that they've said, I want to

1431
01:22:24,000 --> 01:22:27,680
Speaker 2: pay for a certain amount of clicks on that announcement,

1432
01:22:27,960 --> 01:22:29,559
Speaker 2: and then we try to route it to the most

1433
01:22:29,600 --> 01:22:33,080
Speaker 2: relevant listeners of that you know, who'd be interested in

1434
01:22:33,080 --> 01:22:33,479
Speaker 2: that promotion.

1435
01:22:33,560 --> 01:22:34,719
Speaker 1: How much might that cost?

1436
01:22:37,400 --> 01:22:39,479
Speaker 2: So it's it's a cost per click model. It's similar

1437
01:22:39,560 --> 01:22:42,200
Speaker 2: to like buying native ads on Facebook or Google. It's

1438
01:22:42,240 --> 01:22:43,120
Speaker 2: in the same ilk.

1439
01:22:44,760 --> 01:22:49,760
Speaker 1: As far as putting information tour dates in merch Do

1440
01:22:49,880 --> 01:22:50,960
Speaker 1: I have to pay for that.

1441
01:22:51,240 --> 01:22:56,839
Speaker 2: Free to do so? We aggregate as many concert listings

1442
01:22:56,840 --> 01:22:59,479
Speaker 2: as possible through all of our partnerships. We partner with everybody.

1443
01:22:59,479 --> 01:23:03,960
Speaker 2: We want every possible toward a listed on Spotify, and

1444
01:23:04,000 --> 01:23:07,160
Speaker 2: then we partner primarily with Shopify. On the merch side,

1445
01:23:07,479 --> 01:23:11,320
Speaker 2: the industry has increasingly, you know, gotten onto Shopify as

1446
01:23:11,360 --> 01:23:13,799
Speaker 2: the main place to do listings, and all that stuff

1447
01:23:13,840 --> 01:23:18,640
Speaker 2: is listed on people's artist page for free. There's no

1448
01:23:18,720 --> 01:23:22,520
Speaker 2: additional fee for you know, having that on Spotify.

1449
01:23:23,800 --> 01:23:25,960
Speaker 1: And is Spotify going to take a cut?

1450
01:23:26,920 --> 01:23:31,160
Speaker 2: We have like a pretty standard on the concert side,

1451
01:23:31,200 --> 01:23:35,679
Speaker 2: like the affiliate you know percentage if you click through

1452
01:23:35,720 --> 01:23:38,799
Speaker 2: the link and you and you buy in that session,

1453
01:23:39,439 --> 01:23:44,640
Speaker 2: we get an affiliate revenue for that. It's not a substantial,

1454
01:23:44,960 --> 01:23:47,519
Speaker 2: you know, amount of money for for Spotify. We we

1455
01:23:47,600 --> 01:23:51,160
Speaker 2: mostly do it because it's super important to artists, is

1456
01:23:51,200 --> 01:23:53,439
Speaker 2: their most important revenue stream and something that you know,

1457
01:23:53,560 --> 01:23:57,400
Speaker 2: fans find really interesting. But yeah, that affiliate model exists

1458
01:23:57,439 --> 01:24:01,760
Speaker 2: in the background. And what about merch, I don't think

1459
01:24:01,760 --> 01:24:05,000
Speaker 2: there's any I know, there had been some affiliate conversations

1460
01:24:05,000 --> 01:24:06,479
Speaker 2: in the past. I don't think there's any cut that

1461
01:24:06,520 --> 01:24:07,640
Speaker 2: goes back to Spotify and that.

1462
01:24:08,280 --> 01:24:10,000
Speaker 1: To what degree do these work?

1463
01:24:13,640 --> 01:24:19,080
Speaker 2: Yeah, I mean concerts has become a huge use case,

1464
01:24:19,280 --> 01:24:24,120
Speaker 2: so tens of millions of people buying concert tickets through Spotify,

1465
01:24:24,880 --> 01:24:28,679
Speaker 2: hundreds of millions of dollars in concert sales driven through Spotify.

1466
01:24:28,680 --> 01:24:30,679
Speaker 2: So yeah, it's become substantial for sure.

1467
01:24:31,680 --> 01:24:35,760
Speaker 1: Okay, So going back to my dashboard, I can get

1468
01:24:35,760 --> 01:24:39,840
Speaker 1: simultaneous listeners with the heartbeat yep. I can get to

1469
01:24:39,920 --> 01:24:44,280
Speaker 1: what degree are people, you know, casual listeners more active listeners.

1470
01:24:44,600 --> 01:24:48,519
Speaker 1: I can get regional data any other vertical that we

1471
01:24:48,560 --> 01:24:49,240
Speaker 1: haven't covered.

1472
01:24:49,600 --> 01:24:51,439
Speaker 2: When you say vertical, what do you mean by that,

1473
01:24:51,479 --> 01:24:59,840
Speaker 2: any other area of information? Yeah, I think you co

1474
01:25:00,040 --> 01:25:00,599
Speaker 2: for most of them.

1475
01:25:01,680 --> 01:25:07,680
Speaker 1: Okay, to what degree is the demographic and regional information

1476
01:25:08,600 --> 01:25:09,280
Speaker 1: broken down?

1477
01:25:11,400 --> 01:25:14,439
Speaker 2: Yeah, So I think that it's been helpful because it

1478
01:25:14,439 --> 01:25:17,960
Speaker 2: gives you things like age and gender, so you can

1479
01:25:18,000 --> 01:25:21,080
Speaker 2: have an idea of kind of the segments that you're

1480
01:25:21,080 --> 01:25:25,320
Speaker 2: appealing to. And then from a geo perspective, it's pretty

1481
01:25:25,320 --> 01:25:29,280
Speaker 2: cool because sometimes things happen, you know, in regions that

1482
01:25:29,280 --> 01:25:32,240
Speaker 2: people wouldn't expect for reasons they don't even fully understand.

1483
01:25:32,240 --> 01:25:34,320
Speaker 2: But knowing like oh maybe I could do a Latin

1484
01:25:34,360 --> 01:25:36,760
Speaker 2: American tour, I didn't realize, like, you know, is this

1485
01:25:36,840 --> 01:25:39,400
Speaker 2: big and that part of the world. So I think

1486
01:25:39,640 --> 01:25:43,799
Speaker 2: the fact that we have country level, city level listener

1487
01:25:43,920 --> 01:25:48,800
Speaker 2: data stream data can be directly helpful for routing strategies.

1488
01:25:49,760 --> 01:25:52,880
Speaker 1: And to what degree is a broken down demographically.

1489
01:25:54,439 --> 01:25:58,360
Speaker 2: Age and gender is the main way And to.

1490
01:25:58,400 --> 01:26:02,880
Speaker 1: What degree in your tenure Spotify have you seen domestic

1491
01:26:03,080 --> 01:26:07,400
Speaker 1: us product spread around the world and what walls do

1492
01:26:07,479 --> 01:26:07,840
Speaker 1: you hit?

1493
01:26:11,160 --> 01:26:14,320
Speaker 2: Yeah, I mean export in every direction is increasing. Things

1494
01:26:14,320 --> 01:26:17,080
Speaker 2: are just getting less confined to their domestic market. I

1495
01:26:17,080 --> 01:26:20,680
Speaker 2: mean even country that people think of is maybe a

1496
01:26:20,760 --> 01:26:25,720
Speaker 2: more I don't know, Waldoff Country is bigger in the

1497
01:26:25,800 --> 01:26:31,479
Speaker 2: UK than it's ever been. But yeah, like I said before,

1498
01:26:31,560 --> 01:26:33,240
Speaker 2: you know, the majority of artists seeing the majority of

1499
01:26:33,240 --> 01:26:37,200
Speaker 2: their revenues from outside of their home country. And not

1500
01:26:37,240 --> 01:26:42,719
Speaker 2: only that, but in terms of at an artist level,

1501
01:26:43,760 --> 01:26:46,040
Speaker 2: artists that are making hundreds of thousands of dollars, so

1502
01:26:46,160 --> 01:26:49,000
Speaker 2: artists that are generating more than one hundred thousand dollars

1503
01:26:49,080 --> 01:26:53,880
Speaker 2: in royalties from Spotify. Those artists last year recorded in

1504
01:26:53,920 --> 01:27:00,000
Speaker 2: over fifty languages. So the amount of diversity of artists

1505
01:27:00,200 --> 01:27:02,120
Speaker 2: recording in all different languages around the world that are

1506
01:27:02,120 --> 01:27:05,400
Speaker 2: actually having you know, very substantial audiences and payouts on

1507
01:27:05,439 --> 01:27:08,479
Speaker 2: Spotify is way more diverse than it's ever been. I

1508
01:27:08,479 --> 01:27:10,720
Speaker 2: think those numbers are up, you know, five ten x

1509
01:27:10,760 --> 01:27:12,320
Speaker 2: over the last ten years.

1510
01:27:12,320 --> 01:27:17,559
Speaker 1: So how big is Latin in the US market? Massive?

1511
01:27:18,560 --> 01:27:20,759
Speaker 2: I don't have a number for you, but it's it's huge.

1512
01:27:21,120 --> 01:27:25,560
Speaker 1: Well, well, let's talk different genres. Yeah, there's Latin, there's country,

1513
01:27:25,880 --> 01:27:29,200
Speaker 1: there's jazz and classical, but they've historically been to minimus.

1514
01:27:29,680 --> 01:27:34,200
Speaker 1: There's rock, there's hip hop. These genres, what have you seen?

1515
01:27:34,320 --> 01:27:36,000
Speaker 1: What's going up? What's going down?

1516
01:27:37,320 --> 01:27:39,880
Speaker 2: I think the interesting thing about rock is it's becoming

1517
01:27:39,880 --> 01:27:42,400
Speaker 2: a lot less monolithic and a lot more cut up.

1518
01:27:42,720 --> 01:27:48,720
Speaker 2: You know, indie, shoegaze, you know, all these different micro genres.

1519
01:27:49,000 --> 01:27:52,400
Speaker 2: I think somewhat in the same story with rap drill music,

1520
01:27:52,439 --> 01:27:58,679
Speaker 2: and I mean maybe this is really a cross genres trend,

1521
01:27:58,800 --> 01:28:02,200
Speaker 2: not so much in country, but just the smaller scenes

1522
01:28:02,240 --> 01:28:04,800
Speaker 2: that are having their own moments and their own communities

1523
01:28:04,840 --> 01:28:06,679
Speaker 2: that do things a different way.

1524
01:28:07,000 --> 01:28:12,599
Speaker 1: So, but can you give us an overall trend. I mean,

1525
01:28:12,600 --> 01:28:14,640
Speaker 1: it used to be a rock world. Then there was

1526
01:28:14,680 --> 01:28:17,920
Speaker 1: a hip hop world. You hear people, you know, prior

1527
01:28:17,960 --> 01:28:20,599
Speaker 1: to this Kendrick Drake thing. You hear people saying, oh,

1528
01:28:20,640 --> 01:28:23,839
Speaker 1: it's not as innovative. Then you have questlove the Kendrick

1529
01:28:23,920 --> 01:28:27,840
Speaker 1: Drake saying oh it's the end of hip hop. Are

1530
01:28:27,880 --> 01:28:32,160
Speaker 1: you seeing anything going up and down? I mean, there's

1531
01:28:32,200 --> 01:28:35,800
Speaker 1: gotta be some movement up and down with all these genres. Yeah.

1532
01:28:35,840 --> 01:28:39,520
Speaker 2: I think in terms of things that are ascendant, certainly

1533
01:28:40,680 --> 01:28:44,519
Speaker 2: K pop, Latin, more recently afropop, these things have been

1534
01:28:44,640 --> 01:28:49,559
Speaker 2: rising a lot, kind of at the expense of everything else.

1535
01:28:50,960 --> 01:28:55,639
Speaker 2: I don't think there's been one big loser to stand out,

1536
01:28:55,720 --> 01:28:57,920
Speaker 2: but as those things grow, they kind of eat into

1537
01:28:57,960 --> 01:28:59,320
Speaker 2: the averages of everything else.

1538
01:29:00,320 --> 01:29:04,160
Speaker 1: And let's use K pop as an example that tends

1539
01:29:04,200 --> 01:29:07,000
Speaker 1: to have a wall Yeah, people who were really into

1540
01:29:07,040 --> 01:29:10,040
Speaker 1: it and then people couldn't give a shit. Do you

1541
01:29:10,200 --> 01:29:13,599
Speaker 1: think that K pop and latin are going to start

1542
01:29:13,640 --> 01:29:17,960
Speaker 1: permeating people who traditionally would not be fans for this music.

1543
01:29:18,200 --> 01:29:20,360
Speaker 2: I think so. I mean, you know, I think one

1544
01:29:20,360 --> 01:29:22,960
Speaker 2: of the things that the editorial team that Spotify is

1545
01:29:23,000 --> 01:29:27,719
Speaker 2: really proud of, justifiably is they started programming kate pop

1546
01:29:28,200 --> 01:29:30,559
Speaker 2: when it was really walled off and people didn't know

1547
01:29:30,640 --> 01:29:33,280
Speaker 2: exactly what to make of it. But I don't think

1548
01:29:33,320 --> 01:29:35,400
Speaker 2: it is wald off anymore. I think you see stuff

1549
01:29:35,439 --> 01:29:39,640
Speaker 2: you know, seventeen and bts and that this stuff resonates

1550
01:29:39,800 --> 01:29:42,640
Speaker 2: and can chart and do well in the US, like

1551
01:29:42,680 --> 01:29:46,000
Speaker 2: other genres can because I think it takes some time

1552
01:29:46,040 --> 01:29:48,760
Speaker 2: for people to get you know, comfort and familiarity. In

1553
01:29:49,040 --> 01:29:51,519
Speaker 2: the US, maybe around something, but yeah, I think the

1554
01:29:51,560 --> 01:29:53,840
Speaker 2: stuff crosses over and I think that you know, that's

1555
01:29:54,160 --> 01:29:57,120
Speaker 2: that's absolutely true of Latin music. Latin music is massive

1556
01:29:57,160 --> 01:29:59,759
Speaker 2: in every corner of the of the world for sure.

1557
01:30:00,360 --> 01:30:02,720
Speaker 1: Going back to the days of MTV, which is not

1558
01:30:02,800 --> 01:30:08,080
Speaker 1: a perfect analogy, yeah, they would literally have changes. They

1559
01:30:08,120 --> 01:30:10,679
Speaker 1: would say, oh, we're not going to program any more

1560
01:30:10,720 --> 01:30:15,599
Speaker 1: hard rock, We're going to program this. Do you guys say, well,

1561
01:30:15,600 --> 01:30:18,240
Speaker 1: you know, we got to vibe on K pop. Let's

1562
01:30:18,280 --> 01:30:22,559
Speaker 1: push it out to the listeners more. Yeah.

1563
01:30:22,600 --> 01:30:25,599
Speaker 2: I think one of the things that the editorial team

1564
01:30:25,760 --> 01:30:31,320
Speaker 2: tries to focus on, or maybe the things that the

1565
01:30:31,439 --> 01:30:34,720
Speaker 2: algorithm isn't automatically going to pick up, right, Like, the

1566
01:30:34,760 --> 01:30:37,520
Speaker 2: algorithm is good at picking up things that are trending

1567
01:30:37,960 --> 01:30:40,880
Speaker 2: in the numbers, but in terms of things that are

1568
01:30:40,920 --> 01:30:44,760
Speaker 2: picking up speed in the amount that you know, it

1569
01:30:44,840 --> 01:30:49,080
Speaker 2: has a cultural attention or zeitgeist or how much people care,

1570
01:30:50,320 --> 01:30:53,519
Speaker 2: what's interesting, what's got people talking. I think the editorial team,

1571
01:30:53,640 --> 01:30:57,000
Speaker 2: you know, that's where humans shine. The whole system that

1572
01:30:57,040 --> 01:30:59,200
Speaker 2: we've made is tried to be the best combination of

1573
01:30:59,720 --> 01:31:02,400
Speaker 2: man and machine, kind of working in harmony. And that's

1574
01:31:02,439 --> 01:31:04,160
Speaker 2: the piece that I think humans do really well.

1575
01:31:05,360 --> 01:31:08,760
Speaker 1: Let's go back to the dashboard. Yeah, we have the

1576
01:31:08,800 --> 01:31:14,360
Speaker 1: act that's brand new. We have the superstar. Let's assume

1577
01:31:14,520 --> 01:31:17,840
Speaker 1: I'm more of a journey person. I'm putting out my

1578
01:31:17,960 --> 01:31:22,599
Speaker 1: third or fourth album. Yeah, is it just identical. Well,

1579
01:31:22,640 --> 01:31:26,160
Speaker 1: we have the pregame, we have this or that, or

1580
01:31:26,240 --> 01:31:29,280
Speaker 1: once I'm in the game, are is there more information?

1581
01:31:29,400 --> 01:31:31,880
Speaker 1: Are there more tools that you can help me to grow?

1582
01:31:33,320 --> 01:31:38,800
Speaker 2: Certainly, I think that all the tools I don't know.

1583
01:31:38,840 --> 01:31:42,040
Speaker 2: I I think that most of the tools that we

1584
01:31:42,120 --> 01:31:47,080
Speaker 2: have really shine in the in the kind of middle state.

1585
01:31:47,800 --> 01:31:52,400
Speaker 2: If you're a superstar and you're super saturated, certainly our

1586
01:31:52,439 --> 01:31:55,720
Speaker 2: tools are valuable, but they're going to provide less lift overall,

1587
01:31:56,760 --> 01:31:58,679
Speaker 2: you know, because you're already out there so many people

1588
01:31:58,760 --> 01:32:00,720
Speaker 2: know you, maybe people have made up their mind about you.

1589
01:32:00,920 --> 01:32:03,360
Speaker 2: And if you're brand new and we hardly know about you,

1590
01:32:03,479 --> 01:32:05,559
Speaker 2: it's hard for the tools to do their job. Where

1591
01:32:05,560 --> 01:32:08,240
Speaker 2: they really shine is in the middle where you're not

1592
01:32:08,320 --> 01:32:11,600
Speaker 2: overexposed yet we know a little about where you're resonating

1593
01:32:11,640 --> 01:32:14,320
Speaker 2: and can maybe try to help help you, you know,

1594
01:32:14,439 --> 01:32:17,600
Speaker 2: do more. The tools tend to I mean, they're the

1595
01:32:17,640 --> 01:32:20,080
Speaker 2: same if it's your second album or your fourth album.

1596
01:32:20,240 --> 01:32:24,479
Speaker 2: But what's hopefully changed is you know your audience that

1597
01:32:24,520 --> 01:32:26,679
Speaker 2: you can tap it. The people who have been there

1598
01:32:26,720 --> 01:32:28,720
Speaker 2: for you and your first album, your second album or

1599
01:32:28,720 --> 01:32:30,519
Speaker 2: third album. Now those people are there for you to

1600
01:32:30,560 --> 01:32:33,439
Speaker 2: target and try to resurrect and be on the next

1601
01:32:33,479 --> 01:32:34,320
Speaker 2: part of the journey with you.

1602
01:32:35,200 --> 01:32:39,600
Speaker 1: I know it's not your purview exactly, but the editorial

1603
01:32:39,640 --> 01:32:44,960
Speaker 1: they're human beings and people would certainly believe someone with

1604
01:32:45,000 --> 01:32:49,080
Speaker 1: an ongoing relationship with an editorial person is going to

1605
01:32:49,120 --> 01:32:51,120
Speaker 1: get their music in playlist.

1606
01:32:52,000 --> 01:32:53,360
Speaker 2: Can you say more and what you mean by that?

1607
01:32:55,280 --> 01:33:00,840
Speaker 1: Okay, Hey, this is traditional with distribution. I have a

1608
01:33:00,840 --> 01:33:03,559
Speaker 1: steady stream of product. If you have a steady stream

1609
01:33:03,600 --> 01:33:05,439
Speaker 1: of product, there's more of a reason to have an

1610
01:33:05,520 --> 01:33:10,000
Speaker 1: ongoing relationship with someone. I have a steady stream of product,

1611
01:33:10,800 --> 01:33:14,960
Speaker 1: a certain amount has been successful. I find out who

1612
01:33:15,040 --> 01:33:19,639
Speaker 1: is the programmer in my genre. Okay, I take him

1613
01:33:19,640 --> 01:33:24,120
Speaker 1: to dinner, I send him some music, I send him

1614
01:33:24,120 --> 01:33:27,880
Speaker 1: a birthday card, ask him about his wife, and then

1615
01:33:27,920 --> 01:33:34,360
Speaker 1: I say I have a new release. Wouldn't you know

1616
01:33:35,120 --> 01:33:38,759
Speaker 1: just on a human level, people would say that person

1617
01:33:38,800 --> 01:33:42,080
Speaker 1: would tend to play that record or play list that record.

1618
01:33:43,000 --> 01:33:47,360
Speaker 2: I see what you're getting at. I think, first of all,

1619
01:33:47,360 --> 01:33:50,479
Speaker 2: I want to be clear, there's a very rigorous code

1620
01:33:50,520 --> 01:33:52,960
Speaker 2: of conduct. You mentioned a birthday gift. I think at

1621
01:33:53,000 --> 01:33:58,240
Speaker 2: some point in that sequence gifts favors not allowed fireable

1622
01:33:58,280 --> 01:34:02,000
Speaker 2: offenses at Spotify. So we take it super seriously. Anything

1623
01:34:02,040 --> 01:34:06,120
Speaker 2: that edges on you know, bribery, this stuff we take

1624
01:34:06,160 --> 01:34:10,439
Speaker 2: super seriously. But the broader point you're making about like, Okay,

1625
01:34:10,520 --> 01:34:15,759
Speaker 2: this is an established manager. They've successfully recognized ten acts,

1626
01:34:16,280 --> 01:34:18,400
Speaker 2: and they say this next one is just like their

1627
01:34:18,400 --> 01:34:20,040
Speaker 2: first ten, and this next one is going to be

1628
01:34:20,080 --> 01:34:23,799
Speaker 2: really good. That's a signal for sure. I don't actually

1629
01:34:23,800 --> 01:34:25,760
Speaker 2: think it even matters whether you get the phone call

1630
01:34:25,800 --> 01:34:28,600
Speaker 2: from someone, if you just look up online. This is

1631
01:34:28,680 --> 01:34:31,360
Speaker 2: the team they have around them. I think it's good

1632
01:34:31,360 --> 01:34:34,000
Speaker 2: for the editorial team to notice that and take that

1633
01:34:34,040 --> 01:34:37,120
Speaker 2: into account. It's like, oh, okay, well that's part of

1634
01:34:37,720 --> 01:34:40,680
Speaker 2: the full story that I'm seeing around this artist. These

1635
01:34:40,720 --> 01:34:42,560
Speaker 2: people think they're going to be great, They're going to

1636
01:34:42,640 --> 01:34:46,000
Speaker 2: have the you know, creative support of those people. I

1637
01:34:46,080 --> 01:34:49,080
Speaker 2: think that's legitimate as a signal, you know, and you

1638
01:34:49,080 --> 01:34:52,200
Speaker 2: can never take out all bias from a system. I

1639
01:34:52,240 --> 01:34:55,000
Speaker 2: think we've done a really good job of trying to

1640
01:34:55,000 --> 01:34:57,720
Speaker 2: mitigate it every possible place we can and have a

1641
01:34:57,840 --> 01:35:02,040
Speaker 2: level playing field. But I take your point that it's

1642
01:35:02,080 --> 01:35:05,720
Speaker 2: never a perfectly flat playing field. At the end of

1643
01:35:05,800 --> 01:35:09,280
Speaker 2: the day, the thing that matters the most is the

1644
01:35:09,400 --> 01:35:13,719
Speaker 2: music comes out. And if you try it in new boots,

1645
01:35:13,720 --> 01:35:16,559
Speaker 2: which is like the feeder playlist to hot country, and

1646
01:35:16,600 --> 01:35:21,720
Speaker 2: it's not performing, if it's been there for four days

1647
01:35:21,760 --> 01:35:24,080
Speaker 2: and it's not performing, all that other stuff that you

1648
01:35:24,120 --> 01:35:27,080
Speaker 2: took into account, it doesn't really matter anymore. The fans

1649
01:35:27,120 --> 01:35:30,479
Speaker 2: have decided now, right so you can't keep you know,

1650
01:35:30,640 --> 01:35:37,280
Speaker 2: forcing it. And so I think that's the biggest difference

1651
01:35:37,320 --> 01:35:40,040
Speaker 2: between the terrestrial radio era and this era that we're

1652
01:35:40,040 --> 01:35:44,360
Speaker 2: in right now, is the fans give you signal very quickly,

1653
01:35:44,439 --> 01:35:47,080
Speaker 2: and they walk with their feet and you know, they decide.

1654
01:35:47,120 --> 01:35:50,080
Speaker 2: So that's the ultimate remover of bias.

1655
01:35:50,880 --> 01:35:53,040
Speaker 1: Tell me more about the code of ethics.

1656
01:35:54,200 --> 01:35:58,320
Speaker 2: You know, when you take the job, you agree to

1657
01:35:59,840 --> 01:36:01,840
Speaker 2: not going to do any of these things, and if

1658
01:36:01,840 --> 01:36:03,720
Speaker 2: I do them, I know that means I lose my job.

1659
01:36:03,840 --> 01:36:05,439
Speaker 1: So they're all, oh, yeah, yeah, what are some of

1660
01:36:05,439 --> 01:36:08,760
Speaker 1: those things? If I take you to dinner, that's not

1661
01:36:08,800 --> 01:36:10,160
Speaker 1: a code of ethics violation.

1662
01:36:11,600 --> 01:36:13,760
Speaker 2: I think it is. I'll look up. I mean, I

1663
01:36:13,880 --> 01:36:16,800
Speaker 2: I think we make sure we were splitting the bill

1664
01:36:16,880 --> 01:36:17,800
Speaker 2: or we're taking people out.

1665
01:36:18,040 --> 01:36:19,200
Speaker 1: You know, that's important.

1666
01:36:19,320 --> 01:36:21,000
Speaker 2: Yeah, we don't want to do that, so.

1667
01:36:22,400 --> 01:36:24,439
Speaker 1: I give you a ticket to the show. Is that

1668
01:36:24,479 --> 01:36:26,200
Speaker 1: a code of ethics violation?

1669
01:36:27,760 --> 01:36:30,240
Speaker 2: Well, now you're gonna quiz me on all the things.

1670
01:36:30,560 --> 01:36:32,680
Speaker 2: Let me let me you know, like go back.

1671
01:36:32,680 --> 01:36:35,479
Speaker 1: Hey, if you can't remember, that's okay. But you know,

1672
01:36:35,560 --> 01:36:38,000
Speaker 1: it's like if you look for work for a major newspaper,

1673
01:36:38,840 --> 01:36:43,120
Speaker 1: they paid for their tickets. Is it that strict at Spotify?

1674
01:36:43,720 --> 01:36:46,519
Speaker 2: I know it is very strict. I like, you know,

1675
01:36:46,720 --> 01:36:50,599
Speaker 2: I don't remember the exact details of this concert ticket

1676
01:36:50,600 --> 01:36:52,680
Speaker 2: thing or whatever. I mean some of the you know,

1677
01:36:52,760 --> 01:36:54,640
Speaker 2: we we want our people to go to shows, right,

1678
01:36:54,640 --> 01:36:56,800
Speaker 2: We want them to see the acts live, to contribute,

1679
01:36:56,840 --> 01:36:58,960
Speaker 2: but like, yeah, we don't want it to be through

1680
01:36:58,960 --> 01:37:01,640
Speaker 2: a favor. We want them to go, you know, on

1681
01:37:01,680 --> 01:37:04,479
Speaker 2: Spotify's dime. These are things that are important, and like

1682
01:37:04,479 --> 01:37:08,320
Speaker 2: I said, i'm the details, I'm I'll look into. But

1683
01:37:08,479 --> 01:37:10,760
Speaker 2: I know that this has been a big point of

1684
01:37:10,800 --> 01:37:16,800
Speaker 2: emphasis and something that isn't just theoretical. It's affected, you know, employment,

1685
01:37:16,840 --> 01:37:17,960
Speaker 2: and we take super seriously.

1686
01:37:18,960 --> 01:37:21,960
Speaker 1: Okay, a complaint that I get, and you know, you

1687
01:37:22,000 --> 01:37:23,639
Speaker 1: and me are in the same world. There are people

1688
01:37:23,760 --> 01:37:27,679
Speaker 1: going to complain. People say, oh, I had my track

1689
01:37:27,760 --> 01:37:30,760
Speaker 1: on Spotify, I had my alm on Spotify. Yeah, and

1690
01:37:30,800 --> 01:37:33,920
Speaker 1: they took it down because they thought it was spam.

1691
01:37:33,960 --> 01:37:36,320
Speaker 1: And I put in this money for this and that

1692
01:37:36,840 --> 01:37:39,439
Speaker 1: literally got that email yesterday. What would you say to

1693
01:37:39,520 --> 01:37:40,080
Speaker 1: that person.

1694
01:37:41,080 --> 01:37:44,599
Speaker 2: I feel so bad for artists who are in this situation.

1695
01:37:44,920 --> 01:37:46,799
Speaker 2: And the reason I feel bad for them is because

1696
01:37:46,840 --> 01:37:51,080
Speaker 2: if you look at these marketing sites, they are so predatory.

1697
01:37:51,640 --> 01:37:56,120
Speaker 2: Like these marketing sites, they're like, you know, put in

1698
01:37:56,160 --> 01:37:59,959
Speaker 2: one hundred dollars and we'll get you ten thousand totally

1699
01:38:00,200 --> 01:38:06,400
Speaker 2: organic bot free streams, which is obviously total bs. There's

1700
01:38:06,439 --> 01:38:08,479
Speaker 2: no such thing as that. But if you fall for

1701
01:38:08,560 --> 01:38:11,120
Speaker 2: that scam and you pay one hundred dollars and you

1702
01:38:11,200 --> 01:38:13,360
Speaker 2: genuinely think, oh, they said it's bop free. I'm doing

1703
01:38:13,360 --> 01:38:15,480
Speaker 2: this all on the up and up, this is great,

1704
01:38:15,840 --> 01:38:17,639
Speaker 2: you know. The truth is is that then they're getting

1705
01:38:17,680 --> 01:38:21,200
Speaker 2: a bunch of bots to stream your song, and we

1706
01:38:21,280 --> 01:38:26,599
Speaker 2: take that extremely seriously. We catch it very accurately. We

1707
01:38:26,640 --> 01:38:30,439
Speaker 2: immediately remove all royalties paid out so we don't pay

1708
01:38:30,439 --> 01:38:33,599
Speaker 2: for fraudulent streams. We remove the play counts, we remove

1709
01:38:33,600 --> 01:38:38,320
Speaker 2: the monthly listener accounts, and we send notifications to the distributor,

1710
01:38:38,400 --> 01:38:41,840
Speaker 2: so we say, hey, distributor, this thing is getting bodied.

1711
01:38:42,560 --> 01:38:46,559
Speaker 2: And then if it's getting bodied really bad, we charge

1712
01:38:46,600 --> 01:38:49,320
Speaker 2: the distributor a fee because we want to incentivize them

1713
01:38:49,400 --> 01:38:51,960
Speaker 2: to say, don't keep letting this person do that. You

1714
01:38:52,040 --> 01:38:54,559
Speaker 2: need to maybe charge them a fee, Maybe you need

1715
01:38:54,600 --> 01:38:56,760
Speaker 2: to give them a strike. You need to ultimately, you know,

1716
01:38:57,080 --> 01:39:00,000
Speaker 2: remove it if they keep doing it over and over again.

1717
01:39:00,880 --> 01:39:05,080
Speaker 2: So we take it super seriously. We try to make

1718
01:39:05,120 --> 01:39:11,040
Speaker 2: sure that there are as few as possible, like wrongly accused.

1719
01:39:12,400 --> 01:39:14,800
Speaker 2: No system is perfect. I think our system is very

1720
01:39:14,920 --> 01:39:19,400
Speaker 2: very good. But this, this whole you know, streaming fraud

1721
01:39:19,479 --> 01:39:22,080
Speaker 2: thing is a scourge on the industry and something we

1722
01:39:22,120 --> 01:39:25,200
Speaker 2: try to combat as in every way that we can.

1723
01:39:33,240 --> 01:39:34,360
Speaker 1: So where are you from?

1724
01:39:35,400 --> 01:39:38,479
Speaker 2: Like where did I grow up? Yeah, grew up near

1725
01:39:38,520 --> 01:39:39,480
Speaker 2: new Haven, Connecticut.

1726
01:39:41,120 --> 01:39:43,080
Speaker 1: Oh wait wait, I'm from Connecticut where.

1727
01:39:43,800 --> 01:39:45,880
Speaker 2: I grew up in Cheshire and then Madison.

1728
01:39:46,920 --> 01:39:49,519
Speaker 1: And what did your parents do for a living?

1729
01:39:50,320 --> 01:39:52,080
Speaker 2: Nothing to do with what I do. They were both

1730
01:39:52,160 --> 01:39:54,559
Speaker 2: medical doctors, so I ran the other way.

1731
01:39:55,400 --> 01:39:57,680
Speaker 1: Okay, so there are medical doctors. How many kids in

1732
01:39:57,720 --> 01:40:00,880
Speaker 1: the family, Me and my older brother? And what your

1733
01:40:00,920 --> 01:40:01,640
Speaker 1: older brother do?

1734
01:40:02,520 --> 01:40:05,120
Speaker 2: He's at Google. I've been a Spotify fourteen years. He's

1735
01:40:05,160 --> 01:40:07,880
Speaker 2: been at Google like seventeen eighteen years. So we're both

1736
01:40:07,920 --> 01:40:09,160
Speaker 2: crazy lifirst.

1737
01:40:10,000 --> 01:40:11,400
Speaker 1: Do you have a close relationship.

1738
01:40:12,240 --> 01:40:13,479
Speaker 2: I do, Yeah, love my brother.

1739
01:40:13,760 --> 01:40:15,959
Speaker 1: I mean the fact that he's at a tech company,

1740
01:40:16,400 --> 01:40:19,479
Speaker 1: You're in a music tech company. Is there anything in

1741
01:40:19,479 --> 01:40:21,080
Speaker 1: the background that would predict that.

1742
01:40:21,920 --> 01:40:24,000
Speaker 2: I'm not sure. He's more on the sales side. I'm

1743
01:40:24,000 --> 01:40:29,320
Speaker 2: more on the product side. But you know, my we

1744
01:40:29,360 --> 01:40:32,800
Speaker 2: came out it totally different ways. I've been obsessed with

1745
01:40:32,880 --> 01:40:35,439
Speaker 2: music my whole life. I started playing guitar and piano

1746
01:40:35,479 --> 01:40:38,120
Speaker 2: from a very young age. I had delusions of being

1747
01:40:38,160 --> 01:40:41,280
Speaker 2: a performer myself, I you know, dismissed those thought. I

1748
01:40:41,320 --> 01:40:45,880
Speaker 2: wanted to be a producer. Wrote my college thesis on

1749
01:40:46,200 --> 01:40:48,760
Speaker 2: how the music industry should escape from napster. I mean,

1750
01:40:48,800 --> 01:40:52,160
Speaker 2: I've been kind of like a single track mind about

1751
01:40:52,360 --> 01:40:56,040
Speaker 2: you know, the music ecosystem and the music business and

1752
01:40:56,360 --> 01:40:59,280
Speaker 2: how things could work better for artists and fans. My

1753
01:40:59,320 --> 01:41:02,200
Speaker 2: whole life been obsessed with it. That's my whole journey.

1754
01:41:02,240 --> 01:41:05,599
Speaker 2: That's what I've been always most interested in, and that's

1755
01:41:05,640 --> 01:41:07,840
Speaker 2: really the way I came to Spotify, not through tech

1756
01:41:07,960 --> 01:41:09,479
Speaker 2: but more through music.

1757
01:41:10,760 --> 01:41:12,800
Speaker 1: So how serious a musician were you?

1758
01:41:13,400 --> 01:41:15,519
Speaker 2: I was like recording my own stuff in high school

1759
01:41:15,560 --> 01:41:20,439
Speaker 2: and college and doing you know, a couple like small

1760
01:41:20,600 --> 01:41:23,840
Speaker 2: gigs here and there, but nothing serious. I learned pretty

1761
01:41:23,920 --> 01:41:25,479
Speaker 2: quickly that I was that was not going to be

1762
01:41:25,520 --> 01:41:26,320
Speaker 2: my superpower.

1763
01:41:26,920 --> 01:41:27,679
Speaker 1: How did you learn?

1764
01:41:29,160 --> 01:41:33,200
Speaker 2: You know, like performing wasn't like fun for me. I

1765
01:41:33,240 --> 01:41:35,320
Speaker 2: was just worried about it going bad. I wasn't enjoying

1766
01:41:35,400 --> 01:41:40,160
Speaker 2: going well. And I just I, like, you know, I

1767
01:41:40,240 --> 01:41:42,360
Speaker 2: wasn't great. I was good. I was just I wasn't great.

1768
01:41:42,520 --> 01:41:44,800
Speaker 2: I could tell that there were other people that were

1769
01:41:44,800 --> 01:41:46,680
Speaker 2: going to be offering way more in the world in

1770
01:41:46,760 --> 01:41:49,000
Speaker 2: terms of recording and performing music than I was going to.

1771
01:41:49,640 --> 01:41:51,960
Speaker 1: So you were like a solo actor? There were bands?

1772
01:41:52,040 --> 01:41:53,720
Speaker 2: Yeah, like a couple of people I were, you know,

1773
01:41:54,240 --> 01:41:57,000
Speaker 2: just duos, trios that we were recording with in high

1774
01:41:57,040 --> 01:41:57,719
Speaker 2: school and college.

1775
01:41:58,280 --> 01:41:59,479
Speaker 1: And where'd you go to college?

1776
01:42:00,080 --> 01:42:00,960
Speaker 2: At Penn in Philly?

1777
01:42:02,040 --> 01:42:03,920
Speaker 1: Okay, you go to college at the height of the

1778
01:42:04,000 --> 01:42:04,679
Speaker 1: dapster era.

1779
01:42:05,240 --> 01:42:06,040
Speaker 2: Yeah, pretty much.

1780
01:42:06,640 --> 01:42:10,360
Speaker 1: So what was it like being in college during Napster? Yeah?

1781
01:42:10,560 --> 01:42:11,200
Speaker 1: It was wild.

1782
01:42:11,240 --> 01:42:13,880
Speaker 2: I mean I remember getting to the dorm and having

1783
01:42:14,080 --> 01:42:16,479
Speaker 2: one of the ras or you know, the older kids

1784
01:42:16,479 --> 01:42:18,439
Speaker 2: that tell you what to do, being like, this is

1785
01:42:18,479 --> 01:42:22,200
Speaker 2: the server you connect to to see everybody else's hard drives,

1786
01:42:22,200 --> 01:42:23,840
Speaker 2: and this is how we all share our music together.

1787
01:42:23,880 --> 01:42:25,840
Speaker 2: It was like part of like, you know, a new

1788
01:42:25,920 --> 01:42:28,320
Speaker 2: student orientation is like this is how the piracy is

1789
01:42:28,360 --> 01:42:29,640
Speaker 2: going to work. So you just you know, it was

1790
01:42:29,680 --> 01:42:34,960
Speaker 2: a totally different you know, era and world at that point.

1791
01:42:35,880 --> 01:42:40,120
Speaker 2: And but you know, what I will say is the

1792
01:42:40,280 --> 01:42:43,519
Speaker 2: social music discovery through that and being at college and

1793
01:42:43,560 --> 01:42:45,640
Speaker 2: seeing like, you know, you're sitting in high school with

1794
01:42:45,680 --> 01:42:47,120
Speaker 2: your own playlist and then you get to college and

1795
01:42:47,120 --> 01:42:49,280
Speaker 2: you see everybody else's place. Oh you're into that and

1796
01:42:49,280 --> 01:42:51,360
Speaker 2: you're into that. It was one of the most exciting

1797
01:42:51,400 --> 01:42:53,519
Speaker 2: times for me as a music fan, just to see that,

1798
01:42:53,600 --> 01:42:56,320
Speaker 2: even though like the business side of it was totally broken.

1799
01:42:57,320 --> 01:42:58,760
Speaker 2: Definitely took some inspiration from that.

1800
01:42:59,560 --> 01:43:02,000
Speaker 1: So what music were you're listening to? Oh?

1801
01:43:02,040 --> 01:43:06,559
Speaker 2: Everything? But I grew up being mostly into jazz, into country,

1802
01:43:06,560 --> 01:43:12,240
Speaker 2: indie rock, classic rock, Yeah, everything.

1803
01:43:12,479 --> 01:43:15,000
Speaker 1: And you major in what in college.

1804
01:43:15,880 --> 01:43:18,120
Speaker 2: In Anneburg they call it communication, but it's basically like

1805
01:43:18,160 --> 01:43:20,759
Speaker 2: media industry stuff and music minor.

1806
01:43:23,000 --> 01:43:26,400
Speaker 1: Yeah, and what did your thesis say?

1807
01:43:27,520 --> 01:43:29,880
Speaker 2: It was actually more pessimistic than it turned out to be.

1808
01:43:29,960 --> 01:43:31,840
Speaker 2: I thought people were gonna need to be like more

1809
01:43:31,880 --> 01:43:35,639
Speaker 2: altruistic and be gifting artists and more like Patreon kind

1810
01:43:35,640 --> 01:43:40,599
Speaker 2: of vibes. You know, the fact that products were made

1811
01:43:40,640 --> 01:43:42,880
Speaker 2: that were actually better than piracy, that got people to

1812
01:43:42,920 --> 01:43:45,400
Speaker 2: pay because they got something from it, not because of

1813
01:43:45,720 --> 01:43:47,400
Speaker 2: the purity of their hearts. I think is a much

1814
01:43:47,439 --> 01:43:49,599
Speaker 2: better evolution and a much bigger business for everyone to

1815
01:43:49,600 --> 01:43:53,400
Speaker 2: be in. But I was, yeah, I was looking at

1816
01:43:53,560 --> 01:43:57,800
Speaker 2: what are other ways that businesses have monetized freely available

1817
01:43:57,840 --> 01:44:00,880
Speaker 2: goods like water to bottled water and you know these

1818
01:44:00,960 --> 01:44:02,320
Speaker 2: kind of things, and how do you how do you

1819
01:44:02,360 --> 01:44:02,680
Speaker 2: do that?

1820
01:44:05,000 --> 01:44:06,719
Speaker 1: So why do you think you were wrong?

1821
01:44:11,280 --> 01:44:16,479
Speaker 2: Well, so what I what I had conviction in was

1822
01:44:16,800 --> 01:44:20,280
Speaker 2: you need to meet consumers where they are. Every young

1823
01:44:20,400 --> 01:44:24,880
Speaker 2: person had the assumption music is free. So if you

1824
01:44:24,880 --> 01:44:27,360
Speaker 2: put a paywall in front of people, you lost them already.

1825
01:44:27,439 --> 01:44:31,679
Speaker 2: There has to be a free tier to get people

1826
01:44:31,680 --> 01:44:36,439
Speaker 2: to pay. So my first, like real job was at

1827
01:44:36,520 --> 01:44:40,360
Speaker 2: LimeWire where they were trying to build. My job was

1828
01:44:40,400 --> 01:44:43,800
Speaker 2: to build a licensed MP three store, and we were

1829
01:44:43,800 --> 01:44:48,599
Speaker 2: going to try to migrate people from file sharing into

1830
01:44:48,640 --> 01:44:54,120
Speaker 2: a licensed subscription. And that was one idea of how

1831
01:44:54,120 --> 01:44:56,439
Speaker 2: we could migrate people from like meet them where they are,

1832
01:44:56,560 --> 01:45:00,320
Speaker 2: meet them with free, get them moved over. If I

1833
01:45:00,360 --> 01:45:06,280
Speaker 2: did that so exceptionally well, the free to paid funnel

1834
01:45:06,920 --> 01:45:09,120
Speaker 2: that's been built by getting people to come in and

1835
01:45:09,160 --> 01:45:13,120
Speaker 2: discover and invest in their library and then get so

1836
01:45:13,200 --> 01:45:15,080
Speaker 2: invested that they want to remove the ads, and they

1837
01:45:15,080 --> 01:45:16,759
Speaker 2: want to play on demand, and they want to convert

1838
01:45:16,800 --> 01:45:20,120
Speaker 2: to premium. It just works so incredibly well to take

1839
01:45:20,200 --> 01:45:22,160
Speaker 2: a population of the world that had no intention of

1840
01:45:22,240 --> 01:45:25,640
Speaker 2: being a paid music subscriber now to a place where they,

1841
01:45:25,840 --> 01:45:28,000
Speaker 2: of course I would never cancel that subscription. And it's

1842
01:45:28,040 --> 01:45:31,960
Speaker 2: all been through crafting a really good, you know, product experience,

1843
01:45:31,960 --> 01:45:32,320
Speaker 2: I think.

1844
01:45:33,120 --> 01:45:35,720
Speaker 1: And you know what the churn rate is, Oh, it's

1845
01:45:35,840 --> 01:45:36,240
Speaker 1: very low.

1846
01:45:36,280 --> 01:45:39,560
Speaker 2: I mean, especially on premium, you know, low, low single digits.

1847
01:45:40,120 --> 01:45:43,920
Speaker 1: Okay, you graduate from college, your first job is with LimeWire.

1848
01:45:44,520 --> 01:45:47,479
Speaker 2: Well, let's see, I was in college, so when I

1849
01:45:47,520 --> 01:45:51,360
Speaker 2: wanted to be a producer, I first worked at recording

1850
01:45:51,400 --> 01:45:53,599
Speaker 2: studios and I thought I was going to like, you know,

1851
01:45:53,800 --> 01:45:55,640
Speaker 2: get a turn on the pro tool set up, and

1852
01:45:55,680 --> 01:46:00,160
Speaker 2: I was you know, rolling mike cable and taking out trash.

1853
01:46:00,200 --> 01:46:01,920
Speaker 2: So it was like, Okay, that's not going to be

1854
01:46:01,960 --> 01:46:05,439
Speaker 2: the route for me. And then the big turning point

1855
01:46:05,479 --> 01:46:08,479
Speaker 2: for me was an internship I had at EMI. So

1856
01:46:08,680 --> 01:46:12,320
Speaker 2: I got to be the intern for summer for Digital

1857
01:46:12,640 --> 01:46:15,000
Speaker 2: Biz Dev for EMI when they were a major label,

1858
01:46:15,320 --> 01:46:17,840
Speaker 2: and I met every single person in two thousand and

1859
01:46:17,880 --> 01:46:23,080
Speaker 2: seven that wanted to license EMI, Spiral Frog and all

1860
01:46:23,160 --> 01:46:26,960
Speaker 2: the ideas that people had. You know, Amazon was going

1861
01:46:27,040 --> 01:46:30,320
Speaker 2: DRM free, MP three's, you know, everyone's trying to figure

1862
01:46:30,320 --> 01:46:33,960
Speaker 2: it out. And one of the companies that I met

1863
01:46:33,960 --> 01:46:36,680
Speaker 2: with that summer was LimeWire and they were like, we

1864
01:46:36,720 --> 01:46:39,360
Speaker 2: have one hundred million monthly active users. We're trying to

1865
01:46:39,360 --> 01:46:41,360
Speaker 2: get them onto a license thing. And I was like this,

1866
01:46:41,360 --> 01:46:45,000
Speaker 2: this I can believe might work. So I was there

1867
01:46:45,040 --> 01:46:48,839
Speaker 2: for three three or four years. That's where I learned

1868
01:46:49,000 --> 01:46:52,280
Speaker 2: you know, product and software, and we made a run

1869
01:46:52,320 --> 01:46:53,880
Speaker 2: at it. We built a product that would have been

1870
01:46:53,880 --> 01:46:58,200
Speaker 2: competitive Spotify. There were some progressive people in the industry

1871
01:46:58,240 --> 01:47:01,040
Speaker 2: that like the idea of migrating user from from Limeware

1872
01:47:01,080 --> 01:47:03,120
Speaker 2: to that, but ultimately, you know, it got shut down

1873
01:47:04,560 --> 01:47:09,880
Speaker 2: and then Spotify decided it wanted to start a US

1874
01:47:09,920 --> 01:47:13,120
Speaker 2: office and had heard that you know, I and a

1875
01:47:13,120 --> 01:47:15,400
Speaker 2: couple other folks were you know, trying to make this

1876
01:47:15,439 --> 01:47:18,080
Speaker 2: thing happen in Limeware and reach out, and that's where

1877
01:47:18,080 --> 01:47:20,640
Speaker 2: we started talking about starting the US team for Spotify.

1878
01:47:21,320 --> 01:47:25,320
Speaker 1: They found you. Yeah, okay, so what year do you

1879
01:47:25,320 --> 01:47:26,600
Speaker 1: start working for Spotify?

1880
01:47:27,560 --> 01:47:28,679
Speaker 2: February twenty eleven.

1881
01:47:30,240 --> 01:47:34,880
Speaker 1: Okay, so what was your job then?

1882
01:47:35,479 --> 01:47:39,320
Speaker 2: In the beginning, it was building out a US product team.

1883
01:47:39,760 --> 01:47:41,880
Speaker 2: So the whole company was, you know, one hundred and

1884
01:47:41,920 --> 01:47:45,599
Speaker 2: fifty folks, mostly in Sweden at that time, but we

1885
01:47:45,640 --> 01:47:48,479
Speaker 2: wanted to have a tech team in the US, and

1886
01:47:48,800 --> 01:47:54,080
Speaker 2: initially we were building our you know, we decided to

1887
01:47:54,080 --> 01:47:57,280
Speaker 2: get into recommendation. Spotify had never done recommendation prior to that.

1888
01:47:57,880 --> 01:48:00,400
Speaker 2: We decided to build our own recommendation features up a

1889
01:48:00,400 --> 01:48:04,880
Speaker 2: team to do that. We were also building the the

1890
01:48:04,920 --> 01:48:07,479
Speaker 2: ad support of the free tier, how to run ads

1891
01:48:07,479 --> 01:48:10,200
Speaker 2: and also how to kind of construct the freemium model,

1892
01:48:10,280 --> 01:48:13,240
Speaker 2: what you get for free, what you need to you know,

1893
01:48:13,360 --> 01:48:15,679
Speaker 2: get by converting. Those were some of the initial things

1894
01:48:15,680 --> 01:48:18,519
Speaker 2: that I was accountable for when it was the US team.

1895
01:48:19,640 --> 01:48:21,559
Speaker 1: And how did you move up the ladder to where

1896
01:48:21,600 --> 01:48:22,240
Speaker 1: you are now.

1897
01:48:24,320 --> 01:48:30,040
Speaker 2: Well, probably the biggest change that happened was Daniel. I

1898
01:48:30,080 --> 01:48:35,759
Speaker 2: think it was probably twenty fifteen or something. Daniel, our CEO, said,

1899
01:48:37,760 --> 01:48:43,479
Speaker 2: we really need to have a creator team. We really

1900
01:48:43,479 --> 01:48:46,080
Speaker 2: thought of ourselves as we license music and then we

1901
01:48:46,080 --> 01:48:49,160
Speaker 2: have a consumer product. You know, we didn't have we

1902
01:48:49,160 --> 01:48:51,400
Speaker 2: didn't have the idea of a of a creator team

1903
01:48:51,439 --> 01:48:55,439
Speaker 2: back then. But at that time, like if you think

1904
01:48:55,479 --> 01:48:57,920
Speaker 2: the misconceptions in the industry today are bad, I mean

1905
01:48:58,000 --> 01:49:00,800
Speaker 2: then it was like no artist knew whether they had

1906
01:49:00,840 --> 01:49:03,280
Speaker 2: ten streams on Spotify or a million streams, Like it

1907
01:49:03,320 --> 01:49:07,439
Speaker 2: was a total black box and we really needed to

1908
01:49:07,479 --> 01:49:11,040
Speaker 2: build a bridge. And so he asked me, I had

1909
01:49:11,120 --> 01:49:12,640
Speaker 2: like a team of I don't know, one hundred and

1910
01:49:12,640 --> 01:49:15,360
Speaker 2: two hundred folks, and he was like, yeah, I want

1911
01:49:15,360 --> 01:49:18,200
Speaker 2: you to give all that up and start this new thing.

1912
01:49:18,560 --> 01:49:20,280
Speaker 2: It'll just be you in the beginning and build up

1913
01:49:20,280 --> 01:49:21,800
Speaker 2: some you know, figure out what we should do on

1914
01:49:21,840 --> 01:49:26,320
Speaker 2: the creator side. And that kind of felt daunting or

1915
01:49:26,320 --> 01:49:27,920
Speaker 2: and exciting at the time, but that was kind of

1916
01:49:27,960 --> 01:49:30,400
Speaker 2: a big turning point. Because everything that I've done since then,

1917
01:49:30,520 --> 01:49:34,360
Speaker 2: building out Spotify for artists are business on the supply

1918
01:49:34,439 --> 01:49:36,960
Speaker 2: facing side, and then now you know, leading the music

1919
01:49:37,240 --> 01:49:40,639
Speaker 2: vertical more broadly is all kind of built on getting

1920
01:49:40,680 --> 01:49:44,840
Speaker 2: really close to the artist's side, what they need, what

1921
01:49:44,960 --> 01:49:47,639
Speaker 2: they want more out of Spotify. That's, you know, really

1922
01:49:47,680 --> 01:49:49,320
Speaker 2: what I've been focused on for the last ten years.

1923
01:49:50,479 --> 01:49:51,320
Speaker 1: Do you have stock?

1924
01:49:53,320 --> 01:49:56,160
Speaker 2: You know, like all employees, you get you know, stock

1925
01:49:56,200 --> 01:49:58,519
Speaker 2: as part of your package.

1926
01:49:58,760 --> 01:50:02,479
Speaker 1: Well, when public, do you already have an interest? Yeah?

1927
01:50:02,560 --> 01:50:05,200
Speaker 2: I mean even from the beginning when because I joined

1928
01:50:05,439 --> 01:50:07,360
Speaker 2: what seven eight years before we went public?

1929
01:50:07,400 --> 01:50:09,200
Speaker 1: So and have you sold any stock?

1930
01:50:11,200 --> 01:50:15,240
Speaker 2: I'm not sharing my you know, personal uh, you know,

1931
01:50:15,360 --> 01:50:19,200
Speaker 2: financial stuff, but I've sold some of hold some Yeah.

1932
01:50:19,240 --> 01:50:23,800
Speaker 1: Well I mean it launched, yeah, went down ultimately, and

1933
01:50:23,880 --> 01:50:24,840
Speaker 1: now it's through the roof.

1934
01:50:25,360 --> 01:50:25,680
Speaker 2: Mm hm.

1935
01:50:27,120 --> 01:50:30,040
Speaker 1: You know, is this like a traditional startup if you

1936
01:50:30,080 --> 01:50:33,439
Speaker 1: wanted to quit your job, would you have to continue

1937
01:50:33,479 --> 01:50:33,840
Speaker 1: to work?

1938
01:50:35,840 --> 01:50:39,160
Speaker 2: I mean, look, in the grand scheme of things, like

1939
01:50:40,800 --> 01:50:44,920
Speaker 2: the success I've had is any much greater than anything

1940
01:50:44,960 --> 01:50:48,680
Speaker 2: I was ever hoping for. Like I'm you know, I

1941
01:50:48,800 --> 01:50:53,799
Speaker 2: consider myself very lucky in that way. I am obsessed

1942
01:50:53,800 --> 01:50:55,720
Speaker 2: with what I do. I love what we're doing. I

1943
01:50:55,720 --> 01:50:58,000
Speaker 2: feel really passionate about what I'm doing. That's the primary,

1944
01:50:58,160 --> 01:51:00,200
Speaker 2: you know, reason that I do what I do for sure.

1945
01:51:01,800 --> 01:51:05,560
Speaker 1: Yeah, So what are the opportunities left for you in Spotify?

1946
01:51:07,439 --> 01:51:10,679
Speaker 2: Well, look, I go back to I think there's two

1947
01:51:10,720 --> 01:51:14,360
Speaker 2: big things in terms of our overall mission to grow.

1948
01:51:15,760 --> 01:51:20,440
Speaker 2: You know, one of the things I love about this Spotify,

1949
01:51:20,479 --> 01:51:23,680
Speaker 2: but streaming in general, the incentives are so aligned. We

1950
01:51:23,720 --> 01:51:25,960
Speaker 2: want to grow a revenue, and every time we grow revenue,

1951
01:51:25,960 --> 01:51:28,880
Speaker 2: two thirds of that goes to rights holders. So a

1952
01:51:28,920 --> 01:51:30,800
Speaker 2: lot can be made of disputes in the industry, but

1953
01:51:30,840 --> 01:51:32,680
Speaker 2: by and large, what's good for us is good for

1954
01:51:32,720 --> 01:51:36,240
Speaker 2: the industry. That is just true. And as we go

1955
01:51:36,320 --> 01:51:39,320
Speaker 2: about trying to grow the pie together. The two big

1956
01:51:39,320 --> 01:51:41,640
Speaker 2: things that stand out to me is one what I

1957
01:51:41,680 --> 01:51:45,040
Speaker 2: said before, we have five hundred six five hundred and

1958
01:51:45,040 --> 01:51:47,599
Speaker 2: six hundred million people paying for a music subscription around

1959
01:51:47,640 --> 01:51:50,400
Speaker 2: the world. That's awesome. I don't think anyone thought we'd

1960
01:51:50,400 --> 01:51:52,479
Speaker 2: get there. But there's billions of people in the world,

1961
01:51:52,520 --> 01:51:54,920
Speaker 2: and we need to figure out how we're going to

1962
01:51:55,000 --> 01:51:57,639
Speaker 2: adjust the offering and the freemium funnel and the different

1963
01:51:57,640 --> 01:51:59,559
Speaker 2: skews to get everyone in the world paying for music.

1964
01:51:59,600 --> 01:52:02,479
Speaker 2: So I think that's a really fun opportunity. And then

1965
01:52:02,560 --> 01:52:04,680
Speaker 2: the second one is is kind of breaking out of

1966
01:52:04,680 --> 01:52:08,080
Speaker 2: the one size fits all. I think for the vast,

1967
01:52:08,160 --> 01:52:11,879
Speaker 2: vast majority of people paying one hundred and twenty dollars

1968
01:52:12,200 --> 01:52:17,519
Speaker 2: a year ish I'm rounding in a music subscription raises

1969
01:52:17,560 --> 01:52:19,800
Speaker 2: their total amount of spend because they wouldn't have spent

1970
01:52:19,840 --> 01:52:22,200
Speaker 2: one hundred and twenty dollars, you know, in a previous era.

1971
01:52:22,400 --> 01:52:26,600
Speaker 2: But for some the biggest super fans, that's under optimizing,

1972
01:52:26,680 --> 01:52:28,920
Speaker 2: like they would be willing to spend more and they're

1973
01:52:28,960 --> 01:52:32,120
Speaker 2: more passionate about music, and there's opportunities to make sure

1974
01:52:32,160 --> 01:52:35,960
Speaker 2: that there's more points along the supply demand curve where

1975
01:52:36,000 --> 01:52:40,400
Speaker 2: people can you know, get a more valuable service and

1976
01:52:40,640 --> 01:52:42,960
Speaker 2: drive more revenue to the industry in return. So I

1977
01:52:43,040 --> 01:52:45,520
Speaker 2: think both of those things are huge opportunities.

1978
01:52:45,640 --> 01:52:48,800
Speaker 1: Okay, just go because it has been such you know,

1979
01:52:49,080 --> 01:52:54,799
Speaker 1: a talking point. Yeah, other than higher quality music which

1980
01:52:55,000 --> 01:52:59,280
Speaker 1: Amazon and Apple bake in for the same price, what

1981
01:52:59,360 --> 01:53:01,759
Speaker 1: am I going to from my additional dollars?

1982
01:53:02,240 --> 01:53:08,880
Speaker 2: Well, first of all, let's let's talk about high fidelity music.

1983
01:53:13,200 --> 01:53:18,200
Speaker 2: So if you go back and in the recent history

1984
01:53:18,200 --> 01:53:22,400
Speaker 2: of the last few years. I don't think there's any

1985
01:53:22,400 --> 01:53:27,719
Speaker 2: evidence that hi fi is something that gets more people

1986
01:53:27,920 --> 01:53:31,520
Speaker 2: in the boat. If you don't have a music subscription

1987
01:53:31,600 --> 01:53:35,040
Speaker 2: at all. Is adding high fi going to be the

1988
01:53:35,120 --> 01:53:36,800
Speaker 2: thing that gets you over the hump to say, oh,

1989
01:53:36,840 --> 01:53:39,200
Speaker 2: now I want a music subscription. I don't think so.

1990
01:53:39,360 --> 01:53:42,200
Speaker 2: I haven't seen any evidence of that. So I think

1991
01:53:42,200 --> 01:53:46,640
Speaker 2: it's a pretty big missed opportunity to just chuck it

1992
01:53:46,680 --> 01:53:50,800
Speaker 2: in premium. I think that it under leverages what it

1993
01:53:50,840 --> 01:53:53,719
Speaker 2: can do for the industry because really it's the most

1994
01:53:53,840 --> 01:54:00,479
Speaker 2: leaned in, passionate people who care about that, and I

1995
01:54:00,520 --> 01:54:02,200
Speaker 2: think you have to charge more. So I don't take

1996
01:54:02,200 --> 01:54:04,960
Speaker 2: for granted that the status quo as it exists today

1997
01:54:05,520 --> 01:54:09,280
Speaker 2: will exist or should exist in that way. But then,

1998
01:54:09,680 --> 01:54:14,759
Speaker 2: you know, to answer your question beyond that, I think

1999
01:54:14,800 --> 01:54:18,479
Speaker 2: that you know, if you think about what Spotify is

2000
01:54:18,960 --> 01:54:21,720
Speaker 2: today compared to what it was ten years ago, we've

2001
01:54:21,720 --> 01:54:26,559
Speaker 2: added tons of stuff that probably appeals more to you know,

2002
01:54:26,880 --> 01:54:32,280
Speaker 2: big fans rather than casual listeners. And we've got a

2003
01:54:32,320 --> 01:54:35,920
Speaker 2: road map of you know, twenty thirty forty things that

2004
01:54:35,960 --> 01:54:39,480
Speaker 2: are going to be in that category rolling forward. So

2005
01:54:39,800 --> 01:54:41,760
Speaker 2: I think there's going to be an opportunity to always

2006
01:54:41,840 --> 01:54:45,560
Speaker 2: have a version that's you know, best in class and

2007
01:54:45,600 --> 01:54:49,160
Speaker 2: appeals to the most ardent fans, while the vast majority

2008
01:54:49,200 --> 01:54:52,080
Speaker 2: of people are totally satisfied with you know, the proposition

2009
01:54:52,120 --> 01:54:52,919
Speaker 2: they get on premium.

2010
01:54:53,480 --> 01:54:57,240
Speaker 1: What percentage of people would upgrade to this higher level

2011
01:54:57,720 --> 01:55:00,640
Speaker 1: for you to be satisfied for the company to be honest.

2012
01:55:00,400 --> 01:55:02,960
Speaker 2: Fine, I don't know. It's all upside, So I don't

2013
01:55:02,960 --> 01:55:05,440
Speaker 2: think there needs to be a certain number to be satisfied.

2014
01:55:06,280 --> 01:55:09,080
Speaker 2: It's it's it's pure incremental, both for us and for

2015
01:55:09,280 --> 01:55:10,240
Speaker 2: everyone in the industry.

2016
01:55:11,120 --> 01:55:13,800
Speaker 1: Well, I mean, if you want to go deeper, Spotify

2017
01:55:13,920 --> 01:55:18,320
Speaker 1: stock is going way up. Analysis says, you know, there's

2018
01:55:18,400 --> 01:55:22,840
Speaker 1: constant innovation. You look at the labels, their stock has

2019
01:55:22,880 --> 01:55:26,280
Speaker 1: been somewhat morribn because they say, well, you know, there's

2020
01:55:26,320 --> 01:55:32,680
Speaker 1: no innovation, so they're banking on this additional tier. Lucy

2021
01:55:32,800 --> 01:55:34,840
Speaker 1: Grange is going on and on, We're going to tap

2022
01:55:34,880 --> 01:55:40,000
Speaker 1: into the super fan. Okay, they're not. I mean, yes,

2023
01:55:40,480 --> 01:55:45,040
Speaker 1: on Netflix you can pay extra for four K Okay,

2024
01:55:45,440 --> 01:55:49,440
Speaker 1: but on most of these other streaming services you pay

2025
01:55:49,520 --> 01:55:53,160
Speaker 1: maybe at you know, compared to music streaming, television is

2026
01:55:53,200 --> 01:55:57,320
Speaker 1: so fuck up and antiquated My point is, I cannot

2027
01:55:57,480 --> 01:56:03,200
Speaker 1: think of a similar business. We're the main product is

2028
01:56:03,240 --> 01:56:06,680
Speaker 1: not what you're upgrading. We're of a significant you know. Listen,

2029
01:56:07,680 --> 01:56:09,760
Speaker 1: I just got to bug up my rear end about

2030
01:56:09,800 --> 01:56:13,400
Speaker 1: this because they've been saying this to analysts. You know,

2031
01:56:14,520 --> 01:56:18,400
Speaker 1: title never turned into anything. You know, originally it was

2032
01:56:18,440 --> 01:56:22,800
Speaker 1: a Norwegian company that was something different whatever they were incompetent.

2033
01:56:23,760 --> 01:56:27,800
Speaker 1: So I subscribe to my music service for the music

2034
01:56:29,320 --> 01:56:32,480
Speaker 1: unless you're gonna let me meet the act or you

2035
01:56:32,520 --> 01:56:36,520
Speaker 1: get me better concert tickets. You know, what is it

2036
01:56:36,600 --> 01:56:37,440
Speaker 1: you're gonna give me.

2037
01:56:39,240 --> 01:56:41,240
Speaker 2: I think you're gonna like it. We'll see you. We'll

2038
01:56:41,280 --> 01:56:43,560
Speaker 2: talk in a year and we'll see if you like it.

2039
01:56:43,720 --> 01:56:45,600
Speaker 2: But I think look, in a lot of ways, we've

2040
01:56:45,600 --> 01:56:50,640
Speaker 2: already started on the journey. Like you know, to your point,

2041
01:56:50,800 --> 01:56:54,920
Speaker 2: with family plans, you have more parental controls, you have

2042
01:56:54,960 --> 01:56:59,520
Speaker 2: more accounts. We added audio books as an additional value proposition.

2043
01:56:59,600 --> 01:57:02,800
Speaker 2: It's not like this is a brand new, you know idea.

2044
01:57:02,880 --> 01:57:05,680
Speaker 2: We have reps under our belt for you know, how

2045
01:57:05,720 --> 01:57:09,280
Speaker 2: to version the skews. I'm you know, I'm very optimistic

2046
01:57:09,320 --> 01:57:11,960
Speaker 2: that there'll be opportunity to grow and change.

2047
01:57:12,000 --> 01:57:14,720
Speaker 1: But let's just say you know, we're all very familiar

2048
01:57:14,800 --> 01:57:17,680
Speaker 1: with the different things et SAT round audiobooks don't take

2049
01:57:17,720 --> 01:57:20,880
Speaker 1: from the royalty stream, and then the recent thing of

2050
01:57:20,920 --> 01:57:24,120
Speaker 1: you know, lowering royalties overall through other things. Let's leave

2051
01:57:24,160 --> 01:57:28,400
Speaker 1: all that aside. I'm a music fan. You want me

2052
01:57:28,480 --> 01:57:33,120
Speaker 1: to pay an additional ten dollars other than a higher

2053
01:57:33,200 --> 01:57:38,560
Speaker 1: quality sound blue skyet. I can't think of anything you

2054
01:57:38,640 --> 01:57:40,640
Speaker 1: can give me the way. I'm going to say to

2055
01:57:40,680 --> 01:57:44,280
Speaker 1: a significant number of people, that's better because it's about

2056
01:57:44,320 --> 01:57:48,040
Speaker 1: the music. We've already established that the record companies don't

2057
01:57:48,040 --> 01:57:52,280
Speaker 1: want exclusives, So yeah, you don't want to get into

2058
01:57:52,320 --> 01:57:55,600
Speaker 1: a war of you can listen to it before everybody else.

2059
01:57:55,680 --> 01:58:00,760
Speaker 1: That'll be a disaster. As I say, your point of Spotify,

2060
01:58:00,800 --> 01:58:05,200
Speaker 1: it's total upside. I get it, okay, but the record

2061
01:58:05,360 --> 01:58:11,360
Speaker 1: industry is banking on this, okay, and so far they've

2062
01:58:11,440 --> 01:58:14,600
Speaker 1: filled in the blanks not at all. They say, well,

2063
01:58:14,600 --> 01:58:18,840
Speaker 1: you don't higher quality stream and then nothing, we're gonna

2064
01:58:18,880 --> 01:58:22,960
Speaker 1: pay the superfans. I was that person. You know, I'm

2065
01:58:23,000 --> 01:58:25,200
Speaker 1: not paying to begin with. About one hundred and twenty

2066
01:58:25,240 --> 01:58:27,680
Speaker 1: dollars a year is an incredible bargain relative to what

2067
01:58:27,720 --> 01:58:31,839
Speaker 1: I used to spend on music. But I was buying music.

2068
01:58:32,760 --> 01:58:35,080
Speaker 1: That was it. In addition, if I was a big

2069
01:58:35,160 --> 01:58:38,720
Speaker 1: music fan, I knew we could get the cheapest records. Yeah,

2070
01:58:38,880 --> 01:58:40,920
Speaker 1: I might go for the contract tickets. I don't know

2071
01:58:40,960 --> 01:58:44,840
Speaker 1: where else in the ecosystem there there's a spot for

2072
01:58:44,880 --> 01:58:47,280
Speaker 1: me to give it. You're gonna give me more services

2073
01:58:47,840 --> 01:58:50,320
Speaker 1: that doesn't speak to the music. The US, the big

2074
01:58:50,360 --> 01:58:53,240
Speaker 1: super fan, they know what they want to listen to.

2075
01:58:53,480 --> 01:58:55,480
Speaker 1: You're gonna give me audio bunk. You can give me

2076
01:58:55,560 --> 01:58:58,879
Speaker 1: a blowjob whatever. It's got nothing to do with the music.

2077
01:59:01,040 --> 01:59:03,680
Speaker 2: Well, look like I said, I mean, we're gonna do

2078
01:59:03,720 --> 01:59:05,800
Speaker 2: it our own way. I'm sure that there's gonna be

2079
01:59:05,800 --> 01:59:08,600
Speaker 2: twists and turns along the way. And then you'll be

2080
01:59:08,640 --> 01:59:10,640
Speaker 2: the judge. I'll read your letter and we'll see what

2081
01:59:10,760 --> 01:59:11,120
Speaker 2: you think.

2082
01:59:12,240 --> 01:59:15,000
Speaker 1: Okay, before I leave you, Oh, Bob.

2083
01:59:14,840 --> 01:59:17,800
Speaker 2: Hold on one second. You earlier said something I have

2084
01:59:17,880 --> 01:59:20,880
Speaker 2: to react to because I'm too easily triggered. You said

2085
01:59:21,880 --> 01:59:25,120
Speaker 2: audio books recent thing, we lowered the royalty rate. I

2086
01:59:25,200 --> 01:59:28,360
Speaker 2: just want to be clear. Our payouts have only gone

2087
01:59:28,440 --> 01:59:31,040
Speaker 2: up every year they've gone up. There has not been

2088
01:59:31,080 --> 01:59:32,400
Speaker 2: a lowering of our Wait.

2089
01:59:32,240 --> 01:59:38,520
Speaker 1: Wait, wait, wait wait wait, audio books Spotify said would

2090
01:59:38,520 --> 01:59:40,360
Speaker 1: not affect music royalties.

2091
01:59:41,000 --> 01:59:43,240
Speaker 2: Yeah, it's taken out of a different different.

2092
01:59:42,960 --> 01:59:49,640
Speaker 1: But this is all public information. Spotify is going to

2093
01:59:49,720 --> 01:59:55,640
Speaker 1: a bundle model such that less of the subscription price

2094
01:59:55,760 --> 01:59:57,720
Speaker 1: would go to music royalties.

2095
01:59:58,920 --> 02:00:02,440
Speaker 2: Yeah, so can I expand on that?

2096
02:00:02,800 --> 02:00:04,440
Speaker 1: You got the platform, go for it?

2097
02:00:04,520 --> 02:00:09,520
Speaker 2: Okay, so total royalties going up? You're right that with

2098
02:00:09,680 --> 02:00:12,560
Speaker 2: bundles the royalty rate does go down. Of course it

2099
02:00:12,600 --> 02:00:15,440
Speaker 2: needs to because you need to accommodate at putting other

2100
02:00:15,440 --> 02:00:17,920
Speaker 2: things in bundle. But let me explain how we got here. So,

2101
02:00:19,240 --> 02:00:23,800
Speaker 2: as you well know, statutory rates in the US, these

2102
02:00:23,840 --> 02:00:28,920
Speaker 2: are heavily negotiated things every four years or so. We

2103
02:00:28,960 --> 02:00:33,600
Speaker 2: had phono records for We settled in twenty twenty two

2104
02:00:33,720 --> 02:00:39,600
Speaker 2: after a long negotiation about how these new rates, these

2105
02:00:39,640 --> 02:00:42,320
Speaker 2: new statutory rates in the US should work. And if

2106
02:00:42,360 --> 02:00:46,040
Speaker 2: you go back to the press release that announced that

2107
02:00:46,120 --> 02:00:49,480
Speaker 2: deal in twenty twenty two, it talked about two things.

2108
02:00:49,880 --> 02:00:52,560
Speaker 2: Publishers were getting the headline rate increase that they were

2109
02:00:52,560 --> 02:00:57,840
Speaker 2: looking for, and the streaming services were getting the bundle

2110
02:00:57,840 --> 02:01:00,520
Speaker 2: accommodations to be able to have lower to rate for

2111
02:01:01,280 --> 02:01:05,440
Speaker 2: services that were a bundle. The deal was celebrated by

2112
02:01:05,440 --> 02:01:09,720
Speaker 2: both sides. Bundles are important. The reason bundles are important

2113
02:01:09,760 --> 02:01:12,400
Speaker 2: is because there's a lot of people like you and

2114
02:01:12,440 --> 02:01:16,120
Speaker 2: me that would gladly pay for a pure play music subscription,

2115
02:01:16,640 --> 02:01:18,320
Speaker 2: but when we want to get the world to pay

2116
02:01:18,320 --> 02:01:20,400
Speaker 2: for music, there's a lot of people who need maybe

2117
02:01:20,400 --> 02:01:23,360
Speaker 2: a couple other things to get interested. The vast majority

2118
02:01:23,400 --> 02:01:28,400
Speaker 2: of YouTube music subscribers are to YouTube Premium that includes

2119
02:01:28,520 --> 02:01:31,240
Speaker 2: music and ad for YouTube. The vast, vast majority of

2120
02:01:31,280 --> 02:01:36,320
Speaker 2: Amazon subscribers are the kind that get music bundled with

2121
02:01:36,400 --> 02:01:38,240
Speaker 2: Prime and all the other stuff that comes with Prime,

2122
02:01:38,320 --> 02:01:41,280
Speaker 2: not the pure play music subscription. Apple's got the Apple

2123
02:01:41,320 --> 02:01:44,680
Speaker 2: one thing with music and you know eight other things.

2124
02:01:45,240 --> 02:01:50,280
Speaker 2: So this is important to grow the pie. Spotify last

2125
02:01:50,320 --> 02:01:53,480
Speaker 2: year or recently we added audiobooks. That was a big move.

2126
02:01:53,600 --> 02:01:56,280
Speaker 2: It helped us grow revenue, it helped us convert better,

2127
02:01:57,600 --> 02:02:01,040
Speaker 2: It added more value to the subscription so we could

2128
02:02:01,040 --> 02:02:03,200
Speaker 2: get more people in the boat and grow the pie.

2129
02:02:03,800 --> 02:02:08,720
Speaker 2: And because of that, Spotify, just like YouTube with YouTube

2130
02:02:08,720 --> 02:02:11,240
Speaker 2: Premium and Amazon with Prime, it became a bundle in

2131
02:02:11,280 --> 02:02:13,800
Speaker 2: the same way, and so we were on the bundle rate,

2132
02:02:13,840 --> 02:02:16,680
Speaker 2: which is a lower royalty rate for on the publishing side,

2133
02:02:17,440 --> 02:02:22,800
Speaker 2: than the headline rate that was challenged in court. The

2134
02:02:23,000 --> 02:02:26,120
Speaker 2: judge looked at it, dismissed the lawsuit with prejudice, and said,

2135
02:02:26,360 --> 02:02:30,880
Speaker 2: Spotify is doing exactly what the deal was as negotiated.

2136
02:02:30,880 --> 02:02:35,440
Speaker 2: They're paying exactly as you agreed to pay in this deal.

2137
02:02:37,760 --> 02:02:42,400
Speaker 2: So because of that, the facts are pretty clear about

2138
02:02:42,800 --> 02:02:45,440
Speaker 2: what happened beginning, middle, and end. That being said, we

2139
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Speaker 2: don't want to be focused on arguing about the past

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02:02:49,040 --> 02:02:51,240
Speaker 2: and a deal we did in twenty twenty two. We

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Speaker 2: want to figure out how to grow the pie moving forward.

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Speaker 2: So the deals we did recently with Warner and Universal

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02:02:58,000 --> 02:03:01,360
Speaker 2: on the publishing side out us to say, yeah, let's

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02:03:01,360 --> 02:03:03,720
Speaker 2: have the rates go up on the publishing side, even

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02:03:03,760 --> 02:03:09,160
Speaker 2: four bundles. But in coordination with that, let's have Spotify

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02:03:09,200 --> 02:03:12,960
Speaker 2: get rights that it needs to innovate and have new

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02:03:13,000 --> 02:03:15,080
Speaker 2: propositions and things that are going to help us grow

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02:03:15,080 --> 02:03:17,360
Speaker 2: the pie in other ways. And that's been great. So

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02:03:17,400 --> 02:03:19,800
Speaker 2: now we can put this you know, accounting dispute behind

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02:03:19,840 --> 02:03:22,760
Speaker 2: us with Universal and Warner, and now that that template

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02:03:22,840 --> 02:03:26,360
Speaker 2: is there, I'm very optimistic that we can have that

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02:03:26,400 --> 02:03:29,280
Speaker 2: same you know thing roll out across the industry. But

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Speaker 2: I just wanted to be clear that yes, the royalty

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02:03:32,520 --> 02:03:34,600
Speaker 2: rate is lower for the bundle products than it is

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02:03:34,600 --> 02:03:36,920
Speaker 2: for the pure play products, but in terms of total

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02:03:36,920 --> 02:03:40,320
Speaker 2: payouts to publishers, they went up more than ten percent

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02:03:40,400 --> 02:03:42,680
Speaker 2: last year. They didn't go down because of that royalty rate.

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02:03:43,160 --> 02:03:45,560
Speaker 2: Our total payouts to publishers have gone up every year,

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Speaker 2: and last year was no exception. So I just wanted

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02:03:47,360 --> 02:03:49,240
Speaker 2: to make sure that that wasn't, you know, lost in

2161
02:03:49,280 --> 02:03:50,560
Speaker 2: the in the soup.

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Speaker 1: You get the last word, Charlie. I want to thank

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02:03:54,480 --> 02:03:57,960
Speaker 1: you for taking this time with my audience, been very informative.

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Speaker 2: Thanks so much for having me as a present.

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Speaker 1: Till next time. This is Bob LOVESI