WEBVTT - Charlie Hellman 0:00:08.600 --> 0:00:13.480 Welcome, Welcome, Welcome back to Bob Lofstett's podcast. My guest 0:00:13.480 --> 0:00:18.120 today is Charlie Eleman of Spotify. He's the VP Global 0:00:18.160 --> 0:00:21.400 Head of Music Product. What is that in English? 0:00:21.520 --> 0:00:25.759 Charlick English? Yeah, nice to be here, Bob. Head of 0:00:25.840 --> 0:00:28.960 Music Product means I look after our end to end 0:00:29.040 --> 0:00:34.040 music offering, mostly you know, in terms of our services 0:00:34.040 --> 0:00:36.960 to labels and publishers, artists and songwriters, So all the 0:00:37.000 --> 0:00:39.200 tools that they use to get their music on Spotify, 0:00:39.280 --> 0:00:45.400 promote their music, manage their their profiles, and our overall 0:00:45.440 --> 0:00:48.360 policies of running the music vertical for Spotify. 0:00:49.720 --> 0:00:53.479 Okay, what involving music does not come under your purview? 0:00:54.480 --> 0:00:57.880 Well, so David Kafer and I run the music vertical together. 0:00:58.040 --> 0:01:01.760 He manages things like license and sing and artists relations. 0:01:01.960 --> 0:01:04.280 I manage more of the product side, and together we 0:01:04.880 --> 0:01:07.080 co lead the music vertical at Spotify. 0:01:08.319 --> 0:01:13.800 Okay, who would be overseeing the people who create playlists? Yeah? 0:01:13.800 --> 0:01:16.720 The editorial team, the human editorial team is also part 0:01:16.720 --> 0:01:19.520 of the music vertical. They report in to David Kaefer. 0:01:19.800 --> 0:01:22.360 But like I said, the two of us are joined 0:01:22.360 --> 0:01:24.200 at the hip and working on all of that together 0:01:24.280 --> 0:01:24.720 every day. 0:01:25.400 --> 0:01:30.920 Okay. From thirty thousand feet. Yeah, he deals with licensing 0:01:30.959 --> 0:01:34.480 with the labels. Yeah, what do you deal with the labels? 0:01:35.440 --> 0:01:38.520 So, for instance, like our Spotify for Artist product, which 0:01:38.560 --> 0:01:42.120 is how the labels see how they're doing, manage their 0:01:42.160 --> 0:01:44.399 presence on Spotify, promote their music, et cetera. 0:01:46.120 --> 0:01:51.080 Okay, So in terms of ingesting music, yeah, that is 0:01:51.200 --> 0:01:55.280 not your thing. In terms of relationships with music and 0:01:55.400 --> 0:01:58.240 promoting the music from labels, that is your thing. 0:01:58.160 --> 0:02:02.639 That's right. Yeah. I've been at Spotify now for fourteen years, 0:02:02.680 --> 0:02:05.080 so obviously my role has evolved quite a bit over 0:02:05.080 --> 0:02:11.079 the years. But recently my role expanded to being responsible 0:02:11.120 --> 0:02:13.560 for the music vertical overall, which just means as we've 0:02:13.600 --> 0:02:18.639 gone into podcasts and audiobooks, other leaders look after those 0:02:18.720 --> 0:02:22.120 verticals and I try to look after our music proposition 0:02:22.280 --> 0:02:22.480 end in. 0:02:23.720 --> 0:02:27.600 Okay, you talk about the labels, How do you deal 0:02:27.639 --> 0:02:31.799 with independent labels and independent artists? 0:02:32.360 --> 0:02:34.880 Yeah, great question, and that's been something that's evolved a 0:02:34.919 --> 0:02:38.840 ton over the years. As you know. I mean, we 0:02:39.760 --> 0:02:43.280 released our Loud and Clear Report today which you might 0:02:43.280 --> 0:02:49.840 have seen, and in twenty twenty four, fifty percent of 0:02:49.880 --> 0:02:52.920 all of our payouts went to indies, which is just 0:02:52.960 --> 0:02:55.360 a huge sea change from where it was, you know, 0:02:55.440 --> 0:02:59.840 even a decade ago. And so for indies, that spanned 0:03:00.000 --> 0:03:02.440 everything from a do it yourself artist that might be 0:03:02.480 --> 0:03:05.800 coming through distro kid or tune core and they use 0:03:05.840 --> 0:03:08.919 Spotify for artists and manage their profile, you know, run 0:03:08.960 --> 0:03:12.080 their promotions, et cetera, all the way to you know, 0:03:12.080 --> 0:03:14.200 a pretty big indie label that might have a direct 0:03:14.200 --> 0:03:17.320 custom deal with Spotify and kind of everything in between. 0:03:17.680 --> 0:03:20.880 So the range of what is included in indies is 0:03:20.880 --> 0:03:21.440 pretty broad. 0:03:23.320 --> 0:03:26.639 Okay, let's just stay there. Can you tell us more 0:03:26.680 --> 0:03:28.200 about the trends of consumption. 0:03:30.000 --> 0:03:32.160 Yeah, I mean, I think the biggest one that stands 0:03:32.160 --> 0:03:36.680 out to me is that year over year, in addition 0:03:36.760 --> 0:03:39.720 to just payouts growing and the overall size of the 0:03:39.760 --> 0:03:42.600 pie growing, which is great, it's being cut up in 0:03:42.640 --> 0:03:45.520 a lot more ways. They're just a lot more types 0:03:45.560 --> 0:03:49.400 of success stories happening now than we're happening five years 0:03:49.480 --> 0:03:54.600 or ten years ago. So, you know, I think even 0:03:54.640 --> 0:03:57.680 if you go back twenty years, maybe twenty percent of 0:03:58.000 --> 0:04:01.240 plays and downloads we're coming from the top forty songs. 0:04:01.400 --> 0:04:05.160 That's now down to two percent something like that, And 0:04:05.240 --> 0:04:08.240 so things have gotten cut up into a lot smaller 0:04:08.560 --> 0:04:15.160 niches in music, so less top heavy and more kind 0:04:15.160 --> 0:04:19.160 of middle tier artists having sustainable fan bases but might 0:04:19.160 --> 0:04:22.120 not be superstars. I think that's been the biggest shift 0:04:22.240 --> 0:04:25.359 in consumption patterns over the last ten years or so. 0:04:27.560 --> 0:04:32.800 Okay, let's just assume I'm somebody through distro kid yeah 0:04:33.040 --> 0:04:38.080 or CD baby, one of these independent aggregators. Yeah, can 0:04:38.120 --> 0:04:38.760 I touch you? 0:04:40.080 --> 0:04:40.600 What do you mean? 0:04:41.800 --> 0:04:45.360 I would assume if I'm universal, there's a direct pipeline 0:04:45.400 --> 0:04:48.680 between them and you. They have the largest market share. 0:04:48.800 --> 0:04:49.960 Whatever, I see what you mean. 0:04:50.480 --> 0:04:53.000 Let's say that I'm an independent artist. Is there any 0:04:53.080 --> 0:04:55.440 way to interact with someone at Spotify? 0:04:56.440 --> 0:04:59.200 Yeah, we try to have avenues at all different levels 0:04:59.200 --> 0:05:05.039 of scale. So I'll give you an example. Our human 0:05:05.160 --> 0:05:11.080 editorial team. If you go back, you know, say, five 0:05:11.240 --> 0:05:14.400 eight years, a lot of that was through human interaction. 0:05:14.560 --> 0:05:18.280 Like they were getting sent pre release music that was 0:05:18.320 --> 0:05:20.200 going to come out, they were listening to stuff that 0:05:20.240 --> 0:05:24.320 they were getting sent, and you know, they have limited 0:05:24.320 --> 0:05:27.279 hours in the day, right, so they're trying to be 0:05:27.360 --> 0:05:30.279 on top of everything, but they're only exposed to so much. 0:05:31.080 --> 0:05:33.680 So one of the things that we did was through 0:05:33.720 --> 0:05:37.960 Spotify for artists. We launched what we call New Music Submission, 0:05:38.200 --> 0:05:40.919 this playlist pitching tool where everyone, even if you're a 0:05:40.960 --> 0:05:44.839 do it yourself artist, you upload your music and then 0:05:45.080 --> 0:05:46.800 you can tag it with a bunch of stuff, tell 0:05:46.839 --> 0:05:50.479 the story, what instruments are used, you know who's in 0:05:50.520 --> 0:05:53.000 the band, all this kind of stuff, tag it with genres, 0:05:53.200 --> 0:05:56.480 and then that all goes into one workflow for the editors. 0:05:56.520 --> 0:06:00.120 So it doesn't matter if you're from Republic or if 0:06:00.120 --> 0:06:02.719 you're from District Kid. It all comes into one funnel 0:06:03.360 --> 0:06:06.559 and it goes into you know, if you're an indie 0:06:06.640 --> 0:06:08.920 rock editor, you get all the stuff tagged for indie rock, 0:06:08.960 --> 0:06:11.400 and then you you listen to the pre release music 0:06:11.440 --> 0:06:14.159 and try to tag up you know, what's showing promise, 0:06:14.240 --> 0:06:17.080 what we're we're gonna believe in, what we're gonna give 0:06:17.120 --> 0:06:20.440 some editorial love to. And so through things like that, 0:06:20.760 --> 0:06:23.320 we've tried to streamline it. So the levels of access 0:06:23.360 --> 0:06:27.440 are pretty uniform, you know, regardless of the kind of 0:06:27.480 --> 0:06:28.200 label set up the. 0:06:28.360 --> 0:06:33.520 F Let's say I'm an independent artist, I'm through one 0:06:33.560 --> 0:06:36.960 of those aggregators. Yeah, but I have money to spend, 0:06:37.760 --> 0:06:39.960 h Can I immediately get access? Say, well, you know, 0:06:40.320 --> 0:06:43.320 I want certain stuff that you offer the big labels 0:06:43.320 --> 0:06:44.640 because I'm willing to pay for it. 0:06:45.880 --> 0:06:49.520 Yeah, that's another area where we've really streamlined and made 0:06:49.760 --> 0:06:52.880 the same tools accessible for everyone. So there's two types 0:06:52.920 --> 0:07:00.000 of promotional offerings that we offered a labels big and small. 0:07:00.120 --> 0:07:03.520 One is what we call native ads. So these are 0:07:03.560 --> 0:07:06.160 things where if you come into Spotify you might see 0:07:07.200 --> 0:07:10.480 you know, sponsored recommendation or new release and it's featured 0:07:11.120 --> 0:07:14.600 and artists, you know, whether they're on the biggest label 0:07:14.680 --> 0:07:16.600 or they're do it yourself. They can come into Spotify 0:07:16.640 --> 0:07:20.200 for artists and they can book a campaign. They can 0:07:20.240 --> 0:07:25.320 target dormant fans or existing fans or potential listeners, and 0:07:25.360 --> 0:07:27.320 they can use a cash budget for that. You know, 0:07:27.440 --> 0:07:30.760 works very similarly the way a lot of digital advertising works. 0:07:31.120 --> 0:07:34.600 And again because we've launched that in a self serve way, 0:07:34.720 --> 0:07:38.800 everybody has equal access to that. The other program that 0:07:38.800 --> 0:07:42.840 I would argue is even more accessible is Discovery Mode, 0:07:43.200 --> 0:07:47.960 and it's more accessible because it actually requires zero upfront budget. 0:07:48.080 --> 0:07:51.440 So with Discovery Mode, you say, here are my promotional priorities, 0:07:51.520 --> 0:07:53.880 these are the tracks I'm really trying to work. I 0:07:53.920 --> 0:07:58.120 want you to try to find spotify any opportunity for 0:07:58.280 --> 0:08:01.120 this to show up in more relevant place. And I 0:08:01.120 --> 0:08:03.240 don't put in budget on the front end. I accept 0:08:03.280 --> 0:08:05.520 a commission of my royalty rate on the back end 0:08:05.520 --> 0:08:08.520 when you pay me next month. And because it doesn't 0:08:08.560 --> 0:08:12.160 require upfront budget, it really levels the playing field so 0:08:12.200 --> 0:08:14.880 that it doesn't advantage people that have the most you know, 0:08:15.000 --> 0:08:17.119 cash on hand for marketing. But just you know, whatever 0:08:17.160 --> 0:08:20.040 is the most relevant in the system, which you know, 0:08:20.040 --> 0:08:20.840 we're really proud of. 0:08:20.840 --> 0:08:26.680 That, Okay, you know, staying with the independent artists because 0:08:26.680 --> 0:08:30.440 there's not a lot of light on this particular sphere. Yeah, 0:08:30.680 --> 0:08:33.640 I am an independent artist. Let's go with the latter. 0:08:34.360 --> 0:08:39.079 And I say, okay, I am checking in these discovery modes. 0:08:39.720 --> 0:08:44.079 If people listen, I will accept a reduce royalty. Yeah, 0:08:44.120 --> 0:08:46.840 but what are the odds that people are gonna actually 0:08:46.920 --> 0:08:47.760 hear my stuff? 0:08:49.400 --> 0:08:53.000 It performs pretty well. It's it's I think it's been, 0:08:53.240 --> 0:08:58.800 you know, certainly our most successful promotional product today. So 0:08:58.880 --> 0:09:00.640 I can explain a little bit more and detail how 0:09:00.640 --> 0:09:04.559 it works. But generally people say, you know, if you 0:09:04.600 --> 0:09:06.800 look at how many streams you got before putting in 0:09:06.920 --> 0:09:10.079 discovery mode and streams you got after putting in discovery mode, 0:09:10.160 --> 0:09:12.959 typically you're seeing you know, fifty one hundred hundred and 0:09:12.960 --> 0:09:15.720 fifty percent higher royalties because of the lift and streams, 0:09:15.720 --> 0:09:19.840 you get. 0:09:18.120 --> 0:09:23.480 A little bit more granular. Yeah, how does it actually work? Sure? 0:09:23.679 --> 0:09:28.160 Okay, So discovery mode operates in algorithmic playlists. So these 0:09:28.160 --> 0:09:31.640 are things like you know, radio stations or AutoPlay, right, 0:09:32.360 --> 0:09:35.560 and when a radio station is formed, there's two steps 0:09:35.600 --> 0:09:38.880 to this. So first, you know you're making it a 0:09:38.880 --> 0:09:41.840 Dell radio station. There might be three four, five hundred 0:09:41.840 --> 0:09:45.400 songs that are relevant for a Dell radio station. You know, 0:09:45.600 --> 0:09:47.400 Slean Beyond to Beyonce. You could go a lot of 0:09:47.440 --> 0:09:49.680 different ways. So you create a pool of all the 0:09:49.720 --> 0:09:53.360 most hyper relevant stuff. But then you got to sequence 0:09:53.800 --> 0:09:57.520 that playlist, right, like does this user typically like Selean 0:09:57.600 --> 0:10:00.000 theon or do they like Beyonce? What are they famili 0:10:00.080 --> 0:10:01.600 you're with? Or what's going to be more of a 0:10:01.640 --> 0:10:04.520 new discovery for them? You have to have some variations, 0:10:04.600 --> 0:10:06.560 so it's not you know, all Adele in the beginning 0:10:06.600 --> 0:10:08.360 and then all the other stuff, right, So a lot 0:10:08.400 --> 0:10:10.920 of the goodness comes in the sequencing. So the only 0:10:10.960 --> 0:10:15.200 thing that discovery mode does is after the track pool 0:10:15.240 --> 0:10:19.040 has already been set up. It only affects the sequencing, 0:10:19.320 --> 0:10:21.200 So there's maybe fifty or one hundred things that go 0:10:21.200 --> 0:10:25.040 into the sequencing, and discovery mode adds that one more ingredient. 0:10:25.080 --> 0:10:27.600 To say, factor in the fact that you know, this 0:10:27.679 --> 0:10:31.280 is the promotional priority for this artist, and because of that, 0:10:31.600 --> 0:10:35.600 it's going to get sequenced often higher in the list 0:10:35.720 --> 0:10:38.240 than it would have if it were not in discovery mode. 0:10:38.520 --> 0:10:39.240 Does that make sense? 0:10:39.800 --> 0:10:45.400 Yeah, but let's just go even deeper. User creates a 0:10:45.559 --> 0:10:50.720 radio station, Yeah, we'll use your example at Dell. Are 0:10:50.760 --> 0:10:55.000 we saying conventionally there's five hundred tracks or is that 0:10:55.080 --> 0:10:56.480 a number you just used. 0:10:56.559 --> 0:10:59.079 Yeah, it's usually a track pool for radio stations, a 0:10:59.120 --> 0:11:00.480 few hundred tracks. That's about right. 0:11:01.360 --> 0:11:06.200 Okay, there's five hundred tracks. The tracks in that pool 0:11:06.880 --> 0:11:11.840 are based on daddy you got from the listener, uh huh. 0:11:11.920 --> 0:11:17.880 And the rotation because as you said, you don't want 0:11:17.880 --> 0:11:21.840 all adele first in all unknown at the end. How 0:11:22.000 --> 0:11:23.800 is the rotation established? 0:11:24.520 --> 0:11:27.080 So the sequencer it has all these different dimensions to it. 0:11:27.120 --> 0:11:29.280 But it's like we have to have a good mix 0:11:29.320 --> 0:11:31.840 of familiarity and discovery. So some tracks that you're going 0:11:31.880 --> 0:11:33.920 to recognize in some that you don't. We want a 0:11:33.960 --> 0:11:38.760 good diversity of mix of artists. We want to have, 0:11:38.960 --> 0:11:41.560 you know, diversity of old versus new. So a lot 0:11:41.559 --> 0:11:43.760 of different factors go into it, and then discovery mode 0:11:43.800 --> 0:11:46.000 becomes one of those factors that goes into the ordering 0:11:46.040 --> 0:11:46.959 that we give the user. 0:11:47.920 --> 0:11:51.280 Okay, so let's just use your number of five hundred. Yeah, 0:11:51.679 --> 0:11:57.280 how do we decide if my discovery mode track goes 0:11:57.400 --> 0:12:02.080 with the Dell as a post to Deftones, and what 0:12:02.200 --> 0:12:04.600 if everybody wants to be with it? Don't. 0:12:05.040 --> 0:12:07.880 Well, since discovery mode only affects the sequencer, it can 0:12:07.920 --> 0:12:11.240 only move within a trackpool it's already in. You cannot 0:12:11.360 --> 0:12:14.680 use discovery mode to inject a track into a radio 0:12:14.760 --> 0:12:16.600 station that it wouldn't have already been in. The only 0:12:16.640 --> 0:12:20.920 thing it influences is the rank within the track pool. 0:12:21.880 --> 0:12:26.200 Okay, once again, very deep. I upload my stuff, I 0:12:26.320 --> 0:12:30.920 say I want discovery mode. Yeah, how do I know 0:12:31.840 --> 0:12:34.920 what acts and how many acts would I be in 0:12:35.000 --> 0:12:36.280 that pool of tracks? 0:12:36.520 --> 0:12:40.560 So we have these pre campaign analytics for you that 0:12:40.679 --> 0:12:43.520 show you this is where you're at. These are some 0:12:43.559 --> 0:12:47.199 suggestions of what might perform well, and then you can 0:12:47.200 --> 0:12:50.480 take those suggestions or ignore those suggestions. You try something, 0:12:51.080 --> 0:12:54.360 and then you get a report that's like, this is 0:12:54.400 --> 0:12:57.439 the amount of uplift each of these tracks got. These 0:12:57.480 --> 0:13:01.320 ones are ROI positive because they're getting more royalties than 0:13:01.320 --> 0:13:04.640 they did before. These ones. It's not resonating, like we 0:13:05.000 --> 0:13:08.199 tried to give it more spins, but it's not performing 0:13:08.240 --> 0:13:10.760 well and so it's staying flat and so you're accepting 0:13:10.800 --> 0:13:12.520 a discount, but it's not really worth it for you. 0:13:12.600 --> 0:13:14.120 So you get all this reporting and then you make 0:13:14.160 --> 0:13:16.319 adjustments for next month about what you want to try. 0:13:16.480 --> 0:13:17.080 That's different. 0:13:17.800 --> 0:13:19.480 Okay, is it month by month? 0:13:20.080 --> 0:13:22.240 It is month by month, Yeah, because that's the royalty 0:13:22.400 --> 0:13:25.280 reporting cycle, and so it's a good, you know cycle. 0:13:25.000 --> 0:13:29.520 So everybody's on the same month exactly counter month. Okay, 0:13:30.000 --> 0:13:35.040 let's say I'm a complete unknown quote Bob Dylan, do 0:13:35.160 --> 0:13:38.319 I get discovery options. 0:13:38.480 --> 0:13:41.040 For discovery mode? We need the system needs to know 0:13:41.120 --> 0:13:43.920 a bit about you in the algorithm, right, because since 0:13:43.960 --> 0:13:45.960 you have to already be in the track pulls to 0:13:46.200 --> 0:13:48.959 get you know, moving up and moving down, if the 0:13:49.000 --> 0:13:53.520 algorithm has no idea where you're relevant, it can't process 0:13:53.640 --> 0:13:55.559 the track for discovery mode. So you have to have 0:13:55.600 --> 0:14:00.000 some minimum presence in radio stations or algorithm mixes. All right, 0:14:00.640 --> 0:14:03.000 it still means that there's like hundreds of thousands of 0:14:03.480 --> 0:14:06.200 uploaders who have access to the tool. But you can't 0:14:06.240 --> 0:14:07.439 start from absolute zero. 0:14:08.600 --> 0:14:13.120 Okay, so let's just doue them. I'm starting from nothing. Yeah, 0:14:13.200 --> 0:14:18.959 in order to be eligible, is it as simple as 0:14:19.720 --> 0:14:22.800 someone's got to listen to my track or people have 0:14:22.880 --> 0:14:25.760 to listen to my track a thousand times on Spotify? 0:14:25.960 --> 0:14:28.480 How do we create the data that gives us the 0:14:28.520 --> 0:14:30.120 ability to go to discovery mode? 0:14:30.200 --> 0:14:32.240 Yeah, you need some thousands of streams and then you'll 0:14:32.280 --> 0:14:34.960 see in Spotify for artists when the algorithm on the 0:14:35.520 --> 0:14:37.880 radio and mix aside has picked it up enough where 0:14:37.920 --> 0:14:39.280 you're now eligible for it. 0:14:41.000 --> 0:14:45.640 And to be clear, this is all algorithmic radio playlist 0:14:45.680 --> 0:14:48.560 has got nothing to do with curated. 0:14:48.000 --> 0:14:49.120 Playlists, That's right. 0:14:49.120 --> 0:14:49.960 We have. 0:14:51.360 --> 0:14:56.880 Two separate worlds, the man in the machine and for 0:14:57.200 --> 0:15:00.960 editorial playlists like Today's Top Hits, rap CA stuff like that, 0:15:01.080 --> 0:15:03.760 discovery mode has no impact on it whatsoever. It's only 0:15:03.800 --> 0:15:06.040 for kind of the lean back sessions where people are 0:15:06.080 --> 0:15:10.000 open to discovery and like a wide variety of tracks 0:15:10.040 --> 0:15:18.720 where the discovery mode promotion system operates. 0:15:20.520 --> 0:15:26.200 Okay, what percentage of Spotify listening is in lean back mode? 0:15:27.920 --> 0:15:30.480 Well, it's increase over the years, is the algorithms have 0:15:30.520 --> 0:15:33.320 gotten better and better. I think it's grown from ten 0:15:33.400 --> 0:15:37.200 to fifteen towards twenty percent. Is you know, all the 0:15:37.320 --> 0:15:41.360 personalized mixes, algorithmic mixes, auto play radio things like that. 0:15:42.680 --> 0:15:45.680 Okay, let's say I create a radio station with Dell. 0:15:46.200 --> 0:15:50.760 We understand that, Yeah, but also Spotify serves me a 0:15:50.800 --> 0:15:55.160 lot of algorithmic playlist to me. Yeah. If an act 0:15:55.160 --> 0:15:59.640 signs up for discovery mode, will it potentially be placed there? 0:16:00.440 --> 0:16:02.560 The types of mixes that it's in are kind of 0:16:02.600 --> 0:16:04.440 the lean back mixes. So these could be things like 0:16:04.640 --> 0:16:07.320 daily mix We usually make a user five or six 0:16:07.440 --> 0:16:10.400 daily mixes that are each of the users what we 0:16:10.480 --> 0:16:14.520 call taste clusters or artists mix Like, here's a mix 0:16:14.600 --> 0:16:20.040 of you know, adele like music for you, genre mixes, 0:16:20.280 --> 0:16:23.080 you know, hip hop for you, those kind of mixes. 0:16:25.040 --> 0:16:32.600 Let's just say I'm using Discovery Mode and I get traction. Yeah, 0:16:32.760 --> 0:16:36.239 let's just say, for the sake of discussion, my royalty 0:16:36.320 --> 0:16:40.400 pool is increased. What are my options after I get traction? 0:16:41.640 --> 0:16:46.440 Well, I mean usually what we see is obviously artists 0:16:46.520 --> 0:16:50.520 are doing a bunch of different things across a bunch 0:16:50.520 --> 0:16:53.080 of different platforms at the same time to try to 0:16:53.080 --> 0:16:56.400 build buzz. So usually it's combining maybe native ads and 0:16:56.440 --> 0:17:00.920 discovery mode on Spotify, but then also you know, organic 0:17:01.200 --> 0:17:03.280 interest that they're trying to drum up on social media, 0:17:03.360 --> 0:17:07.679 maybe paid advertising on social media as well. It's even 0:17:07.720 --> 0:17:10.960 as you get bigger and bigger sponsorship out of home, 0:17:11.000 --> 0:17:14.640 et cetera. So it's usually part of a broader picture. 0:17:15.840 --> 0:17:19.120 But typically, you know, like what we see is if 0:17:19.160 --> 0:17:22.479 you get traction and you see something's really resonating. One 0:17:22.560 --> 0:17:24.480 of the things that's really cool about discovery mode is 0:17:24.480 --> 0:17:26.520 it's kind of like a heat seeker where it will 0:17:26.920 --> 0:17:29.639 route someone to say, oh, if that thing's resonating really well, 0:17:29.880 --> 0:17:32.200 I wasn't thinking about that one being the next single 0:17:32.240 --> 0:17:34.960 that I'm really promoting. But maybe I'm gonna change the 0:17:34.960 --> 0:17:37.159 plan a little bit, put a bit more emphasis on 0:17:37.240 --> 0:17:39.639 that because it seems to be having, you know, some 0:17:39.840 --> 0:17:40.840 kind of grounds well. 0:17:41.440 --> 0:17:45.080 Wait, wait, a lot of stuff going on there. If 0:17:45.119 --> 0:17:49.920 I'm in discovery mode and I have enough traction such 0:17:50.000 --> 0:17:56.000 that you're doing it, yeah, do I pick a specific 0:17:56.200 --> 0:17:59.560 track or do you take it from a pool of tracks? 0:17:59.600 --> 0:18:00.600 How does that work? 0:18:00.800 --> 0:18:03.720 So an artist could come in or their label, you know, 0:18:03.760 --> 0:18:06.240 if you're if you're doing it at that scale, and 0:18:06.280 --> 0:18:08.479 they could put one track into discovery mode, or they 0:18:08.480 --> 0:18:10.880 could put eight tracks. You know, it's up to them 0:18:11.480 --> 0:18:13.760 how pointed they want to be with it and tactical 0:18:13.840 --> 0:18:16.639 versus more broad and using the tool. 0:18:17.840 --> 0:18:22.439 So let's just assume that I'm gaining traction. What is 0:18:22.480 --> 0:18:25.159 the next level I'm eligible for? 0:18:25.600 --> 0:18:31.919 Its Spotify Well, I mean hopefully the way that we 0:18:31.960 --> 0:18:36.439 see it working organically is signals kind of pick up 0:18:36.440 --> 0:18:38.760 and ladder on each other. So if you're doing well 0:18:38.760 --> 0:18:41.000 in radio, then the algorithm's going to notice that and 0:18:41.040 --> 0:18:45.199 start putting you more and more in other contexts. On 0:18:45.280 --> 0:18:47.840 the editor's dashboards, they're going to see, oh, you know, 0:18:47.920 --> 0:18:49.960 the save rate on this thing is super high. Everyone 0:18:49.960 --> 0:18:51.920 that listens to it wants to save it, so they're 0:18:51.920 --> 0:18:55.680 going to consider it more for things when we're thinking 0:18:55.720 --> 0:18:59.840 about artists to partner with, you know, a radar artist 0:18:59.920 --> 0:19:01.600 or some of the programs that we do to build 0:19:01.680 --> 0:19:04.640 artist brands. It all kind of feeds into the better 0:19:04.680 --> 0:19:07.399 a track is performing. All those opportunities start, you know, 0:19:07.480 --> 0:19:08.440 opening up for ours. 0:19:09.640 --> 0:19:12.119 Let's be very clear, this is a business of hype 0:19:12.119 --> 0:19:17.880 and bullshit. Okay, let's assume I have some traction. They're 0:19:17.920 --> 0:19:21.160 gonna be people who try to make contact with you, 0:19:21.359 --> 0:19:24.480 who are gonna spin a story. I'm gonna be on television, 0:19:24.560 --> 0:19:27.520 I'm selling tickets, et cetera, et cetera. How do you 0:19:27.560 --> 0:19:29.080 separate the week from the chat? 0:19:30.040 --> 0:19:31.840 Yeah, I mean we see it a lot. I think 0:19:32.359 --> 0:19:35.480 there are things that spike, and then there are things 0:19:35.480 --> 0:19:38.040 that have staying power, and I think we've gotten pretty 0:19:38.080 --> 0:19:42.760 good at especially when things are in our programming or 0:19:42.880 --> 0:19:45.840 editorial programming or algorithmic programming. You kind of see it 0:19:45.880 --> 0:19:48.520 in the data, right, Like when someone listens to the song, 0:19:49.560 --> 0:19:51.480 how often do they go back to it next week? 0:19:51.560 --> 0:19:53.320 How often do they save it and make it one 0:19:53.400 --> 0:19:55.520 of the things in their playlist, how often they sharing 0:19:55.560 --> 0:19:59.520 it with friends? You can't really fake that stuff in 0:19:59.600 --> 0:20:02.720 terms of the response you're getting from real human beings. 0:20:02.760 --> 0:20:05.560 And so you might get some noise in the data 0:20:05.760 --> 0:20:08.840 from something having like a meme moment on TikTok or 0:20:09.280 --> 0:20:12.760 you know, getting featured somewhere, but it's pretty easy for 0:20:12.840 --> 0:20:15.080 us to see what's gonna kind of stick with it 0:20:15.160 --> 0:20:16.119 and have staying power. 0:20:17.680 --> 0:20:23.119 Okay, I'm clicking boxes for discovery mode. Yeah, let's just 0:20:23.200 --> 0:20:27.080 assume I continue to have more and more success. At 0:20:27.080 --> 0:20:29.080 what point do I talk to a human being? 0:20:31.440 --> 0:20:33.240 Well, I mean I don't. I don't say this to 0:20:33.280 --> 0:20:35.800 say we don't want to talk to artists and levels 0:20:35.800 --> 0:20:36.439 we talk to artisans. 0:20:36.640 --> 0:20:39.080 Listen, I don't want to talk to people. I'd rather 0:20:39.160 --> 0:20:42.520 deal with email, whatever, So continue. 0:20:42.080 --> 0:20:44.040 You know, It's just the point I'm trying to make is, 0:20:46.160 --> 0:20:49.840 you know, the music ecosystem is pretty small, right, like 0:20:49.920 --> 0:20:53.520 this industry. It's a small industry and relationships matter. I 0:20:53.560 --> 0:20:56.760 don't want to like deny that, but at the same time, 0:20:57.400 --> 0:20:59.960 I think it's been good for the industry that more 0:21:00.040 --> 0:21:01.960 and more is done on the basis of, you know, 0:21:02.000 --> 0:21:04.239 how is something actually performing and how's it resonating with 0:21:04.280 --> 0:21:06.359 fans more so than who you know and who you're 0:21:06.400 --> 0:21:09.320 connected to. So we try to make it so the 0:21:09.359 --> 0:21:11.879 top of the mountain isn't about getting to talk to 0:21:11.920 --> 0:21:15.760 someone you know. It shouldn't require you having a friend 0:21:16.160 --> 0:21:19.920 in the company, so that's not really all roads don't 0:21:20.000 --> 0:21:22.280 lead to And then you have a meeting with Spotify 0:21:22.359 --> 0:21:24.719 or hopefully our systems are working so that you can 0:21:24.760 --> 0:21:26.760 get a lot done and it doesn't have to be 0:21:26.800 --> 0:21:28.320 about a human relationship. 0:21:29.920 --> 0:21:36.240 But after I'm in discovery mode and it's working, I 0:21:36.480 --> 0:21:40.520 just have to have faith that editorial and it's going 0:21:40.560 --> 0:21:43.080 to work me. You know. 0:21:43.119 --> 0:21:45.280 I think it's about having faith, but it's also about 0:21:45.440 --> 0:21:49.640 look For most artists that are really trying to do 0:21:49.680 --> 0:21:52.399 this and they're trying to get out on tour and 0:21:52.440 --> 0:21:55.679 they're trying to have fans that maybe support them with 0:21:55.880 --> 0:21:59.600 merch or become someone that's going to be a genuine supporter. 0:22:00.119 --> 0:22:03.040 It's about taking people from being light listeners maybe I 0:22:03.119 --> 0:22:06.679 hear you in radio, to being high intent listeners like 0:22:06.720 --> 0:22:10.560 I'm searching for you and I'm playing you to a 0:22:10.640 --> 0:22:14.000 real follower and supporter where I'm you know, buying things, 0:22:14.200 --> 0:22:17.119 and so we try to kind of flow those tools together. 0:22:17.240 --> 0:22:20.119 So let's say you have good success on discovery mode, 0:22:20.240 --> 0:22:21.920 then you can go in and buy a native ads 0:22:21.920 --> 0:22:23.919 campaign that says, I want to target people that have 0:22:24.119 --> 0:22:27.480 only ever heard me on programming but have never put 0:22:27.520 --> 0:22:29.280 me in their library. Can you put me in front 0:22:29.280 --> 0:22:31.680 of them? And then we want to say all right 0:22:31.720 --> 0:22:35.360 now you've got some high intent listeners, Let's put your 0:22:35.400 --> 0:22:37.600 show and your concert listing in front of them. And 0:22:38.240 --> 0:22:40.800 that's kind of the beautiful flow when it works really well, 0:22:40.920 --> 0:22:44.320 is going from discovery mode low intent, native ads high intent, 0:22:44.359 --> 0:22:46.920 and now you start having your concert listings or your 0:22:46.960 --> 0:22:49.680 merch and you start, you know, not only getting very 0:22:49.720 --> 0:22:52.520 material royalties, and I'm sure we'll talk about you know, 0:22:52.760 --> 0:22:54.919 sizeable royalties that are getting paid out, but also other 0:22:55.000 --> 0:22:57.760 revenue streams that you can drive by having those you know, 0:22:57.880 --> 0:22:59.200 high intent fans on Spotify. 0:23:00.080 --> 0:23:04.560 Okay, when you talk about AD, you're not talking about 0:23:04.600 --> 0:23:09.320 the free tier. You're talking about information that would be 0:23:09.400 --> 0:23:14.840 served up to subscribers. You're right, yes, and that information 0:23:15.359 --> 0:23:18.680 might be tour dates, might be merch anything else. 0:23:19.920 --> 0:23:22.040 So it could be content like here's a new release 0:23:22.080 --> 0:23:23.800 from an artist that you might have heard in a 0:23:23.960 --> 0:23:27.360 radio station. It could be like you said, concerts merch. 0:23:28.440 --> 0:23:30.359 And where would the user see that? 0:23:31.080 --> 0:23:34.879 Well, our main products are called Marquee, which is like 0:23:36.240 --> 0:23:39.520 when you open the app, if there's a relevant new 0:23:39.520 --> 0:23:42.439 release for you, you'll see a big screen when you 0:23:42.480 --> 0:23:45.760 open the app announcing the new release, usually on release day, 0:23:46.080 --> 0:23:49.560 and then we have a second format called Showcase, which 0:23:49.600 --> 0:23:51.639 is essentially a home shelf. You know how we have 0:23:51.720 --> 0:23:54.520 the shelves on home with different content recommendations. It's a 0:23:54.560 --> 0:23:57.280 sponsored shelf where you can feature not only a new release, 0:23:57.280 --> 0:23:59.240 but it could be a catalog, anniversary or kind of 0:23:59.240 --> 0:24:01.480 anything that you want to promote. 0:24:01.680 --> 0:24:08.760 Okay. Previous Spotify reports have said the most active listeners 0:24:09.200 --> 0:24:13.720 pick and choose their music as opposed to listening to playlists. 0:24:14.280 --> 0:24:15.240 Is that accurate? 0:24:15.720 --> 0:24:19.760 Well, I mean, it's certainly true that almost every user 0:24:19.840 --> 0:24:25.919 does both. So you know, users that are heavily engaged 0:24:27.080 --> 0:24:30.159 often have their own playlists and they're curating stuff for themselves, 0:24:30.840 --> 0:24:32.480 your favorite songs that you want to go back to 0:24:32.600 --> 0:24:36.240 over and over. But the vast, vast majority of users 0:24:36.280 --> 0:24:39.360 also have habits with our programming. Maybe they love hot 0:24:39.400 --> 0:24:43.440 country or they love their daily mix too. The healthiest 0:24:43.520 --> 0:24:47.560 users on Spotify have the most diverse habits. They listen 0:24:47.600 --> 0:24:49.400 to us on their phone and the card, they listen 0:24:49.400 --> 0:24:53.640 to programming and you know, the DJ, and they do 0:24:53.920 --> 0:24:56.280 a jam with their friends. Like, the more different parts 0:24:56.320 --> 0:24:58.520 of Spotify you're using, the more you're going to retain, 0:24:58.600 --> 0:25:00.760 the more you're gonna keep paying for your subscription. 0:25:02.280 --> 0:25:07.960 Okay, what is happening musically on Spotify? After all, we 0:25:08.000 --> 0:25:10.960 hear all this top line stuff. It's a hip hop world. 0:25:11.040 --> 0:25:11.720 Rock is dying. 0:25:11.880 --> 0:25:15.880 What is going on genre wise? You mean yes, well, 0:25:16.000 --> 0:25:19.480 you know earlier I said more nichefication. I think that's 0:25:19.520 --> 0:25:23.600 definitely true. But I think probably like the biggest trend 0:25:23.640 --> 0:25:27.480 that I see is how global. Those trends have been 0:25:28.000 --> 0:25:33.800 so regional Mexican music, K pop, afro pop, you know, 0:25:35.240 --> 0:25:39.840 music has gotten so global across the world, and now 0:25:39.840 --> 0:25:44.080 we're at a place where artists get the majority of 0:25:44.119 --> 0:25:48.440 their royalties from outside their home country. A third of 0:25:48.520 --> 0:25:49.320 artists get more than. 0:25:49.359 --> 0:25:51.760 Who wha wha, wha wha A little bit slower. Yeah, 0:25:52.000 --> 0:25:55.960 all artists around the world, both in small countries and 0:25:56.040 --> 0:25:59.760 in large markets US, Germany and UK, get most of 0:25:59.800 --> 0:26:02.280 their royalties outside their home country. 0:26:02.520 --> 0:26:07.720 The average is that the majority of an artist's royalties 0:26:07.720 --> 0:26:09.120 come from outside their home country. 0:26:10.000 --> 0:26:13.160 Okay, I interrupted, you continue, Yeah. 0:26:12.960 --> 0:26:15.280 So just to say I think that I think we've 0:26:15.320 --> 0:26:18.400 gone from a global music market that was a lot 0:26:18.440 --> 0:26:21.480 more western centric and it's you know, these kind of 0:26:21.520 --> 0:26:24.080 radio stations on Terrestra radio that fit into a certain 0:26:24.080 --> 0:26:27.760 format to a lot more niche genres, and a lot 0:26:27.800 --> 0:26:31.919 of those genres are driven outside the West, but are 0:26:31.960 --> 0:26:33.480 becoming really popular globally. 0:26:35.119 --> 0:26:38.160 Okay, we have the Spotify Top fifty, that's the most 0:26:38.240 --> 0:26:42.840 dominant chart in the world. It does not seem to 0:26:42.920 --> 0:26:47.440 have niche ification if you look down the road. Are 0:26:47.480 --> 0:26:50.119 these other niches going to grow or is that always 0:26:50.160 --> 0:26:52.520 going to be separate from the pool at large? 0:26:52.760 --> 0:26:54.080 I think so. I mean, when you look at the 0:26:54.080 --> 0:26:56.080 top fifty on Spotify, you gotta remember that's a little 0:26:56.119 --> 0:26:58.800 bit of a reflection of where our users are. But 0:26:58.920 --> 0:27:01.960 as India has become a bigger and bigger area of 0:27:02.400 --> 0:27:05.240 usage for Spotify, you see more and more music from 0:27:05.240 --> 0:27:07.800 India charting, and I think we're just going to see 0:27:07.800 --> 0:27:12.359 that as we've become more popular in Africa across Asia. 0:27:12.840 --> 0:27:14.720 I certainly think you're going to see that on the 0:27:14.760 --> 0:27:15.720 global chart. 0:27:16.800 --> 0:27:20.840 Okay, let's regional. Are we going to see an Americana 0:27:20.960 --> 0:27:22.920 act in the Spotify Top fifteen? 0:27:25.080 --> 0:27:28.600 I mean, I think that because of the fact that 0:27:28.880 --> 0:27:31.880 the way music is breaking is so different now. I mean, 0:27:32.400 --> 0:27:36.080 you know, like I said, in the nineties, you kind 0:27:36.119 --> 0:27:38.560 of had to fit into a certain set of radio formats. 0:27:38.600 --> 0:27:41.000 There are no rules now, Like, you can be whatever 0:27:41.040 --> 0:27:42.640 kind of music you want. You don't need to brand 0:27:42.680 --> 0:27:45.560 yourself with a specific genre or whatever. And if you 0:27:45.680 --> 0:27:48.040 have a fan base that's resonating with what you're doing 0:27:48.080 --> 0:27:50.399 because of your personality or the way you relate to 0:27:50.440 --> 0:27:53.119 them or whatever, you can grow. And so because of that, 0:27:53.160 --> 0:27:56.000 I think it's possible for really any type of music 0:27:56.040 --> 0:27:59.280 to break through. Like I yeah, I don't think there 0:27:59.280 --> 0:28:01.000 are really any rules boundaries anymore. 0:28:02.240 --> 0:28:06.840 Just going sideways for a second to what did we 0:28:07.320 --> 0:28:12.520 to tracks start on social media primarily TikTok and crossover, 0:28:13.480 --> 0:28:18.000 or start on Spotify, or start on TikTok and not crossover. 0:28:18.560 --> 0:28:21.719 Yeah, look, I mean we certainly see all of the above. 0:28:22.840 --> 0:28:28.720 I think typically, Well, let me divide into two types 0:28:28.760 --> 0:28:33.919 of tracks, just to massively oversimplify, there's two types of tracks. 0:28:33.960 --> 0:28:37.760 There's tracks that follow like a typical historical pattern, which 0:28:37.800 --> 0:28:40.960 is your biggest week is your opening week. You come 0:28:41.000 --> 0:28:43.880 out hot out of the gate, all the attention, and 0:28:43.880 --> 0:28:46.800 then slowly over time you kind of plateau and fade out. 0:28:46.960 --> 0:28:50.920 That's like one path that a track can have. A 0:28:50.960 --> 0:28:55.320 second type of path that we see is what I 0:28:55.360 --> 0:28:58.000 would think about as a momentum track, it gets released, 0:28:58.480 --> 0:29:00.560 it's kind of sitting there and then all of a 0:29:00.600 --> 0:29:02.800 sudden it gets picked up by something. It's in a 0:29:02.920 --> 0:29:07.760 Netflix show, it's in a TikTok trend whatever, and now 0:29:07.760 --> 0:29:09.800 it starts surging out of nowhere and it has this 0:29:09.880 --> 0:29:12.920 kind of big hill out of nowhere. So I think 0:29:12.960 --> 0:29:15.720 in terms of tracks that really spike on Spotify, it 0:29:15.800 --> 0:29:18.400 might be fifty to fifty ish in terms of the 0:29:18.440 --> 0:29:22.120 first pattern versus the second pattern. Typically for the first 0:29:22.160 --> 0:29:24.760 pattern tracks they really break first on Spotify, you see 0:29:24.760 --> 0:29:27.120 them spike out of the gate. They're getting you know, 0:29:27.560 --> 0:29:30.000 presence on playlists, and then they start getting picked up 0:29:30.040 --> 0:29:33.880 elsewhere in the world. For the second time of track, 0:29:34.240 --> 0:29:36.560 usually streaming is a little bit behind, maybe you know, 0:29:36.600 --> 0:29:38.440 a couple of days or a week after it's trending 0:29:38.480 --> 0:29:40.840 on social it starts, you know, we see the signals 0:29:40.840 --> 0:29:42.640 in the search algorithm and stuff, and it starts getting 0:29:42.640 --> 0:29:46.240 picked up by Spotify. But to your point about not sticking, 0:29:47.200 --> 0:29:49.640 you know, a lot of the stuff that is a 0:29:49.680 --> 0:29:53.320 trending sound to the background of a social media video 0:29:53.720 --> 0:29:55.479 isn't the stuff that people want to have in their playlist, 0:29:55.560 --> 0:29:59.200 and it doesn't actually you know, linger or really catch 0:29:59.240 --> 0:30:02.400 on were genuine music streaming. It's just, you know, a 0:30:02.440 --> 0:30:04.120 trend in a different sense. 0:30:11.800 --> 0:30:18.280 Okay. As you said, today, Spotify released its annual economics report. Well, 0:30:18.280 --> 0:30:21.040 those who haven't read it, can you give us some 0:30:21.160 --> 0:30:22.840 highlights for sure? 0:30:22.880 --> 0:30:26.040 I mean, to me, I would boil it down to 0:30:26.080 --> 0:30:31.640 two big things. First, the total pie continues to grow 0:30:31.680 --> 0:30:36.880 and grow and grow, which is great. I started in 0:30:36.880 --> 0:30:40.520 the music industry two thousand and eight to twenty fourteen, 0:30:40.560 --> 0:30:43.680 and every year it was how much are we going down? 0:30:43.960 --> 0:30:45.720 So I don't take it for granted that every year, 0:30:45.760 --> 0:30:49.000 you know, the industry grows. It's fantastic that total payouts 0:30:50.120 --> 0:30:52.200 in total revenues to the industry are going up and 0:30:52.280 --> 0:30:56.600 up and up every year. It's clear that streaming has 0:30:56.600 --> 0:30:58.480 gotten people to pay for music more and more and 0:30:58.520 --> 0:31:00.920 more people are coming out to the idea that paying 0:31:00.920 --> 0:31:04.080 for music every month is a great service, which is awesome. 0:31:04.160 --> 0:31:07.239 So ten billion with a B in total payouts from 0:31:07.280 --> 0:31:12.640 Spotify in twenty twenty four ten x growth from where 0:31:12.640 --> 0:31:14.680 we were in twenty fourteen. We paid out one billion 0:31:14.680 --> 0:31:17.880 in twenty fourteen. Ten billion in twenty twenty four the 0:31:17.920 --> 0:31:21.880 most that any retailer has ever paid to the music industry, 0:31:22.120 --> 0:31:24.880 So that's awesome. The total pie is growing. Second big 0:31:24.880 --> 0:31:31.040 thing that stands out is it's getting divided and shared 0:31:31.080 --> 0:31:33.680 in by more and more types of artist success stories. 0:31:34.040 --> 0:31:38.040 So the number of artists that are getting ten thousand 0:31:38.040 --> 0:31:40.800 dollars in payouts per year, one hundred thousand dollars in 0:31:40.800 --> 0:31:43.600 payouts per year, five million dollars in payouts per year, 0:31:43.720 --> 0:31:47.000 all those have tripled in the last seven years. So 0:31:47.360 --> 0:31:51.200 the number of artists seeing you know, meaningful amounts of 0:31:51.400 --> 0:31:55.240 royalty payouts is growing faster than the total pie is growing, 0:31:55.240 --> 0:31:57.200 which just means that we're finding more and more ways 0:31:57.240 --> 0:32:03.479 to program different types of artists to audiences and that's working. 0:32:03.680 --> 0:32:06.480 Fifty percent of payouts going to indies. That was never possible, 0:32:06.560 --> 0:32:08.920 you know, in the previous way that the industry works. 0:32:08.920 --> 0:32:11.080 So those are the two big things that stand out 0:32:11.120 --> 0:32:14.080 to me, total pie growth and then how it's getting 0:32:14.120 --> 0:32:16.000 shared by more and more types of artists. 0:32:17.520 --> 0:32:21.960 Can you give us, you know, this may be two minute, 0:32:22.480 --> 0:32:24.960 Can you give us a couple of stories of people 0:32:24.960 --> 0:32:27.600 were making a lot of money that I mean obviously 0:32:27.720 --> 0:32:30.280 Lady Gaga, Brude marsh and making a lot of money, 0:32:30.760 --> 0:32:34.440 but something domestic. We're speaking in English where people will 0:32:34.520 --> 0:32:36.920 be surprised how much money these people are making. 0:32:38.280 --> 0:32:39.920 Yeah, it's a good question. I don't know, you know, 0:32:39.920 --> 0:32:43.920 if I should owe any one artists specific payouts. But 0:32:44.040 --> 0:32:48.560 you know, actually I was just talking to there's a 0:32:48.600 --> 0:32:51.480 guy on our team who's employed by Spotify, but he 0:32:51.880 --> 0:32:54.520 does music with his band still as a side gig, 0:32:54.680 --> 0:32:56.360 and so we were looking at his stuff because I'm 0:32:56.360 --> 0:32:57.800 allowed to talk about him because he works here. I 0:32:57.840 --> 0:33:03.160 don't need to ask his permission. So they're bandy, you know, 0:33:03.160 --> 0:33:05.280 they all have jobs, but they put out music on 0:33:05.320 --> 0:33:09.840 the side still. They have maybe around one hundred thousand 0:33:09.840 --> 0:33:14.800 monthly listeners, a few million streams. They're generating about fifteen 0:33:15.040 --> 0:33:21.080 thousand dollars a year in payouts from Spotify, and so 0:33:21.640 --> 0:33:25.200 you know that's probably they're yeah, probably some something like 0:33:25.240 --> 0:33:29.720 the eighty thousand, you know, highest earning artists, and Spotify 0:33:29.720 --> 0:33:32.800 by no means is this like you know, their day job. 0:33:32.840 --> 0:33:34.480 But it just like gives you an example of the 0:33:34.600 --> 0:33:38.440 types of that type of success story wasn't really even 0:33:38.440 --> 0:33:40.520 a thing twenty years ago. So I thought that was cool, 0:33:40.600 --> 0:33:42.200 just as an example of what's possible. 0:33:43.640 --> 0:33:48.560 Okay, since your tenure at Spotify, there's been a change 0:33:49.120 --> 0:33:53.240 where you have to reach a certain threshold to get 0:33:53.360 --> 0:33:59.680 royalties at all. Yeah, what percentage of tracks reach that threshold? 0:33:59.800 --> 0:34:05.680 So ninety nine point five percent of tracks by stream 0:34:05.680 --> 0:34:12.160 share monetize. But the reason that we established that threshold is, 0:34:13.239 --> 0:34:15.919 you know, if I back up for a second, most 0:34:15.920 --> 0:34:18.160 of what we try to do every day grow the 0:34:18.200 --> 0:34:20.760 pie because it grows our revenues and it grows payouts 0:34:20.760 --> 0:34:25.879 to the industry. Right, very very infrequently, you can find 0:34:25.880 --> 0:34:28.399 a way to shift the payout that you're already doing 0:34:28.440 --> 0:34:30.440 around to get people paid more. But that's what we 0:34:30.520 --> 0:34:33.640 found with this. For tracks that were generating less than 0:34:33.680 --> 0:34:35.640 a thousand streams in the last year, on average, they 0:34:35.680 --> 0:34:40.680 were generating three cents in payouts. So that means if 0:34:40.680 --> 0:34:43.200 you went into your aggregator account and said I want 0:34:43.200 --> 0:34:46.239 to withdraw my three cents, you couldn't even do it 0:34:46.239 --> 0:34:49.120 because it's below the threshold of the fee to withdraw 0:34:49.160 --> 0:34:53.600 your money. Right and so literally, if you add up 0:34:53.640 --> 0:34:57.440 all those pennies of millions of uploaders generating a few pennies, 0:34:58.440 --> 0:35:02.479 we were allowed fifty one hundred million dollars to sit 0:35:03.719 --> 0:35:06.799 just between couch cushions getting wasted, and that seemed like 0:35:06.800 --> 0:35:09.640 a real missed opportunity. We had gotten so big that 0:35:09.640 --> 0:35:11.799 that amount of waste in the system seemed like a 0:35:11.920 --> 0:35:16.520 miss So we established a threshold to say, you know, 0:35:16.600 --> 0:35:19.520 until a track has one thousand streams the last twelve months, 0:35:19.600 --> 0:35:23.960 it doesn't generate royalties. That allows all the tracks that 0:35:24.160 --> 0:35:28.440 are generating royalties to get half a percent more payout, 0:35:28.480 --> 0:35:30.960 so it increases all of their payouts. Spotify makes no 0:35:31.680 --> 0:35:34.920 additional money by this policy. It just shifts the revenue 0:35:34.960 --> 0:35:39.959 to people that can actually withdraw their money. And because 0:35:40.000 --> 0:35:41.680 of that, we eliminated waste in the system and we're 0:35:41.680 --> 0:35:44.040 able to get everyone who's doing this a little bit 0:35:44.040 --> 0:35:45.760 more seriously paid a little bit more money. 0:35:47.280 --> 0:35:52.319 Okay. Spotify is the largest player in streaming market, just 0:35:52.360 --> 0:35:57.480 like anybody who's the largest player, there's blowback. In addition, 0:35:57.640 --> 0:36:01.040 streaming is a different paradigm than it will in the 0:36:01.080 --> 0:36:06.760 pre Internet era. Is this just something that the public 0:36:06.840 --> 0:36:11.000 doesn't understand it needs to adjust to or what would 0:36:11.000 --> 0:36:12.160 your response. 0:36:11.760 --> 0:36:16.400 Be, Yeah, I mean it depends on the type of 0:36:16.400 --> 0:36:19.960 blowback you're talking about. I see it all, but you know, 0:36:20.040 --> 0:36:24.000 the one type that I see is it was better 0:36:24.040 --> 0:36:27.200 in the good old days. You know, everyone was making 0:36:27.239 --> 0:36:29.719 more money in the good old days. And I don't 0:36:29.800 --> 0:36:34.279 understand that. I haven't seen any data that at any 0:36:34.400 --> 0:36:38.239 point in music history we're artists making more money than 0:36:38.280 --> 0:36:41.480 they are now. I was looking at in loud and 0:36:41.520 --> 0:36:47.080 clear this year, if you were the one hundred thousandth 0:36:47.760 --> 0:36:52.560 most popular artists on Spotify last year, he generated six 0:36:52.600 --> 0:36:56.560 thousand dollars from Spotify, And usually, you know, Spotify is 0:36:56.600 --> 0:36:58.880 about a quarter of what you make from recorded revenue, 0:36:58.920 --> 0:37:01.480 so maybe you're making twenty twenty five thousand in total 0:37:01.520 --> 0:37:04.719 if you were one hundred thousandth most popular artists on 0:37:04.760 --> 0:37:08.000 Spotify in twenty twenty four. In two thousand and four, 0:37:08.280 --> 0:37:11.640 one hundred thousandth most popular artist was making six hundred 0:37:11.680 --> 0:37:14.640 dollars from Spotify. So it's ten x and in two 0:37:14.719 --> 0:37:17.680 thousand four, if I go back ten years, additionally, there 0:37:17.760 --> 0:37:18.279 was no Just. 0:37:18.200 --> 0:37:20.200 To be clear, because I think you missbooked, you're about 0:37:20.200 --> 0:37:21.040 twenty fourteen. 0:37:21.800 --> 0:37:24.879 Sorry, Yeah, So twenty twenty four it was generating six 0:37:24.880 --> 0:37:28.680 thousand dollars. Twenty fourteen it was generating six hundred dollars. 0:37:28.840 --> 0:37:30.399 And if I go back to two thousand and four. 0:37:30.520 --> 0:37:33.200 Ten years earlier, there was no such thing as the 0:37:33.200 --> 0:37:36.520 one hundred thousandth most popular commercial artists. The record stores 0:37:36.520 --> 0:37:39.600 did not have one hundred thousand different artists in it, 0:37:39.640 --> 0:37:42.839 so that didn't exist. They cut their demo, they didn't 0:37:42.840 --> 0:37:45.080 get signed, no thank you, you're out of the game. 0:37:45.120 --> 0:37:48.120 They weren't even allowed to play. So we've gone from 0:37:48.800 --> 0:37:51.800 you can't be in the game to you can generate 0:37:51.800 --> 0:37:55.560 a couple hundred dollars to you know, twenty twenty five 0:37:55.560 --> 0:37:58.680 thousand dollars a year from recorded revenue. Not that it's like, okay, 0:37:58.760 --> 0:38:01.239 quit everything, this is your but that's the kind of 0:38:01.320 --> 0:38:03.719 progress that makes it hard for me to understand how 0:38:03.719 --> 0:38:05.759 you could look at this and say anything other than 0:38:07.080 --> 0:38:09.759 the industry is so much healthier now than it's been 0:38:09.840 --> 0:38:13.560 at any point in its history. Maybe, you know, if 0:38:13.600 --> 0:38:17.279 you're a top ten, top twenty act and less of 0:38:17.320 --> 0:38:19.680 the streams, less of the attention goes to you, maybe 0:38:19.680 --> 0:38:24.120 it's it's, you know, a weaker phase of music industry 0:38:24.680 --> 0:38:28.000 at that tip of the iceberg. But in terms of 0:38:28.040 --> 0:38:31.400 the total revenue getting paid to artists, in terms of 0:38:31.440 --> 0:38:34.719 the number of artists achieving meaningful amounts of royalties or 0:38:34.760 --> 0:38:39.000 meaningful amounts of success. There's just no denying the fact 0:38:39.080 --> 0:38:42.359 that there's more you know, success now than there's ever been. 0:38:42.400 --> 0:38:44.640 So to me, this is the good old days of 0:38:45.080 --> 0:38:48.880 the music industry. And that's probably the criticism that confuses 0:38:48.920 --> 0:38:52.640 me the most of you know, streaming doesn't pay and 0:38:52.680 --> 0:38:54.440 we are so much better off in the CD era. 0:38:54.520 --> 0:38:56.520 I've just never seen a number or a fact to 0:38:56.600 --> 0:39:00.080 support that way of looking at it. 0:39:00.360 --> 0:39:07.360 Okay, how about all the people who say my track 0:39:07.520 --> 0:39:11.439 was streamed a million dollar a million times, but I'm 0:39:11.480 --> 0:39:12.280 getting buck. 0:39:12.080 --> 0:39:17.439 Gis, Yeah, totally, you know. One of the tough things 0:39:17.480 --> 0:39:22.040 that's it's hard to wrap your head around this. One 0:39:22.120 --> 0:39:26.480 point four million tracks on Spotify have gotten a million 0:39:26.480 --> 0:39:30.839 streams for more. It's just there's a lot of streams, right, 0:39:30.920 --> 0:39:34.840 So if if your track gets a million streams, it 0:39:34.840 --> 0:39:38.640 means you're in the top one point four million tracks 0:39:39.400 --> 0:39:45.080 last year. But just a million streams doesn't mean what 0:39:45.120 --> 0:39:49.600 it used to in terms of total popularity. So I 0:39:49.840 --> 0:39:55.520 think a lot of times when people are frustrated about payouts, 0:39:55.520 --> 0:39:57.640 and it's from maybe an artist that you haven't heard 0:39:57.719 --> 0:40:00.440 of before, or they haven't kind of built their brand. 0:40:00.960 --> 0:40:02.879 A lot of it is just the laws of popularity. 0:40:02.920 --> 0:40:06.080 Like you and I could record a song today and 0:40:06.080 --> 0:40:08.640 we could put it up on Spotify. There's twelve million 0:40:08.640 --> 0:40:11.879 people who have uploaded. Are we gonna have a hit? 0:40:12.360 --> 0:40:12.640 You know? 0:40:12.719 --> 0:40:16.000 It's the odds are stacked against us. So it just 0:40:16.600 --> 0:40:21.000 requires that much more popularity to break through today because 0:40:21.000 --> 0:40:23.880 there's hundreds of millions of people streaming, and there's trillions 0:40:23.920 --> 0:40:26.680 of streams every year, and so what might have seemed 0:40:26.719 --> 0:40:29.479 like a big number in a downloads era just really 0:40:29.520 --> 0:40:31.520 isn't the same in the streaming era. 0:40:33.600 --> 0:40:37.640 However, there are people, especially in the UK, keep saying, oh, 0:40:37.680 --> 0:40:40.160 you're putting out an artist out of business, they can't 0:40:40.160 --> 0:40:40.800 make a living. 0:40:43.920 --> 0:40:46.040 I just don't know if it's supported by facts, like 0:40:46.080 --> 0:40:51.720 I hear the anecdotes that you're talking about. But every 0:40:52.000 --> 0:40:54.520 single piece of data that I see is that there's 0:40:54.880 --> 0:40:57.880 more revenue being paid to artists that support more people 0:40:57.920 --> 0:41:01.439 being able to afford living through music than there were 0:41:01.840 --> 0:41:04.799 ten years ago or twenty years ago. I mean ten 0:41:04.880 --> 0:41:09.320 years ago the total industry had gotten to a bottom 0:41:09.360 --> 0:41:12.520 of thirteen fourteen billion, and now we're going to be 0:41:12.560 --> 0:41:18.240 over in the thirties. In total revenues for recorded music, 0:41:18.640 --> 0:41:20.919 So there's no doubt that more is being paid out. 0:41:22.040 --> 0:41:24.640 We are one hundred percent transparent with how we pay 0:41:24.640 --> 0:41:27.440 out and to who. No one's been more transparent than us, 0:41:27.719 --> 0:41:31.200 And so there are occasions I'm sure where money is 0:41:31.239 --> 0:41:33.279 getting lost in the pipes or it's not reaching the 0:41:33.320 --> 0:41:35.239 right hands. I don't want to diminish any of that, 0:41:36.120 --> 0:41:41.040 but overall, I think it to me, there's no denying 0:41:41.040 --> 0:41:43.839 the data that the industry is more healthy and more 0:41:43.840 --> 0:41:45.879 people are making a living for music than there were 0:41:45.880 --> 0:41:46.919 at any previous era. 0:41:48.520 --> 0:41:54.040 Okay, today, how many tracts are being uploaded a day 0:41:54.120 --> 0:41:55.360 or a week or a month. 0:41:57.080 --> 0:42:00.000 Yeah, I know it's in the tens of thousands, maybe 0:42:00.040 --> 0:42:01.319 towards one hundred thousand a day. 0:42:01.320 --> 0:42:08.839 I think now, Okay, you said something earlier that Spotify 0:42:09.200 --> 0:42:16.080 represents twenty five percent, one quarter of overall recorded music revenues. 0:42:17.000 --> 0:42:18.600 Where's the other three quarters? 0:42:19.360 --> 0:42:22.719 Well, I think in terms of let's see, I think 0:42:22.719 --> 0:42:26.680 in terms of streaming revenue, that's about that's become about 0:42:26.719 --> 0:42:30.320 eighty percent of the business now and we're about thirty 0:42:30.320 --> 0:42:34.920 five forty percent of that. And then outside of streaming, 0:42:35.000 --> 0:42:39.080 you know, you've got vinyl and CD and inside streaming 0:42:39.160 --> 0:42:42.839 you have essentially Spotify's competitors. 0:42:43.600 --> 0:42:49.560 Okay, you know the big competitors domestically are Apple and Amazon. 0:42:50.280 --> 0:42:54.560 Are we considering streaming people who are listening for free 0:42:54.640 --> 0:42:57.360 on YouTube also which pays? But I just want to 0:42:57.400 --> 0:42:58.520 know in the overall pie. 0:42:58.920 --> 0:43:02.600 Yeah, when we look at total recorded revenues for the industry, 0:43:03.239 --> 0:43:06.920 paid streaming is the biggest driver. Free streaming AD supported 0:43:06.960 --> 0:43:11.200 streaming from Spotify and YouTube is the second biggest, and 0:43:11.239 --> 0:43:15.120 then you know everything after that is pretty small, digital downloads, 0:43:15.120 --> 0:43:15.479 et cetera. 0:43:16.520 --> 0:43:20.000 To what degree do you personally pay or the company 0:43:20.080 --> 0:43:23.480 also pay attention to your competitors. Let me start on 0:43:23.520 --> 0:43:26.400 a gross level. Yeah, if you ever say, wait a second, 0:43:26.440 --> 0:43:28.760 something else has happened in there, we have to follow 0:43:28.800 --> 0:43:29.719 that trend. 0:43:29.960 --> 0:43:32.239 I think for the most part, you know, we've been 0:43:32.280 --> 0:43:37.160 more of a leader for the fact that this is 0:43:37.239 --> 0:43:39.279 really all we focus on, you know, like this is 0:43:39.320 --> 0:43:42.520 our whole business. If streaming music doesn't work for us, 0:43:42.560 --> 0:43:44.680 we don't work, like we have to make this work. 0:43:44.800 --> 0:43:47.399 So we focus a lot on how can we make 0:43:47.440 --> 0:43:50.600 the most valuable service that we possibly can so that 0:43:50.640 --> 0:43:53.640 more people pay for a music subscription so that we 0:43:53.640 --> 0:43:56.080 grow revenues and we grow payouts. We have to be 0:43:56.120 --> 0:43:58.359 obsessed with that. We don't have any other We don't 0:43:58.400 --> 0:44:01.200 have a cloud business or a you know, of books 0:44:01.239 --> 0:44:05.120 business or a hardware business to subsidize this thing. It 0:44:05.120 --> 0:44:06.760 has to work on its own. So I think because 0:44:06.760 --> 0:44:09.000 of that, we've been really focused. We've invested a ton 0:44:09.719 --> 0:44:12.359 in innovation of the product and R and D, you know, 0:44:12.480 --> 0:44:15.080 to be in front and have what I'm biased, but 0:44:15.160 --> 0:44:17.440 I think clearly the best consumer experience. 0:44:19.400 --> 0:44:24.640 It's a collegial small business. Do the other big companies 0:44:24.719 --> 0:44:28.640 have someone like you? Do you know them? To what 0:44:28.800 --> 0:44:32.640 degree is their infrastructure akin to yours? 0:44:33.600 --> 0:44:36.239 Yeah, it is a small ecosystem, and I think that, 0:44:36.320 --> 0:44:41.000 like you know, as much as we are competitors, I 0:44:41.040 --> 0:44:45.880 genuinely mean this. There's what It's somewhere between five hundred 0:44:45.880 --> 0:44:50.080 and six hundred million people paying for music music subscription 0:44:50.160 --> 0:44:53.920 around the world. Now there's seven eight billion people in 0:44:53.920 --> 0:44:58.720 the world. The big picture here is music is part 0:44:58.760 --> 0:45:02.160 of every single human being's life. There is still a 0:45:02.200 --> 0:45:05.640 ton of growth to get all of the world paying 0:45:05.680 --> 0:45:11.880 for streaming music, and so if other companies are finding 0:45:11.920 --> 0:45:15.640 ways to do that, I genuinely believe it's a good 0:45:15.640 --> 0:45:19.480 thing because that brings them into this market, and I 0:45:19.520 --> 0:45:22.279 think Spotify is the best product and so ultimately it's 0:45:22.320 --> 0:45:26.680 going to win that market. But that's like the big 0:45:26.920 --> 0:45:31.839 picture journey that we're on. I remember when I joined 0:45:31.880 --> 0:45:35.920 Spotify in twenty eleven, and you know, there's like industry 0:45:35.960 --> 0:45:39.120 analysis reports and they were like, the total addressable market 0:45:39.200 --> 0:45:42.520 for a paying music subscription, we think is between three 0:45:42.560 --> 0:45:44.880 to five million or you know, and Spotify was at 0:45:44.920 --> 0:45:49.319 nine hundred thousand subscribers. The big picture why the pie 0:45:49.400 --> 0:45:51.840 is growing, why there's more revenue in the industry, is 0:45:51.880 --> 0:45:56.480 we got hundreds of millions of people to pay for music. 0:45:56.600 --> 0:45:59.959 So I'm cheerleading everybody that's trying to make that happen. 0:46:00.080 --> 0:46:05.240 And because of that, you know, I try to take inspiration. 0:46:05.320 --> 0:46:07.920 There's a lot of Spotify alumni who've gone to YouTube, 0:46:07.920 --> 0:46:10.400 We've gone to Apple, We've gone to Amazon and built 0:46:10.440 --> 0:46:13.160 out similar things there, you know, Amazon Music for artists 0:46:13.280 --> 0:46:16.480 or similar tools that what we're doing, and I think 0:46:16.480 --> 0:46:17.480 that is a great thing. 0:46:25.120 --> 0:46:30.320 What do you say to people who say Spotify pays 0:46:30.400 --> 0:46:31.600 less per stream. 0:46:33.040 --> 0:46:38.879 Well, it's a it's a totally bogus ridiculous concept. There 0:46:38.920 --> 0:46:41.160 is no such thing as a There is no such 0:46:41.160 --> 0:46:45.080 thing as a per play rate, and this is probably 0:46:45.120 --> 0:46:50.520 the most misunderstood concept in the music industry. The thing 0:46:50.560 --> 0:46:53.080 that probably bothers me the most is when people in 0:46:53.120 --> 0:46:56.960 the music industry who fully know that it's bullshit and 0:46:57.040 --> 0:46:59.000 still talk about it as if it's a real thing 0:46:59.000 --> 0:47:01.120 because it serves their narraor. But there is no such 0:47:01.160 --> 0:47:05.279 thing as a per play rate. The reason that there's 0:47:05.280 --> 0:47:07.080 no such thing as a per play rate is because 0:47:07.160 --> 0:47:10.759 no consumer pays per play that they do, you know, 0:47:10.840 --> 0:47:16.400 they pay per month. So every music subscription pays the 0:47:16.400 --> 0:47:19.279 same way. We all charge the same retail price, and 0:47:19.320 --> 0:47:21.600 we all take our music revenues and pay two thirds 0:47:21.600 --> 0:47:25.320 of it to labels and publishers. Every music streaming service 0:47:25.360 --> 0:47:29.319 does that exactly the same way. So then if we're 0:47:29.320 --> 0:47:31.440 all paying, if we're all doing the same retail price, 0:47:31.640 --> 0:47:34.240 and we're all paying out two thirds of that retail revenue, 0:47:34.600 --> 0:47:40.480 why is the revenue per play higher in some streaming 0:47:40.560 --> 0:47:45.719 services than others. The reason is that on other streaming services, 0:47:46.120 --> 0:47:51.080 people play a lot fewer streams. So if you only 0:47:51.239 --> 0:47:54.080 use your service to play one track in a month, 0:47:54.680 --> 0:47:57.120 you got a per play rate of ten dollars. Congratulations, 0:47:57.120 --> 0:48:00.880 that looks amazing. If you use the service a lot 0:48:01.080 --> 0:48:03.480 and you're streaming thousands or tens of thousands of times 0:48:03.520 --> 0:48:07.760 a month, the effective quote unquote per play rate goes down. 0:48:08.080 --> 0:48:12.000 The only problem is if you look at what is 0:48:12.040 --> 0:48:17.360 the biggest predictor of churn of stopping paying for music, 0:48:17.920 --> 0:48:22.480 the biggest predictor of churn is low usage of the service. 0:48:22.560 --> 0:48:25.560 So if you play five times a month or ten 0:48:25.600 --> 0:48:28.360 times a month, it makes your per play rate look amazing, 0:48:29.360 --> 0:48:31.439 and then next month you're probably canceling your description because 0:48:31.480 --> 0:48:34.000 you get no value from the thing. So all of 0:48:34.040 --> 0:48:36.080 the you know, anyone in the industry you're saying, we 0:48:36.120 --> 0:48:38.399 got to get the per play rates up. It's it's 0:48:38.480 --> 0:48:40.640 literally backwards for what we need to be trying to 0:48:40.680 --> 0:48:42.600 do as an industry. We need to be trying to 0:48:42.640 --> 0:48:46.719 get people to engage more in their service so that 0:48:46.760 --> 0:48:50.359 they're willing to pay more when we raise prices, that 0:48:50.400 --> 0:48:54.080 they retain better. And so you know, if a service 0:48:54.120 --> 0:48:56.279 has a lot of dormant accounts, you know, you sign 0:48:56.320 --> 0:48:59.319 up with your phone carrier, but you never actually use 0:48:59.320 --> 0:49:02.719 it, it makes your per play ray look amazing, but it's 0:49:02.880 --> 0:49:06.080 it's totally a distraction, and it's opposite from what the 0:49:06.120 --> 0:49:09.600 industry needs to be focused on. So it's so frustrating 0:49:09.680 --> 0:49:10.880 misunderstood in the industry. 0:49:12.560 --> 0:49:17.920 Okay, what is the demo of subscriber of Spotify compared 0:49:18.040 --> 0:49:19.800 to Apple and Amazon. 0:49:20.160 --> 0:49:22.120 It's younger, and it's more global. 0:49:24.520 --> 0:49:26.920 And it is also more active. Correct. 0:49:27.719 --> 0:49:28.960 Yeah, I mean, I don't know if you could call 0:49:28.960 --> 0:49:31.640 that a demo, but way more active. I think, on average, 0:49:31.680 --> 0:49:32.920 probably about twice as active. 0:49:34.280 --> 0:49:39.480 Okay. I was with a twenty something yesterday actually three 0:49:39.560 --> 0:49:43.480 days ago, and she said she subscribed to Apple Music, 0:49:44.640 --> 0:49:48.479 which shocked me. Okay, they're out there not getting into 0:49:48.520 --> 0:49:54.160 my own personal feelings about this. Let's just assume someone 0:49:54.239 --> 0:49:56.919 is listening and they don't have a subscription at all 0:49:57.040 --> 0:50:00.399 or there with a rival service, Why should would they 0:50:00.400 --> 0:50:02.640 be subscribing to Spotify instead. 0:50:03.560 --> 0:50:06.319 I'm like, in a live pitch them. Yeah, oh this 0:50:06.400 --> 0:50:10.200 is exciting. Well, I think you know, typically the things 0:50:10.239 --> 0:50:12.440 that we see people calling out is the reason that 0:50:12.440 --> 0:50:17.160 they come to Spotify or switch to Spotify is personalization. 0:50:17.680 --> 0:50:19.200 You know, all the mixes that we make for you, 0:50:19.400 --> 0:50:21.239 the way that the service kind of wraps around your 0:50:21.280 --> 0:50:23.840 taste and get to know you. The second is ubiquity, 0:50:23.920 --> 0:50:27.279 Like we've put in fifteen years into making sure run 0:50:27.480 --> 0:50:30.719 every speaker, every TV, every car, wherever you are you 0:50:30.719 --> 0:50:34.120 can get Spotify to work. That's a big part of it. 0:50:35.520 --> 0:50:37.640 And then recently, I think a lot of the investments 0:50:37.680 --> 0:50:41.799 that we've been making into kind of product innovation, being 0:50:41.800 --> 0:50:43.480 able to have a jam with your friends where you 0:50:43.520 --> 0:50:46.960 can all cue songs together, the DJ feature where you 0:50:47.000 --> 0:50:50.080 have someone giving you context about the music, and you know, 0:50:50.120 --> 0:50:54.480 serving recommendations. I think all those things have felt like 0:50:54.520 --> 0:50:57.040 you're getting a little bit more value from this service 0:50:57.080 --> 0:50:59.239 than maybe other places. 0:51:00.000 --> 0:51:05.839 Okay, there was a recent book that analyze Spotify and 0:51:06.000 --> 0:51:11.319 said there were tracks created and that these tracks were 0:51:11.320 --> 0:51:16.000 created mostly in lean back music. We're taking away royalties 0:51:16.000 --> 0:51:19.040 from the overall pool. Can you tell us about that? 0:51:20.280 --> 0:51:25.239 Not true? Spotify creates zero tracks period. Every track that's 0:51:25.280 --> 0:51:29.960 on Spotify comes from a third party, a licenser, which 0:51:30.040 --> 0:51:32.840 is a label or a distributor. They distribute us tracks. 0:51:33.680 --> 0:51:36.560 We publish and program the tracks, so we do not 0:51:36.719 --> 0:51:40.040 make our own music, and we do not like pad 0:51:40.120 --> 0:51:43.040 our service with you know, Spotify's own tracks. 0:51:43.760 --> 0:51:47.799 How about different royalty rates for different companies, like a 0:51:47.920 --> 0:51:52.839 music factory who's creating work for hire. Some guy comes in, 0:51:53.160 --> 0:51:57.720 creates an atmospheric track. They put these into a pile 0:51:57.800 --> 0:52:01.799 of let's say twenty five thousand tracks. You say, okay, 0:52:02.360 --> 0:52:05.600 we'll program that, but we'll pay you a lesser royalty. 0:52:06.160 --> 0:52:10.880 So we never say we'll program that period. But we've 0:52:11.040 --> 0:52:14.360 never said in a deal you give us this and 0:52:14.400 --> 0:52:16.640 we'll program it that. That's not a quid pro quo 0:52:16.760 --> 0:52:20.759 that we would ever do. If you're asking, would we 0:52:20.800 --> 0:52:25.960 pay the same royalty rate for uh SPA background music 0:52:25.960 --> 0:52:29.799 as Kendrick Lamar, of course, I think any sane person 0:52:29.840 --> 0:52:34.360 would assume we're not paying the same rate for forests, 0:52:34.960 --> 0:52:37.600 you know, wind sounds as we are for you know, 0:52:37.680 --> 0:52:41.000 the top acts in the world. That's always been the 0:52:41.080 --> 0:52:43.200 case in the history of the music industry. You have 0:52:43.200 --> 0:52:45.719 your production music in the bargain bin, you've got the 0:52:45.800 --> 0:52:48.520 hits that have a higher wholesale rate. There's I don't 0:52:48.520 --> 0:52:51.560 think anyone would be surprised by that. But as far 0:52:51.600 --> 0:52:56.080 as background music, it's really been an emergent behavior of 0:52:56.120 --> 0:52:59.560 the access model. Like what I mean by that is 0:53:01.160 --> 0:53:04.640 there weren't a lot of people buying White Noise CDs 0:53:04.840 --> 0:53:07.799 in the nineties, Are you really going to you know, 0:53:08.640 --> 0:53:11.040 pay eight dollars to have that CD on hand for 0:53:11.080 --> 0:53:12.799 when you want to listen to white Noise? Probably not, 0:53:13.160 --> 0:53:16.239 but in the access model and streaming where you've already 0:53:16.239 --> 0:53:19.040 paid your monthly subscription, but you want to have you know, 0:53:19.120 --> 0:53:22.040 your our meditation session, or you want to have the 0:53:22.080 --> 0:53:24.920 background noise so you're you know, toddler can take a nap. 0:53:25.120 --> 0:53:27.680 It's become you know, it's become an important use case 0:53:27.680 --> 0:53:31.560 to some people. It exists as an important playlisting category. 0:53:31.600 --> 0:53:34.920 For us, it's been pretty consistent out of around one 0:53:34.920 --> 0:53:40.680 to two percent of plays over the last decade. It 0:53:40.680 --> 0:53:43.000 probably is about one to two percent of what we 0:53:43.040 --> 0:53:44.880 think about day to day. It's Spotify, it's not a 0:53:44.960 --> 0:53:50.919 huge part. And so there's no you know, uh, there's 0:53:50.920 --> 0:53:55.239 no scheme, there's no I don't really know where the 0:53:55.280 --> 0:53:58.120 myths and the controversy come from, but it's sort of 0:53:58.200 --> 0:54:00.759 a natural evolution of having access to anything you want 0:54:00.800 --> 0:54:04.160 that these kind of use cases become something that people do. 0:54:05.560 --> 0:54:09.879 How do you decide which tracks get a lower royalty rate? 0:54:10.640 --> 0:54:13.080 Well, I mean everything is a negotiation. So if you're 0:54:13.080 --> 0:54:17.839 doing a deal with a production music company that specializes 0:54:17.920 --> 0:54:19.920 and by the way, some of them are very good 0:54:20.280 --> 0:54:23.279 at doing this really well. Like you have to make 0:54:23.320 --> 0:54:27.759 the music. I think boring is probably the right word, Like, 0:54:28.360 --> 0:54:31.960 don't distract the user when they're trying to meditate with vocals. 0:54:32.000 --> 0:54:34.000 It's got to kind of just recede into the background 0:54:34.000 --> 0:54:37.000 and be as like unnoticeable as possible. So I don't 0:54:37.040 --> 0:54:39.320 want to diminish the skill that it takes to create 0:54:39.360 --> 0:54:43.440 a great production library. It's it is certainly valuable. But 0:54:43.480 --> 0:54:45.640 if you're negotiating with that type of label, obviously the 0:54:45.680 --> 0:54:47.279 mechanics of that are going to be different than if 0:54:47.320 --> 0:54:50.480 you're negotiating with someone that drives a lot of their 0:54:50.520 --> 0:54:52.560 own demand that you know people are going to search 0:54:52.760 --> 0:54:56.160 for that artist. It's not something that you know it's 0:54:56.239 --> 0:54:58.279 just going to be a use case kind of music, 0:54:58.320 --> 0:55:00.320 but people actually care about that artists and going to 0:55:00.360 --> 0:55:01.239 search it out. 0:55:02.480 --> 0:55:07.360 Okay, it's mostly in the jazz soft jazz world. Artist 0:55:07.400 --> 0:55:09.920 you're saying, I put in all my effort I create 0:55:10.000 --> 0:55:15.480 this and and to save money. Spotify is programming stuff 0:55:15.480 --> 0:55:19.320 that's more from one of these music factories instead. 0:55:20.520 --> 0:55:23.279 You know, from what we see. They just don't. They're 0:55:23.320 --> 0:55:26.399 just not substitutional. Period. So, like, I'm a jazz fan, 0:55:27.480 --> 0:55:29.920 and there are times that I seek out jazz and 0:55:29.960 --> 0:55:32.600 I look for John Scholfield or Pamathany or I'm you know, 0:55:33.000 --> 0:55:35.759 I'm looking for music because I care that I'm listening 0:55:35.840 --> 0:55:37.840 to jazz. And then there's other times where I just 0:55:37.840 --> 0:55:40.560 want background music. I don't think that you can get 0:55:41.000 --> 0:55:43.520 someone who would be interested in jazz to be like, 0:55:43.800 --> 0:55:45.440 don't you want to meditate right now? Or don't you 0:55:45.440 --> 0:55:47.640 want to sleep right now? It's up to the user, 0:55:48.400 --> 0:55:50.880 you know, what need they have. So it's just not 0:55:51.000 --> 0:55:54.040 a viable idea to say, oh, let's take someone that 0:55:54.080 --> 0:55:58.080 would be looking for, you know, what's the latest in jazz, 0:55:58.160 --> 0:56:01.359 or let me go listen to Pamathany and instead give them, 0:56:02.000 --> 0:56:05.000 you know, background production music. It just doesn't work like that. 0:56:06.120 --> 0:56:11.640 Okay, are there any companies that makes soft jazz that 0:56:11.719 --> 0:56:14.319 you have an overall deal with that you pay less to? 0:56:15.880 --> 0:56:18.000 I don't know if any of the production music, I 0:56:18.040 --> 0:56:20.000 don't know how much it goes into soft jazz or 0:56:20.040 --> 0:56:22.800 if it's more the white noise kind of baby sleep 0:56:23.520 --> 0:56:28.640 nature sounds side of it. I'm sure there's some blurring 0:56:28.719 --> 0:56:31.040 of the edges, but what I can tell you is 0:56:31.080 --> 0:56:33.799 that for any of these playlists, like if you look 0:56:33.840 --> 0:56:41.480 at our noise meditation or our relaxation playlists or whatever, 0:56:41.840 --> 0:56:44.480 the people you know, just so you see what it 0:56:44.480 --> 0:56:46.960 looks like on the inside. Within the company, the people 0:56:46.960 --> 0:56:53.120 who are responsible for programming that playlist, they are accountable 0:56:53.239 --> 0:56:57.560 to that playlist performing the best with consumers. So they 0:56:57.600 --> 0:56:59.279 need to go in and say, every time I add 0:56:59.280 --> 0:57:03.759 some of the playlist, people skip less and they stream more, 0:57:04.280 --> 0:57:07.040 and so they need to put the stuff in it 0:57:07.120 --> 0:57:09.000 that is the best. That is their incentive is to 0:57:09.000 --> 0:57:12.080 program it with the you know, the content that people 0:57:12.120 --> 0:57:15.480 want for that use case or or for that playlist. 0:57:15.520 --> 0:57:17.960 They're not asked to, you know, do it from here 0:57:18.080 --> 0:57:19.360 or do it from there. They're asked to put the 0:57:19.400 --> 0:57:21.440 best stuff in there that's going to perform best for 0:57:21.440 --> 0:57:23.440 the user, because that's what gets people to retain in 0:57:23.480 --> 0:57:26.440 their subscription and grows our revenue. 0:57:26.760 --> 0:57:33.120 Okay, you're out there, you're somewhere, you're at dinner, you're 0:57:33.160 --> 0:57:36.360 at a show, you're at a party, and it comes 0:57:36.400 --> 0:57:41.920 out you work at Spotify. How do people react well? 0:57:42.800 --> 0:57:48.800 For the most part, people who are not in the 0:57:48.920 --> 0:57:54.880 music industry have lovely things to say about Spotify because 0:57:55.160 --> 0:57:58.040 from a consumer standpoint, it's been life changing. You know, 0:57:58.400 --> 0:58:01.400 like I feel like I get a amazing surplus of value. 0:58:01.440 --> 0:58:02.960 I get to listen to anything in the world. Your 0:58:02.960 --> 0:58:05.240 playlists are amazing. When I talk to people who are 0:58:05.240 --> 0:58:08.120 in the music industry, they have lots more interesting things 0:58:08.160 --> 0:58:09.800 to ask me about, you know, how do I get 0:58:09.840 --> 0:58:15.040 on playlists? And how do your royalty rates work? And 0:58:15.320 --> 0:58:17.040 all sorts of stuff. But you know, if you're talking 0:58:17.040 --> 0:58:19.640 about just day to day interactions, I think people have been, 0:58:21.040 --> 0:58:24.160 you know, overjoyed about the way that Spotify plays in 0:58:24.200 --> 0:58:27.919 their life, how it's soundtracked different moments of their life, 0:58:27.960 --> 0:58:30.440 the role it plays with the time they spend with 0:58:30.480 --> 0:58:32.520 their kids. I mean, that's really one of the things 0:58:32.520 --> 0:58:36.200 that has kept me at Spotify for now fourteen years, 0:58:36.320 --> 0:58:40.200 is like there's just so few products that have one 0:58:40.440 --> 0:58:43.760 a real role in people's lives, you know, that is 0:58:43.840 --> 0:58:46.560 used by so many different people, but two in kind 0:58:46.600 --> 0:58:50.400 of a I would argue, like a purely positive way. 0:58:50.480 --> 0:58:53.160 You know, you don't hear parents say I got to 0:58:53.160 --> 0:58:55.400 get my kid to spend less time with Spotify. I 0:58:55.400 --> 0:58:58.040 think more time that people spend with Spotify, whether it's 0:58:58.120 --> 0:59:01.960 you know, podcasts or music, it's you know, it's enriching, 0:59:02.000 --> 0:59:06.520 it's making your life. I don't know better in some ways, 0:59:06.560 --> 0:59:08.840 you don't feel like, oh that hour that I just 0:59:08.880 --> 0:59:12.200 spent has kind of robbed me of something or made 0:59:12.240 --> 0:59:14.840 me feel worse or something. So you know, that's usually 0:59:14.840 --> 0:59:16.880 what I hear about from most folks. 0:59:17.520 --> 0:59:21.760 Okay, we've covered Indie. Tell me about your relationship with 0:59:21.840 --> 0:59:24.160 the three major labels in large independence. 0:59:26.760 --> 0:59:32.120 Well, I think that right now our relationship with the 0:59:32.160 --> 0:59:35.160 industry is probably the healthiest it's been. I mean, look, 0:59:35.200 --> 0:59:37.360 in an industry like ours, you're always going to have 0:59:37.440 --> 0:59:41.040 your debates d jure about what's going on in the 0:59:41.040 --> 0:59:45.640 industry and things that you can argue about. But in 0:59:45.680 --> 0:59:50.000 a world where our incentives are so aligned, we all 0:59:50.040 --> 0:59:51.440 want to get more people in the world to pay 0:59:51.480 --> 0:59:53.240 for music. We all want to figure out how to 0:59:53.400 --> 0:59:56.400 raise prices in a way that's going to maximize revenue. Together, 0:59:56.480 --> 0:59:58.640 we all want to figure out a way to add 0:59:58.680 --> 1:00:00.680 more value to the subscription and so that we can 1:00:00.720 --> 1:00:04.600 add more tiers or things like that. The conversations that 1:00:04.680 --> 1:00:08.800 I feel like we're in day to day, we're more aligned, 1:00:08.840 --> 1:00:11.080 you know, we want the same things. Of course, there's 1:00:11.080 --> 1:00:12.760 always going to be things to figure out, but you know, 1:00:12.760 --> 1:00:14.760 if you talk about the state of those relationships, I 1:00:14.760 --> 1:00:17.440 think they're you know, they're as good as I've ever 1:00:17.440 --> 1:00:20.240 seen them. Being at Spotify for the last fourteen years. 1:00:21.560 --> 1:00:25.920 How often do you speak with people from the major labels? 1:00:28.240 --> 1:00:29.439 Definitely a few times a month. 1:00:31.160 --> 1:00:35.520 Okay, you're saying you could talk to someone from Innerscope 1:00:35.640 --> 1:00:38.520 once a month, three times a month. 1:00:39.080 --> 1:00:43.840 Well, in my role, I typically am interfacing more with 1:00:43.920 --> 1:00:46.240 people who are in the central corporate teams and the 1:00:46.240 --> 1:00:50.280 major labels more so than the frontline labels. The frontline 1:00:50.320 --> 1:00:52.920 labels have teams they can work with at Spotify on 1:00:53.760 --> 1:00:55.600 this is the new release coming from this artist. We 1:00:55.640 --> 1:00:57.080 want to give you heads up about it. We want 1:00:57.080 --> 1:00:59.040 to get prepared how we're going to partner around it. 1:00:59.040 --> 1:01:01.720 That's you know, that's that's less of my day to. 1:01:01.760 --> 1:01:05.440 Day just staying on that. Yeah, lessons daity, how does 1:01:05.480 --> 1:01:06.520 that actually work? 1:01:08.320 --> 1:01:15.880 Well? I mean, as you know, so much of a 1:01:15.960 --> 1:01:18.600 new releases promotional cycle now has shifted to the pre 1:01:18.680 --> 1:01:24.560 release phase, building hype, teasing it, getting people excited about it. 1:01:25.160 --> 1:01:29.120 And one of the ways that Spotify and markets its 1:01:29.160 --> 1:01:35.720 service is in collaboration with artists. So we try to 1:01:35.800 --> 1:01:39.680 do co marketing with artists that not only attract attention 1:01:39.760 --> 1:01:42.520 to them, but might be the reason that someone joined 1:01:42.560 --> 1:01:45.400 Spotify for the first time. Like if you're sixteen and 1:01:45.520 --> 1:01:51.360 you see, oh, here's chaperone advertisement with Spotify, I want 1:01:51.360 --> 1:01:53.560 to make sure I get that new release on release day, 1:01:53.600 --> 1:01:56.240 and that could be the reason that you join Spotify. 1:01:56.320 --> 1:01:58.640 So a lot of times you try to coordinate, you know, 1:01:58.680 --> 1:02:01.440 sort of co marketing together around a new release. 1:02:02.680 --> 1:02:07.120 Well what about people who say that Spotify is run 1:02:07.160 --> 1:02:11.480 presently streaming in general's run present like radio, where the 1:02:11.560 --> 1:02:16.640 majors have a dominant relationship in market share and mind share. 1:02:18.160 --> 1:02:21.240 Every data point says the exact opposite thing. I mean, 1:02:22.840 --> 1:02:27.640 if you're if the assertion is that the majors dominate 1:02:27.680 --> 1:02:31.240 more than ever before, that's certainly not what we're seeing, right. 1:02:31.280 --> 1:02:34.280 We're seeing more share go to indies than ever before. 1:02:34.360 --> 1:02:37.840 We're seeing more DIY success than ever before. So I 1:02:37.920 --> 1:02:40.240 don't I haven't seen any data to support the idea 1:02:40.280 --> 1:02:43.880 that the industry is getting more and more dominated by 1:02:44.120 --> 1:02:44.840 major labels. 1:02:45.880 --> 1:02:49.360 Okay, it is a relationship business. I personally know people 1:02:49.400 --> 1:02:53.080 who have relationships with people at Spotify and work them 1:02:53.120 --> 1:02:57.120 on records. Yeah, somebody who's in Timbuctoo's got a record 1:02:57.280 --> 1:03:01.840 doesn't have that relationship. Relationship must pay dividends. 1:03:02.800 --> 1:03:05.840 Well, I think so if we separate two things, we 1:03:05.880 --> 1:03:08.800 talk about marketing, we talk about playlisting. Earlier I talked 1:03:08.840 --> 1:03:12.919 about our playlist pitching system where we've tried to make 1:03:13.000 --> 1:03:16.520 as level of a playing field as possible, and so 1:03:16.560 --> 1:03:18.680 it's not about who can get in the building and 1:03:18.720 --> 1:03:21.880 play their record on a stereo. It's it all comes 1:03:21.880 --> 1:03:24.480 through the same tool. People evaluate it with their headphones on. 1:03:24.560 --> 1:03:26.760 They decide, you know, our editors decide what they want 1:03:26.760 --> 1:03:28.520 to get behind. So that's one piece of it. And 1:03:28.560 --> 1:03:32.880 then on the co marketing side, we are our interest 1:03:32.880 --> 1:03:38.520 is in partnering with artist brands where they're bringing something 1:03:38.520 --> 1:03:41.560 to the table, an audience, an excitement, right, and so 1:03:41.840 --> 1:03:44.200 when we see that, it can be from any angle. 1:03:44.200 --> 1:03:46.800 It could be an independent artist, it could be an 1:03:46.800 --> 1:03:49.160 indie major distributor urist, it could be a major as 1:03:49.240 --> 1:03:52.840 signed artist. If it's if it's an artist that doing 1:03:52.880 --> 1:03:55.680 a marketing tie up can be beneficial to both sides 1:03:55.880 --> 1:04:00.200 because it allows us to have an interesting camp pain 1:04:00.360 --> 1:04:02.840 and speak to a demo or a fan base that 1:04:02.840 --> 1:04:07.840 we'd like to reach. It doesn't really matter. Yeah, the 1:04:08.600 --> 1:04:12.240 exact kind of deal structure they have with their label. 1:04:19.960 --> 1:04:23.760 Okay, I know people who have worked for Spotify no 1:04:23.840 --> 1:04:26.520 longer worked there anymore for whatever reason. 1:04:26.640 --> 1:04:27.160 Uh huh. 1:04:27.200 --> 1:04:31.920 And they said traditionally drop date is Friday. And they said, 1:04:32.000 --> 1:04:35.680 with some of these major racks, they can tell by 1:04:36.360 --> 1:04:39.920 early afternoon whether the albums is stiff for a success. 1:04:40.040 --> 1:04:40.880 Can you speak to that? 1:04:42.720 --> 1:04:45.600 I think that. Yeah, So typically stuff is coming out 1:04:45.640 --> 1:04:50.960 Thursday night midnight, and yeah, signals tend to emerge pretty 1:04:51.000 --> 1:04:54.160 quickly in terms of again, how often are people sharing 1:04:54.160 --> 1:04:56.480 the track, saving the track, repeap, playing the track. Those 1:04:56.520 --> 1:04:58.000 signals start coming through pretty quick. 1:05:00.120 --> 1:05:04.800 What would you tell someone who has, you know, a 1:05:04.840 --> 1:05:07.360 household name to a degree everything you say it's an 1:05:07.360 --> 1:05:11.000 interest today that the indicators are not good at first, 1:05:11.400 --> 1:05:13.960 what would you tell them to try to prop up 1:05:14.000 --> 1:05:14.760 the music? 1:05:15.760 --> 1:05:20.520 Well, so everything is context dependent. What I mean by 1:05:20.520 --> 1:05:27.200 that is, you know, if you take a song and 1:05:27.240 --> 1:05:29.800 put it in hot country and it doesn't perform well, 1:05:30.000 --> 1:05:31.760 it could be because it's just not a song that's 1:05:31.800 --> 1:05:33.600 going to resonate with anyone. But it also could be 1:05:33.640 --> 1:05:35.600 that the people who are listening to that playlist, they're 1:05:35.640 --> 1:05:37.880 not your people. You got to find some different people. 1:05:39.440 --> 1:05:42.480 Our system tries to do that automatically. But sometimes it's 1:05:42.520 --> 1:05:45.800 also about like, you know, who's this artist partnering with, 1:05:45.920 --> 1:05:48.720 where are they talking what? You know, like what culture 1:05:48.720 --> 1:05:51.680 are they trying to like appeal to. And sometimes it's 1:05:51.680 --> 1:05:56.840 about finding your zone a little bit. And you know, 1:05:56.920 --> 1:05:59.360 I think that sometimes it can be a track that 1:05:59.400 --> 1:06:02.640 will perform, just needs to be in a different type 1:06:02.680 --> 1:06:03.520 of context. 1:06:03.920 --> 1:06:07.160 Okay, let's just talk to someone who's truly a household names. Yeah, 1:06:07.240 --> 1:06:11.720 they dropped their new album, numbers are not good. It 1:06:11.760 --> 1:06:15.439 wouldn't be about classifying the niche. What might you tell 1:06:15.560 --> 1:06:18.880 them to say, this is a way for you to 1:06:19.040 --> 1:06:20.360 make the album sustain. 1:06:21.640 --> 1:06:24.120 It's hard to fight gravity. So I don't know that 1:06:24.160 --> 1:06:26.400 I have any magic answers to that, but you know, 1:06:26.520 --> 1:06:28.840 at the very least, you're always gonna have, like, if 1:06:28.880 --> 1:06:31.320 you're talking about an established name, you're probably gonna have 1:06:31.720 --> 1:06:33.720 some diehards that are gonna be with you no matter what. 1:06:34.240 --> 1:06:36.080 And so some records are gonna be the kind that 1:06:36.120 --> 1:06:38.800 are like I was even with you on that album, 1:06:38.880 --> 1:06:40.640 even though it didn't kind of cross over to be 1:06:40.680 --> 1:06:44.080 a pop hit. You always have that. But I don't 1:06:44.080 --> 1:06:45.920 know that I have a magic answer outside of that. 1:06:46.800 --> 1:06:51.840 Okay, let's assume I'm an act with some fan. Should 1:06:51.840 --> 1:06:54.120 I put out a single? Should I put out an EP? 1:06:54.400 --> 1:06:57.760 How frequently should I put out my music? Yeah? 1:06:57.880 --> 1:07:01.120 I think there can be a lot of for success. 1:07:01.360 --> 1:07:03.520 But I do think one of the big challenges with 1:07:03.680 --> 1:07:10.640 music is the long periods that can sometimes happen between releases, 1:07:11.920 --> 1:07:15.120 where you kind of people start forgetting or fraying a 1:07:15.200 --> 1:07:19.760 little bit. So I do think that there's a pretty clear, 1:07:20.640 --> 1:07:23.440 you know, evidence that if you can keep a heartbeat 1:07:23.480 --> 1:07:27.520 of engagement and keep you know, a touch point with 1:07:27.600 --> 1:07:29.960 the fans, it's a little bit easier when the next 1:07:29.960 --> 1:07:32.760 big project drops to have them ready and warmed up 1:07:32.840 --> 1:07:38.760 and waiting. Dripping singles has been a pretty effective strategy 1:07:38.800 --> 1:07:41.160 for that. So it tends to work a little better if, 1:07:41.400 --> 1:07:43.080 you know, if you've got a big release coming in 1:07:43.120 --> 1:07:46.960 three months, if you can drip out one to five 1:07:47.480 --> 1:07:50.720 singles along the way, every single one of those drops 1:07:50.760 --> 1:07:53.440 is an opportunity to drive word of mouth and attention 1:07:53.680 --> 1:07:57.400 and algorithmic you know, signal and relevancy. That just increases 1:07:57.440 --> 1:07:59.800 the chances that when the full project drops, you know, 1:08:00.120 --> 1:08:01.680 gonna do as well as I can possibly do. 1:08:03.280 --> 1:08:06.400 And what about the number of tracks on an album. 1:08:06.720 --> 1:08:08.640 You know, there's been a trend of acts. I mean, 1:08:08.680 --> 1:08:11.760 listening to Morgan Wallen's a perfect example. The last couple 1:08:11.800 --> 1:08:15.320 of albums have been double albums. One of the analysisses, well, 1:08:15.320 --> 1:08:19.080 they're gonna make more money. 1:08:19.360 --> 1:08:26.360 I you know, maybe I'm thinking too artistically puist, but 1:08:26.840 --> 1:08:31.479 in my gut it is if you've got eighteen amazing 1:08:31.520 --> 1:08:33.839 tracks that you really believe in, put out all eighteen. 1:08:34.240 --> 1:08:36.599 If you've got nine and you try to force another nine, 1:08:36.680 --> 1:08:38.320 it's not gonna work. I mean, you can make an 1:08:38.360 --> 1:08:41.320 eighteen album, but I don't think you can mathematically engineer 1:08:41.439 --> 1:08:42.000 these things. 1:08:42.240 --> 1:08:42.400 Now. 1:08:42.439 --> 1:08:45.599 Certainly, if you've got a twenty track album and people 1:08:45.640 --> 1:08:48.439 start listening to it from the beginning and they play 1:08:48.479 --> 1:08:52.040 through the end, that's gonna generate more royalty bearing streams. 1:08:52.320 --> 1:08:55.800 That's just math. But the songs have to be good 1:08:55.880 --> 1:08:57.599 enough where they don't skip and they don't tune out, 1:08:57.640 --> 1:08:58.920 So at the end of the day, it's really like 1:08:59.120 --> 1:09:03.040 what you have that should dictate the release strategy. 1:09:03.120 --> 1:09:07.960 If you talk to certainly the acts that are less popular, 1:09:08.920 --> 1:09:11.840 they say they have to make an album. That's the 1:09:11.880 --> 1:09:15.479 only way they can get press. Otherwise, if they put 1:09:15.520 --> 1:09:18.519 out a single, they can't get press and they can 1:09:18.560 --> 1:09:21.960 get no action on streaming. What do you say to that. 1:09:22.320 --> 1:09:24.960 I just don't think there's one way. I mean the 1:09:25.040 --> 1:09:27.640 traditional like I'm going to drop an album, I'm going 1:09:27.720 --> 1:09:29.680 to do a press tour around the album. That is 1:09:29.720 --> 1:09:31.320 a way you can do it that way. But I 1:09:31.320 --> 1:09:35.160 think there's plenty of examples of a single EP or 1:09:35.200 --> 1:09:38.000 a single track having its own moment, and that's cool too. 1:09:39.640 --> 1:09:44.440 Okay, let's go back to the artist tools for Spotify. 1:09:45.600 --> 1:09:49.920 Let's just make it an independent artist because they're more 1:09:49.960 --> 1:09:53.280 wet behind the years. I am putting on a track 1:09:53.720 --> 1:09:56.200 on Spotify and I want to have a career. This 1:09:56.320 --> 1:09:58.160 is not something I did in my basement when I 1:09:58.200 --> 1:10:04.040 got home from being a CPA. Yeah, I used a distributor. 1:10:04.880 --> 1:10:08.840 The track is populated on Spotify. What can I do 1:10:09.520 --> 1:10:11.919 in terms of all the tools you were mentioning earlier. 1:10:12.720 --> 1:10:15.720 Yeah, So to name a few I think we we 1:10:15.840 --> 1:10:19.799 tend to think about this stuff in the release cycle. 1:10:20.160 --> 1:10:24.679 So pre release, we have a tool called the countdown page. 1:10:25.400 --> 1:10:31.400 UHHOA let's start at the raw level. I am an artist. Yeah, 1:10:31.439 --> 1:10:33.960 I have a track that's going to come out on Spotify. 1:10:34.600 --> 1:10:38.080 Is there a general dashboard that I sign up for? 1:10:39.600 --> 1:10:41.400 Yes, that's the Spotify for Artists tool. 1:10:42.400 --> 1:10:46.759 Okay, so I sign up for that. What's my next 1:10:46.800 --> 1:10:48.840 step or my next options? 1:10:49.320 --> 1:10:50.960 Well, we try to take you through this journey, so 1:10:50.960 --> 1:10:52.920 we have recommended steps for you that kind of guide 1:10:52.960 --> 1:10:55.640 you through. So if I can just take it in 1:10:55.680 --> 1:11:00.400 a timeline countdown page, first step, so you and that 1:11:00.439 --> 1:11:02.840 a project is coming and people can see there's like 1:11:02.880 --> 1:11:05.280 a placeholder pre save it now, there's going to be 1:11:05.400 --> 1:11:08.720 music here soon. That's an opportunity to gain attention. And 1:11:08.920 --> 1:11:11.800 in that countdown page you can drip out stuff, so 1:11:11.840 --> 1:11:13.920 you can do a clip of you in the studio, 1:11:14.160 --> 1:11:18.719 you can tease you know, twenty seconds of an upcoming song. 1:11:19.600 --> 1:11:22.160 You can tell a story with video tools, so that's 1:11:22.160 --> 1:11:24.280 an important part of it. Then there's a bunch of 1:11:24.280 --> 1:11:30.439 stuff to do to get ready to have your your 1:11:30.479 --> 1:11:34.200 best audience on release day. So typically we see a 1:11:34.200 --> 1:11:37.519 good pattern of using discovery Mode on catalog leading up 1:11:37.560 --> 1:11:40.200 to release day, So warm up your catalog, get people 1:11:40.200 --> 1:11:43.320 hearing your catalog more so that there's more people who 1:11:43.320 --> 1:11:45.960 have followed you or are fans of you on release 1:11:46.040 --> 1:11:48.920 day that it's going to get blasted to. Then on 1:11:49.120 --> 1:11:52.800 release day, you know, you drop your album. There are 1:11:52.840 --> 1:11:55.599 a couple free to use tools that are pretty important. 1:11:56.240 --> 1:12:01.000 One is canvas, so having moving visuals with the track 1:12:01.040 --> 1:12:02.920 as opposed to just stat at cover art. That's something 1:12:02.960 --> 1:12:06.280 you can upload in the tool that increases engagement. That's important, 1:12:06.479 --> 1:12:08.560 show your brand, let people see what you're about a 1:12:08.600 --> 1:12:11.120 little bit more. And also the playlist pitching tool that 1:12:11.160 --> 1:12:13.599 I mentioned before. Those are important things to do for sure. 1:12:14.080 --> 1:12:16.759 And then there's a paid tool on release day called Marquee, 1:12:17.080 --> 1:12:19.320 which is to announce your new release to people who 1:12:19.400 --> 1:12:24.200 are listeners or potential listeners. And then after release day 1:12:25.760 --> 1:12:29.439 to sustain engagement, like discovery Mode on the actual record 1:12:29.439 --> 1:12:33.599 that you put out, can be a good tool. Coming 1:12:33.640 --> 1:12:36.680 back and adding maybe more of a deluxe version by 1:12:36.680 --> 1:12:40.040 adding clips behind each track, telling a story behind the track, 1:12:40.160 --> 1:12:42.160 what it means, how it was written, things like that. 1:12:42.320 --> 1:12:44.360 Those are things that can maybe take something that's starting 1:12:44.360 --> 1:12:46.439 to die off and give it a reason to get 1:12:46.479 --> 1:12:49.760 reconsidered again and have a little bit of a second life, 1:12:49.800 --> 1:12:51.880 if that makes sense. So we try to guide people 1:12:51.880 --> 1:12:56.799 through that whole journey in the Spotify for Artists product, And. 1:12:56.720 --> 1:13:02.720 That's all your Internet. It's not talking to anybody, it's 1:13:02.760 --> 1:13:04.160 clicking and uploading. 1:13:04.320 --> 1:13:06.800 Everything that I just went through is self serve and 1:13:06.880 --> 1:13:10.160 accessible to anyone, you know, with there are sometimes minimum 1:13:10.280 --> 1:13:12.519 viable audience thresholds you need to have, like I was 1:13:12.560 --> 1:13:15.360 mentioning earlier about discovery Mode, but other than that, it's 1:13:15.360 --> 1:13:17.960 accessible to anyone in Spotify Artists. 1:13:17.960 --> 1:13:23.000 Okay, So staying on that point, if I'm a new artist, 1:13:23.720 --> 1:13:25.519 you're not going to be able to push out to 1:13:25.600 --> 1:13:29.120 my fans pre release information. 1:13:28.720 --> 1:13:35.160 Correct, That's right. So really the best system that we 1:13:35.240 --> 1:13:37.559 have for brand new artists, like if you're coming out 1:13:37.600 --> 1:13:44.280 from from zero, is our Fresh Fines franchise. So we 1:13:44.439 --> 1:13:49.840 have an algorithm that looks at all the listeners that 1:13:49.960 --> 1:13:52.719 tend to listen to stuff before it really breaks out. 1:13:52.880 --> 1:13:55.040 They tend to be like way on the beginning of 1:13:55.080 --> 1:13:58.880 the curve, what are they listening to right now? And 1:13:58.920 --> 1:14:01.840 then we and then we feature those artists in these 1:14:01.880 --> 1:14:04.080 Fresh Finds playlists, and we have them for every genre. 1:14:04.280 --> 1:14:05.920 And this is like the create Diggers. Like, if you 1:14:05.960 --> 1:14:07.680 want to be a year ahead of who's going to 1:14:07.720 --> 1:14:10.120 be the cool new indie artist, that's the place to look, 1:14:10.120 --> 1:14:13.240 and we try to feature those people in Fresh Finds. 1:14:13.240 --> 1:14:15.720 So if you're building a little bulls on social or like, 1:14:15.960 --> 1:14:17.759 you know, people are talking about you on the Internet, 1:14:18.360 --> 1:14:20.519 and then people start listening to you who are ahead 1:14:20.520 --> 1:14:22.680 of the curve, you get featured there and then a 1:14:22.720 --> 1:14:25.440 lot of times that builds up enough of a listenership 1:14:25.479 --> 1:14:29.040 where some of these other tools are accessible to you. 1:14:30.920 --> 1:14:35.080 Okay, I'm a brand new artist, theoretically I might be 1:14:35.120 --> 1:14:41.280 able to be on Fresh Finds. This is all without 1:14:41.320 --> 1:14:44.479 people involved. You're collecting data from socials. How do you 1:14:44.560 --> 1:14:47.040 know that I have some traction outside Spotify? 1:14:47.240 --> 1:14:50.639 Well, one of the biggest signals is on Spotify data, 1:14:51.080 --> 1:14:54.880 but listeners who are just ahead of the curve, so 1:14:54.920 --> 1:14:57.120 we look at what they're listening to. Now, So what 1:14:57.160 --> 1:14:59.439 I meant by that was if you're really buzzy on 1:14:59.479 --> 1:15:04.200 social media, that might get people who are trendsetter listeners 1:15:04.200 --> 1:15:07.719 to listen to you. And that's the biggest contributing factor 1:15:07.760 --> 1:15:10.880 to whether you get on the Fresh Fines playlist. 1:15:11.560 --> 1:15:14.960 Can you give us an example of somebody who started 1:15:15.040 --> 1:15:17.200 on Fresh Fines and then kind of blew up? 1:15:17.920 --> 1:15:22.400 Oh that's a great question. I feel like almost every 1:15:22.479 --> 1:15:26.240 artist that has has broken over the last you know, 1:15:26.360 --> 1:15:31.080 ten years, has been that example. So yeah, I mean 1:15:31.360 --> 1:15:33.200 I think literally almost every name that you could come 1:15:33.240 --> 1:15:33.439 up with. 1:15:33.479 --> 1:15:36.639 Okay, well, let me use a specific example. Zach Brian 1:15:36.720 --> 1:15:40.800 put out his albums independently, then went to Warner Brothers. Yep, 1:15:41.520 --> 1:15:43.960 they get a hold of me, come to the will Turn. 1:15:44.840 --> 1:15:48.240 I was there every now that I play stadium, So 1:15:48.320 --> 1:15:51.640 this is at the beginning of the blow up. Everybody 1:15:51.680 --> 1:15:55.600 there knows every song the album had an X I 1:15:55.600 --> 1:15:59.800 think fourteen or eighteen tracks. Were you aware of the 1:16:00.080 --> 1:16:05.040 act that something was going on there? I don't. 1:16:05.160 --> 1:16:08.920 I don't know the Zach Bryan like on platform history 1:16:08.960 --> 1:16:12.640 off the top of my head. We tend to be, yeah, 1:16:12.760 --> 1:16:15.080 especially our editorial team tends to be very on top 1:16:15.120 --> 1:16:16.799 of that type of stuff, So I wouldn't be surprised, 1:16:16.800 --> 1:16:18.599 But I'm not sure what that specific example. 1:16:18.600 --> 1:16:20.760 Well, you know, Chapel Road had been in the marketplace 1:16:20.880 --> 1:16:25.000 for a while suddenly he's doing these live shows where 1:16:25.080 --> 1:16:27.559 I'm getting email. Hey, you know, there's a big reaction. 1:16:27.680 --> 1:16:32.880 Here's some videos cocomminentally, were you seeing this on Spotify? Yeah? 1:16:33.040 --> 1:16:36.280 And Chapel is a great example because I think a 1:16:36.280 --> 1:16:38.640 lot of people know her story now because of her 1:16:38.680 --> 1:16:41.320 Grammy win. But she had this up and down journey 1:16:41.400 --> 1:16:43.160 right where she she put out a couple songs, she 1:16:43.200 --> 1:16:44.920 was dropped by the label, she went back home, she 1:16:45.040 --> 1:16:51.240 researched even that first leg of the journey where she 1:16:51.280 --> 1:16:53.639 put out a couple songs and then was subsequently dropped. 1:16:53.840 --> 1:16:57.799 She was getting Spotify editorial support even at that phase. 1:16:58.240 --> 1:17:01.960 And you know, she's been an editorials playlist on Spotify 1:17:02.040 --> 1:17:05.600 I think continuously for the last seven years. So I 1:17:05.600 --> 1:17:08.920 think that's actually a great example of we tend to 1:17:08.920 --> 1:17:13.480 be yeah, ahead of the curve on those kind of things. 1:17:14.040 --> 1:17:16.320 How many people are an editorial. 1:17:17.360 --> 1:17:21.040 Globally, I think it's around one hundred and fifty two 1:17:21.120 --> 1:17:22.160 hundred something like that. 1:17:22.720 --> 1:17:27.360 Let's just talk domestically, it tens. 1:17:27.720 --> 1:17:28.960 I don't know the number off my head. 1:17:30.120 --> 1:17:34.559 Okay, So I have a new album or I'm a 1:17:34.600 --> 1:17:40.200 new artist, I go through the release phase. Now, Spotify 1:17:40.280 --> 1:17:43.040 for artists, What else will it give me? First of all, 1:17:43.160 --> 1:17:46.360 let's talk very specifically in terms of data. Yeah, what 1:17:46.720 --> 1:17:48.080 data will I get? 1:17:49.479 --> 1:17:52.280 If anything, we get the feedback that it's too much. 1:17:53.320 --> 1:17:56.599 But at a high level, you're looking at audience metrics. 1:17:56.680 --> 1:18:02.960 So how many light listeners, heavy listeners, fans do you 1:18:03.040 --> 1:18:04.599 have consuming your music? 1:18:05.320 --> 1:18:07.479 Well, just stop right there. How do you break those 1:18:07.479 --> 1:18:08.360 categories down? 1:18:08.960 --> 1:18:14.479 So light listener is like, you know, maybe I listened 1:18:14.479 --> 1:18:17.280 to today's top hits, right, and so Chapel Roone is 1:18:17.320 --> 1:18:20.600 on that. I'm a listener, but I've never searched for 1:18:20.720 --> 1:18:23.360 Chapel Roone. I've never put her in my playlist. So 1:18:23.400 --> 1:18:25.840 I would be a light listener, but I would not 1:18:25.960 --> 1:18:28.920 be a you know, high intent listener, if that makes sense. 1:18:30.240 --> 1:18:31.920 Okay, take me up the next two levels. 1:18:32.720 --> 1:18:34.840 So, yeah, we have a couple levels of fandom and intent, 1:18:35.120 --> 1:18:36.840 and part of what we try to do is show 1:18:36.880 --> 1:18:40.000 you how the different things that you can do can 1:18:40.040 --> 1:18:43.120 help to move audiences up. So maybe you want to 1:18:43.120 --> 1:18:46.360 target the people that have only heard you on playlists 1:18:46.880 --> 1:18:49.559 and have a goal of your campaign to be to 1:18:49.600 --> 1:18:51.559 have them, you know, save you and listen to you 1:18:51.680 --> 1:18:54.000 in their library instead. So that's like one level of 1:18:54.080 --> 1:18:55.800 data that we give you in Spotify for artists is 1:18:55.840 --> 1:18:59.280 the intent level of the audience, and you can see 1:19:00.120 --> 1:19:02.720 both total size of the audience, the intent level, the 1:19:02.760 --> 1:19:08.880 geographic breakdown, the demographic breakdown, all that kind of stuff. 1:19:09.320 --> 1:19:15.120 Then you also get data on each individual track, So 1:19:15.680 --> 1:19:17.920 what playlist is it getting added to? You can see 1:19:17.920 --> 1:19:21.120 Spotify playlists, you can see user playlists, what kind of 1:19:21.160 --> 1:19:23.400 pickup is it getting, what kind of performance is that 1:19:23.439 --> 1:19:26.000 track getting, and you can compare that to like, how 1:19:26.080 --> 1:19:29.719 is this signal single doing compared to my last one, 1:19:30.080 --> 1:19:32.080 to get a sense for how it's coming out of 1:19:32.120 --> 1:19:37.280 the gate. Probably the most popular data feature is on 1:19:37.600 --> 1:19:41.479 release day. We have a live listener account, so you 1:19:41.560 --> 1:19:43.759 come in and its release day and you can see 1:19:44.080 --> 1:19:47.040 there's like a little heartbeat that's showing, you know, twenty 1:19:47.080 --> 1:19:49.960 four nine and sixty four people are listening to this 1:19:50.760 --> 1:19:54.040 you know artist right now. And you know, people have 1:19:54.120 --> 1:19:56.080 fun on release day having their phone out and just 1:19:56.120 --> 1:19:58.240 seeing the number climb and climb and climb, and their 1:19:58.280 --> 1:20:00.000 baby is born and they get to see the world 1:20:00.160 --> 1:20:04.479 kind of listening to it in real time. Yeah, So 1:20:04.880 --> 1:20:08.000 those are you know, some of the bigger categories of data. 1:20:09.160 --> 1:20:11.599 The heartbeat is how many people have listened in that day, 1:20:11.680 --> 1:20:14.240 or how many listen simultaneous. 1:20:13.760 --> 1:20:17.360 Second like this right now the audio is coming out 1:20:17.360 --> 1:20:19.479 of their speaker. How many people listening right now to 1:20:19.520 --> 1:20:20.000 this track? 1:20:21.320 --> 1:20:25.720 Okay, if I'm an artist, can I do that any day? No? 1:20:26.000 --> 1:20:29.120 I think it was for like computational load or something. 1:20:29.120 --> 1:20:31.240 We had to limit it to the first release week. 1:20:31.320 --> 1:20:33.240 I think it is, and then you know, so you 1:20:33.320 --> 1:20:37.840 get that like concurrent right now metric for anything that's 1:20:37.880 --> 1:20:40.360 released in the last seven days, but not every track 1:20:40.439 --> 1:20:42.800 in perpetuity. 1:20:49.560 --> 1:20:54.320 Okay, so my track has some traction. People have listened 1:20:54.360 --> 1:20:58.600 to it on playlists. What can I do as an 1:20:58.720 --> 1:21:01.240 artist to get higher consumption? 1:21:03.160 --> 1:21:08.960 Well, you know, to drive consumption on Spotify. A lot 1:21:09.000 --> 1:21:12.800 of the Spotify for Artist tools are kind of purposely 1:21:12.960 --> 1:21:18.640 designed for that. So, whether it's Discovery mode for more 1:21:18.760 --> 1:21:21.920 lean back or the native ads for more high intent 1:21:22.280 --> 1:21:26.639 driving listening, those are great, you know, places to start. 1:21:27.439 --> 1:21:31.160 If I think more broadly outside of you know, just 1:21:31.240 --> 1:21:33.120 kind of our first party tools, a lot of what 1:21:33.160 --> 1:21:39.000 we see people having success with are collaborations, so that 1:21:39.080 --> 1:21:41.960 you can kind of share across people's different fan base 1:21:42.000 --> 1:21:45.000 and that tends to work really well. We don't have 1:21:45.040 --> 1:21:46.920 a tool for that. It's just a lot of times 1:21:46.920 --> 1:21:49.000 what people do when they're starting to get momentum is 1:21:49.040 --> 1:21:52.560 you know, start that chain of collabse to sustain. 1:21:53.920 --> 1:21:56.759 We covered it, but just go back. Yeah. Native ads 1:21:57.040 --> 1:22:03.080 would be paying to put information in front of the listener, 1:22:03.880 --> 1:22:07.800 and it might be tour dates, merch whatever. 1:22:07.720 --> 1:22:13.320 It's it's for music primarily, So it's you can open 1:22:13.360 --> 1:22:17.360 the app and on the homepage you might see, you know, 1:22:17.520 --> 1:22:20.960 new release from this artist that you have some knowledge of, 1:22:21.400 --> 1:22:23.960 and that's a placement that they've said, I want to 1:22:24.000 --> 1:22:27.680 pay for a certain amount of clicks on that announcement, 1:22:27.960 --> 1:22:29.559 and then we try to route it to the most 1:22:29.600 --> 1:22:33.080 relevant listeners of that you know, who'd be interested in 1:22:33.080 --> 1:22:33.479 that promotion. 1:22:33.560 --> 1:22:34.719 How much might that cost? 1:22:37.400 --> 1:22:39.479 So it's it's a cost per click model. It's similar 1:22:39.560 --> 1:22:42.200 to like buying native ads on Facebook or Google. It's 1:22:42.240 --> 1:22:43.120 in the same ilk. 1:22:44.760 --> 1:22:49.760 As far as putting information tour dates in merch Do 1:22:49.880 --> 1:22:50.960 I have to pay for that. 1:22:51.240 --> 1:22:56.839 Free to do so? We aggregate as many concert listings 1:22:56.840 --> 1:22:59.479 as possible through all of our partnerships. We partner with everybody. 1:22:59.479 --> 1:23:03.960 We want every possible toward a listed on Spotify, and 1:23:04.000 --> 1:23:07.160 then we partner primarily with Shopify. On the merch side, 1:23:07.479 --> 1:23:11.320 the industry has increasingly, you know, gotten onto Shopify as 1:23:11.360 --> 1:23:13.799 the main place to do listings, and all that stuff 1:23:13.840 --> 1:23:18.640 is listed on people's artist page for free. There's no 1:23:18.720 --> 1:23:22.520 additional fee for you know, having that on Spotify. 1:23:23.800 --> 1:23:25.960 And is Spotify going to take a cut? 1:23:26.920 --> 1:23:31.160 We have like a pretty standard on the concert side, 1:23:31.200 --> 1:23:35.679 like the affiliate you know percentage if you click through 1:23:35.720 --> 1:23:38.799 the link and you and you buy in that session, 1:23:39.439 --> 1:23:44.640 we get an affiliate revenue for that. It's not a substantial, 1:23:44.960 --> 1:23:47.519 you know, amount of money for for Spotify. We we 1:23:47.600 --> 1:23:51.160 mostly do it because it's super important to artists, is 1:23:51.200 --> 1:23:53.439 their most important revenue stream and something that you know, 1:23:53.560 --> 1:23:57.400 fans find really interesting. But yeah, that affiliate model exists 1:23:57.439 --> 1:24:01.760 in the background. And what about merch, I don't think 1:24:01.760 --> 1:24:05.000 there's any I know, there had been some affiliate conversations 1:24:05.000 --> 1:24:06.479 in the past. I don't think there's any cut that 1:24:06.520 --> 1:24:07.640 goes back to Spotify and that. 1:24:08.280 --> 1:24:10.000 To what degree do these work? 1:24:13.640 --> 1:24:19.080 Yeah, I mean concerts has become a huge use case, 1:24:19.280 --> 1:24:24.120 so tens of millions of people buying concert tickets through Spotify, 1:24:24.880 --> 1:24:28.679 hundreds of millions of dollars in concert sales driven through Spotify. 1:24:28.680 --> 1:24:30.679 So yeah, it's become substantial for sure. 1:24:31.680 --> 1:24:35.760 Okay, So going back to my dashboard, I can get 1:24:35.760 --> 1:24:39.840 simultaneous listeners with the heartbeat yep. I can get to 1:24:39.920 --> 1:24:44.280 what degree are people, you know, casual listeners more active listeners. 1:24:44.600 --> 1:24:48.519 I can get regional data any other vertical that we 1:24:48.560 --> 1:24:49.240 haven't covered. 1:24:49.600 --> 1:24:51.439 When you say vertical, what do you mean by that, 1:24:51.479 --> 1:24:59.840 any other area of information? Yeah, I think you co 1:25:00.040 --> 1:25:00.599 for most of them. 1:25:01.680 --> 1:25:07.680 Okay, to what degree is the demographic and regional information 1:25:08.600 --> 1:25:09.280 broken down? 1:25:11.400 --> 1:25:14.439 Yeah, So I think that it's been helpful because it 1:25:14.439 --> 1:25:17.960 gives you things like age and gender, so you can 1:25:18.000 --> 1:25:21.080 have an idea of kind of the segments that you're 1:25:21.080 --> 1:25:25.320 appealing to. And then from a geo perspective, it's pretty 1:25:25.320 --> 1:25:29.280 cool because sometimes things happen, you know, in regions that 1:25:29.280 --> 1:25:32.240 people wouldn't expect for reasons they don't even fully understand. 1:25:32.240 --> 1:25:34.320 But knowing like oh maybe I could do a Latin 1:25:34.360 --> 1:25:36.760 American tour, I didn't realize, like, you know, is this 1:25:36.840 --> 1:25:39.400 big and that part of the world. So I think 1:25:39.640 --> 1:25:43.799 the fact that we have country level, city level listener 1:25:43.920 --> 1:25:48.800 data stream data can be directly helpful for routing strategies. 1:25:49.760 --> 1:25:52.880 And to what degree is a broken down demographically. 1:25:54.439 --> 1:25:58.360 Age and gender is the main way And to. 1:25:58.400 --> 1:26:02.880 What degree in your tenure Spotify have you seen domestic 1:26:03.080 --> 1:26:07.400 us product spread around the world and what walls do 1:26:07.479 --> 1:26:07.840 you hit? 1:26:11.160 --> 1:26:14.320 Yeah, I mean export in every direction is increasing. Things 1:26:14.320 --> 1:26:17.080 are just getting less confined to their domestic market. I 1:26:17.080 --> 1:26:20.680 mean even country that people think of is maybe a 1:26:20.760 --> 1:26:25.720 more I don't know, Waldoff Country is bigger in the 1:26:25.800 --> 1:26:31.479 UK than it's ever been. But yeah, like I said before, 1:26:31.560 --> 1:26:33.240 you know, the majority of artists seeing the majority of 1:26:33.240 --> 1:26:37.200 their revenues from outside of their home country. And not 1:26:37.240 --> 1:26:42.719 only that, but in terms of at an artist level, 1:26:43.760 --> 1:26:46.040 artists that are making hundreds of thousands of dollars, so 1:26:46.160 --> 1:26:49.000 artists that are generating more than one hundred thousand dollars 1:26:49.080 --> 1:26:53.880 in royalties from Spotify. Those artists last year recorded in 1:26:53.920 --> 1:27:00.000 over fifty languages. So the amount of diversity of artists 1:27:00.200 --> 1:27:02.120 recording in all different languages around the world that are 1:27:02.120 --> 1:27:05.400 actually having you know, very substantial audiences and payouts on 1:27:05.439 --> 1:27:08.479 Spotify is way more diverse than it's ever been. I 1:27:08.479 --> 1:27:10.720 think those numbers are up, you know, five ten x 1:27:10.760 --> 1:27:12.320 over the last ten years. 1:27:12.320 --> 1:27:17.559 So how big is Latin in the US market? Massive? 1:27:18.560 --> 1:27:20.759 I don't have a number for you, but it's it's huge. 1:27:21.120 --> 1:27:25.560 Well, well, let's talk different genres. Yeah, there's Latin, there's country, 1:27:25.880 --> 1:27:29.200 there's jazz and classical, but they've historically been to minimus. 1:27:29.680 --> 1:27:34.200 There's rock, there's hip hop. These genres, what have you seen? 1:27:34.320 --> 1:27:36.000 What's going up? What's going down? 1:27:37.320 --> 1:27:39.880 I think the interesting thing about rock is it's becoming 1:27:39.880 --> 1:27:42.400 a lot less monolithic and a lot more cut up. 1:27:42.720 --> 1:27:48.720 You know, indie, shoegaze, you know, all these different micro genres. 1:27:49.000 --> 1:27:52.400 I think somewhat in the same story with rap drill music, 1:27:52.439 --> 1:27:58.679 and I mean maybe this is really a cross genres trend, 1:27:58.800 --> 1:28:02.200 not so much in country, but just the smaller scenes 1:28:02.240 --> 1:28:04.800 that are having their own moments and their own communities 1:28:04.840 --> 1:28:06.679 that do things a different way. 1:28:07.000 --> 1:28:12.599 So, but can you give us an overall trend. I mean, 1:28:12.600 --> 1:28:14.640 it used to be a rock world. Then there was 1:28:14.680 --> 1:28:17.920 a hip hop world. You hear people, you know, prior 1:28:17.960 --> 1:28:20.599 to this Kendrick Drake thing. You hear people saying, oh, 1:28:20.640 --> 1:28:23.839 it's not as innovative. Then you have questlove the Kendrick 1:28:23.920 --> 1:28:27.840 Drake saying oh it's the end of hip hop. Are 1:28:27.880 --> 1:28:32.160 you seeing anything going up and down? I mean, there's 1:28:32.200 --> 1:28:35.800 gotta be some movement up and down with all these genres. Yeah. 1:28:35.840 --> 1:28:39.520 I think in terms of things that are ascendant, certainly 1:28:40.680 --> 1:28:44.519 K pop, Latin, more recently afropop, these things have been 1:28:44.640 --> 1:28:49.559 rising a lot, kind of at the expense of everything else. 1:28:50.960 --> 1:28:55.639 I don't think there's been one big loser to stand out, 1:28:55.720 --> 1:28:57.920 but as those things grow, they kind of eat into 1:28:57.960 --> 1:28:59.320 the averages of everything else. 1:29:00.320 --> 1:29:04.160 And let's use K pop as an example that tends 1:29:04.200 --> 1:29:07.000 to have a wall Yeah, people who were really into 1:29:07.040 --> 1:29:10.040 it and then people couldn't give a shit. Do you 1:29:10.200 --> 1:29:13.599 think that K pop and latin are going to start 1:29:13.640 --> 1:29:17.960 permeating people who traditionally would not be fans for this music. 1:29:18.200 --> 1:29:20.360 I think so. I mean, you know, I think one 1:29:20.360 --> 1:29:22.960 of the things that the editorial team that Spotify is 1:29:23.000 --> 1:29:27.719 really proud of, justifiably is they started programming kate pop 1:29:28.200 --> 1:29:30.559 when it was really walled off and people didn't know 1:29:30.640 --> 1:29:33.280 exactly what to make of it. But I don't think 1:29:33.320 --> 1:29:35.400 it is wald off anymore. I think you see stuff 1:29:35.439 --> 1:29:39.640 you know, seventeen and bts and that this stuff resonates 1:29:39.800 --> 1:29:42.640 and can chart and do well in the US, like 1:29:42.680 --> 1:29:46.000 other genres can because I think it takes some time 1:29:46.040 --> 1:29:48.760 for people to get you know, comfort and familiarity. In 1:29:49.040 --> 1:29:51.519 the US, maybe around something, but yeah, I think the 1:29:51.560 --> 1:29:53.840 stuff crosses over and I think that you know, that's 1:29:54.160 --> 1:29:57.120 that's absolutely true of Latin music. Latin music is massive 1:29:57.160 --> 1:29:59.759 in every corner of the of the world for sure. 1:30:00.360 --> 1:30:02.720 Going back to the days of MTV, which is not 1:30:02.800 --> 1:30:08.080 a perfect analogy, yeah, they would literally have changes. They 1:30:08.120 --> 1:30:10.679 would say, oh, we're not going to program any more 1:30:10.720 --> 1:30:15.599 hard rock, We're going to program this. Do you guys say, well, 1:30:15.600 --> 1:30:18.240 you know, we got to vibe on K pop. Let's 1:30:18.280 --> 1:30:22.559 push it out to the listeners more. Yeah. 1:30:22.600 --> 1:30:25.599 I think one of the things that the editorial team 1:30:25.760 --> 1:30:31.320 tries to focus on, or maybe the things that the 1:30:31.439 --> 1:30:34.720 algorithm isn't automatically going to pick up, right, Like, the 1:30:34.760 --> 1:30:37.520 algorithm is good at picking up things that are trending 1:30:37.960 --> 1:30:40.880 in the numbers, but in terms of things that are 1:30:40.920 --> 1:30:44.760 picking up speed in the amount that you know, it 1:30:44.840 --> 1:30:49.080 has a cultural attention or zeitgeist or how much people care, 1:30:50.320 --> 1:30:53.519 what's interesting, what's got people talking. I think the editorial team, 1:30:53.640 --> 1:30:57.000 you know, that's where humans shine. The whole system that 1:30:57.040 --> 1:30:59.200 we've made is tried to be the best combination of 1:30:59.720 --> 1:31:02.400 man and machine, kind of working in harmony. And that's 1:31:02.439 --> 1:31:04.160 the piece that I think humans do really well. 1:31:05.360 --> 1:31:08.760 Let's go back to the dashboard. Yeah, we have the 1:31:08.800 --> 1:31:14.360 act that's brand new. We have the superstar. Let's assume 1:31:14.520 --> 1:31:17.840 I'm more of a journey person. I'm putting out my 1:31:17.960 --> 1:31:22.599 third or fourth album. Yeah, is it just identical. Well, 1:31:22.640 --> 1:31:26.160 we have the pregame, we have this or that, or 1:31:26.240 --> 1:31:29.280 once I'm in the game, are is there more information? 1:31:29.400 --> 1:31:31.880 Are there more tools that you can help me to grow? 1:31:33.320 --> 1:31:38.800 Certainly, I think that all the tools I don't know. 1:31:38.840 --> 1:31:42.040 I I think that most of the tools that we 1:31:42.120 --> 1:31:47.080 have really shine in the in the kind of middle state. 1:31:47.800 --> 1:31:52.400 If you're a superstar and you're super saturated, certainly our 1:31:52.439 --> 1:31:55.720 tools are valuable, but they're going to provide less lift overall, 1:31:56.760 --> 1:31:58.679 you know, because you're already out there so many people 1:31:58.760 --> 1:32:00.720 know you, maybe people have made up their mind about you. 1:32:00.920 --> 1:32:03.360 And if you're brand new and we hardly know about you, 1:32:03.479 --> 1:32:05.559 it's hard for the tools to do their job. Where 1:32:05.560 --> 1:32:08.240 they really shine is in the middle where you're not 1:32:08.320 --> 1:32:11.600 overexposed yet we know a little about where you're resonating 1:32:11.640 --> 1:32:14.320 and can maybe try to help help you, you know, 1:32:14.439 --> 1:32:17.600 do more. The tools tend to I mean, they're the 1:32:17.640 --> 1:32:20.080 same if it's your second album or your fourth album. 1:32:20.240 --> 1:32:24.479 But what's hopefully changed is you know your audience that 1:32:24.520 --> 1:32:26.679 you can tap it. The people who have been there 1:32:26.720 --> 1:32:28.720 for you and your first album, your second album or 1:32:28.720 --> 1:32:30.519 third album. Now those people are there for you to 1:32:30.560 --> 1:32:33.439 target and try to resurrect and be on the next 1:32:33.479 --> 1:32:34.320 part of the journey with you. 1:32:35.200 --> 1:32:39.600 I know it's not your purview exactly, but the editorial 1:32:39.640 --> 1:32:44.960 they're human beings and people would certainly believe someone with 1:32:45.000 --> 1:32:49.080 an ongoing relationship with an editorial person is going to 1:32:49.120 --> 1:32:51.120 get their music in playlist. 1:32:52.000 --> 1:32:53.360 Can you say more and what you mean by that? 1:32:55.280 --> 1:33:00.840 Okay, Hey, this is traditional with distribution. I have a 1:33:00.840 --> 1:33:03.559 steady stream of product. If you have a steady stream 1:33:03.600 --> 1:33:05.439 of product, there's more of a reason to have an 1:33:05.520 --> 1:33:10.000 ongoing relationship with someone. I have a steady stream of product, 1:33:10.800 --> 1:33:14.960 a certain amount has been successful. I find out who 1:33:15.040 --> 1:33:19.639 is the programmer in my genre. Okay, I take him 1:33:19.640 --> 1:33:24.120 to dinner, I send him some music, I send him 1:33:24.120 --> 1:33:27.880 a birthday card, ask him about his wife, and then 1:33:27.920 --> 1:33:34.360 I say I have a new release. Wouldn't you know 1:33:35.120 --> 1:33:38.759 just on a human level, people would say that person 1:33:38.800 --> 1:33:42.080 would tend to play that record or play list that record. 1:33:43.000 --> 1:33:47.360 I see what you're getting at. I think, first of all, 1:33:47.360 --> 1:33:50.479 I want to be clear, there's a very rigorous code 1:33:50.520 --> 1:33:52.960 of conduct. You mentioned a birthday gift. I think at 1:33:53.000 --> 1:33:58.240 some point in that sequence gifts favors not allowed fireable 1:33:58.280 --> 1:34:02.000 offenses at Spotify. So we take it super seriously. Anything 1:34:02.040 --> 1:34:06.120 that edges on you know, bribery, this stuff we take 1:34:06.160 --> 1:34:10.439 super seriously. But the broader point you're making about like, Okay, 1:34:10.520 --> 1:34:15.759 this is an established manager. They've successfully recognized ten acts, 1:34:16.280 --> 1:34:18.400 and they say this next one is just like their 1:34:18.400 --> 1:34:20.040 first ten, and this next one is going to be 1:34:20.080 --> 1:34:23.799 really good. That's a signal for sure. I don't actually 1:34:23.800 --> 1:34:25.760 think it even matters whether you get the phone call 1:34:25.800 --> 1:34:28.600 from someone, if you just look up online. This is 1:34:28.680 --> 1:34:31.360 the team they have around them. I think it's good 1:34:31.360 --> 1:34:34.000 for the editorial team to notice that and take that 1:34:34.040 --> 1:34:37.120 into account. It's like, oh, okay, well that's part of 1:34:37.720 --> 1:34:40.680 the full story that I'm seeing around this artist. These 1:34:40.720 --> 1:34:42.560 people think they're going to be great, They're going to 1:34:42.640 --> 1:34:46.000 have the you know, creative support of those people. I 1:34:46.080 --> 1:34:49.080 think that's legitimate as a signal, you know, and you 1:34:49.080 --> 1:34:52.200 can never take out all bias from a system. I 1:34:52.240 --> 1:34:55.000 think we've done a really good job of trying to 1:34:55.000 --> 1:34:57.720 mitigate it every possible place we can and have a 1:34:57.840 --> 1:35:02.040 level playing field. But I take your point that it's 1:35:02.080 --> 1:35:05.720 never a perfectly flat playing field. At the end of 1:35:05.800 --> 1:35:09.280 the day, the thing that matters the most is the 1:35:09.400 --> 1:35:13.719 music comes out. And if you try it in new boots, 1:35:13.720 --> 1:35:16.559 which is like the feeder playlist to hot country, and 1:35:16.600 --> 1:35:21.720 it's not performing, if it's been there for four days 1:35:21.760 --> 1:35:24.080 and it's not performing, all that other stuff that you 1:35:24.120 --> 1:35:27.080 took into account, it doesn't really matter anymore. The fans 1:35:27.120 --> 1:35:30.479 have decided now, right so you can't keep you know, 1:35:30.640 --> 1:35:37.280 forcing it. And so I think that's the biggest difference 1:35:37.320 --> 1:35:40.040 between the terrestrial radio era and this era that we're 1:35:40.040 --> 1:35:44.360 in right now, is the fans give you signal very quickly, 1:35:44.439 --> 1:35:47.080 and they walk with their feet and you know, they decide. 1:35:47.120 --> 1:35:50.080 So that's the ultimate remover of bias. 1:35:50.880 --> 1:35:53.040 Tell me more about the code of ethics. 1:35:54.200 --> 1:35:58.320 You know, when you take the job, you agree to 1:35:59.840 --> 1:36:01.840 not going to do any of these things, and if 1:36:01.840 --> 1:36:03.720 I do them, I know that means I lose my job. 1:36:03.840 --> 1:36:05.439 So they're all, oh, yeah, yeah, what are some of 1:36:05.439 --> 1:36:08.760 those things? If I take you to dinner, that's not 1:36:08.800 --> 1:36:10.160 a code of ethics violation. 1:36:11.600 --> 1:36:13.760 I think it is. I'll look up. I mean, I 1:36:13.880 --> 1:36:16.800 I think we make sure we were splitting the bill 1:36:16.880 --> 1:36:17.800 or we're taking people out. 1:36:18.040 --> 1:36:19.200 You know, that's important. 1:36:19.320 --> 1:36:21.000 Yeah, we don't want to do that, so. 1:36:22.400 --> 1:36:24.439 I give you a ticket to the show. Is that 1:36:24.479 --> 1:36:26.200 a code of ethics violation? 1:36:27.760 --> 1:36:30.240 Well, now you're gonna quiz me on all the things. 1:36:30.560 --> 1:36:32.680 Let me let me you know, like go back. 1:36:32.680 --> 1:36:35.479 Hey, if you can't remember, that's okay. But you know, 1:36:35.560 --> 1:36:38.000 it's like if you look for work for a major newspaper, 1:36:38.840 --> 1:36:43.120 they paid for their tickets. Is it that strict at Spotify? 1:36:43.720 --> 1:36:46.519 I know it is very strict. I like, you know, 1:36:46.720 --> 1:36:50.599 I don't remember the exact details of this concert ticket 1:36:50.600 --> 1:36:52.680 thing or whatever. I mean some of the you know, 1:36:52.760 --> 1:36:54.640 we we want our people to go to shows, right, 1:36:54.640 --> 1:36:56.800 We want them to see the acts live, to contribute, 1:36:56.840 --> 1:36:58.960 but like, yeah, we don't want it to be through 1:36:58.960 --> 1:37:01.640 a favor. We want them to go, you know, on 1:37:01.680 --> 1:37:04.479 Spotify's dime. These are things that are important, and like 1:37:04.479 --> 1:37:08.320 I said, i'm the details, I'm I'll look into. But 1:37:08.479 --> 1:37:10.760 I know that this has been a big point of 1:37:10.800 --> 1:37:16.800 emphasis and something that isn't just theoretical. It's affected, you know, employment, 1:37:16.840 --> 1:37:17.960 and we take super seriously. 1:37:18.960 --> 1:37:21.960 Okay, a complaint that I get, and you know, you 1:37:22.000 --> 1:37:23.639 and me are in the same world. There are people 1:37:23.760 --> 1:37:27.679 going to complain. People say, oh, I had my track 1:37:27.760 --> 1:37:30.760 on Spotify, I had my alm on Spotify. Yeah, and 1:37:30.800 --> 1:37:33.920 they took it down because they thought it was spam. 1:37:33.960 --> 1:37:36.320 And I put in this money for this and that 1:37:36.840 --> 1:37:39.439 literally got that email yesterday. What would you say to 1:37:39.520 --> 1:37:40.080 that person. 1:37:41.080 --> 1:37:44.599 I feel so bad for artists who are in this situation. 1:37:44.920 --> 1:37:46.799 And the reason I feel bad for them is because 1:37:46.840 --> 1:37:51.080 if you look at these marketing sites, they are so predatory. 1:37:51.640 --> 1:37:56.120 Like these marketing sites, they're like, you know, put in 1:37:56.160 --> 1:37:59.959 one hundred dollars and we'll get you ten thousand totally 1:38:00.200 --> 1:38:06.400 organic bot free streams, which is obviously total bs. There's 1:38:06.439 --> 1:38:08.479 no such thing as that. But if you fall for 1:38:08.560 --> 1:38:11.120 that scam and you pay one hundred dollars and you 1:38:11.200 --> 1:38:13.360 genuinely think, oh, they said it's bop free. I'm doing 1:38:13.360 --> 1:38:15.480 this all on the up and up, this is great, 1:38:15.840 --> 1:38:17.639 you know. The truth is is that then they're getting 1:38:17.680 --> 1:38:21.200 a bunch of bots to stream your song, and we 1:38:21.280 --> 1:38:26.599 take that extremely seriously. We catch it very accurately. We 1:38:26.640 --> 1:38:30.439 immediately remove all royalties paid out so we don't pay 1:38:30.439 --> 1:38:33.599 for fraudulent streams. We remove the play counts, we remove 1:38:33.600 --> 1:38:38.320 the monthly listener accounts, and we send notifications to the distributor, 1:38:38.400 --> 1:38:41.840 so we say, hey, distributor, this thing is getting bodied. 1:38:42.560 --> 1:38:46.559 And then if it's getting bodied really bad, we charge 1:38:46.600 --> 1:38:49.320 the distributor a fee because we want to incentivize them 1:38:49.400 --> 1:38:51.960 to say, don't keep letting this person do that. You 1:38:52.040 --> 1:38:54.559 need to maybe charge them a fee, Maybe you need 1:38:54.600 --> 1:38:56.760 to give them a strike. You need to ultimately, you know, 1:38:57.080 --> 1:39:00.000 remove it if they keep doing it over and over again. 1:39:00.880 --> 1:39:05.080 So we take it super seriously. We try to make 1:39:05.120 --> 1:39:11.040 sure that there are as few as possible, like wrongly accused. 1:39:12.400 --> 1:39:14.800 No system is perfect. I think our system is very 1:39:14.920 --> 1:39:19.400 very good. But this, this whole you know, streaming fraud 1:39:19.479 --> 1:39:22.080 thing is a scourge on the industry and something we 1:39:22.120 --> 1:39:25.200 try to combat as in every way that we can. 1:39:33.240 --> 1:39:34.360 So where are you from? 1:39:35.400 --> 1:39:38.479 Like where did I grow up? Yeah, grew up near 1:39:38.520 --> 1:39:39.480 new Haven, Connecticut. 1:39:41.120 --> 1:39:43.080 Oh wait wait, I'm from Connecticut where. 1:39:43.800 --> 1:39:45.880 I grew up in Cheshire and then Madison. 1:39:46.920 --> 1:39:49.519 And what did your parents do for a living? 1:39:50.320 --> 1:39:52.080 Nothing to do with what I do. They were both 1:39:52.160 --> 1:39:54.559 medical doctors, so I ran the other way. 1:39:55.400 --> 1:39:57.680 Okay, so there are medical doctors. How many kids in 1:39:57.720 --> 1:40:00.880 the family, Me and my older brother? And what your 1:40:00.920 --> 1:40:01.640 older brother do? 1:40:02.520 --> 1:40:05.120 He's at Google. I've been a Spotify fourteen years. He's 1:40:05.160 --> 1:40:07.880 been at Google like seventeen eighteen years. So we're both 1:40:07.920 --> 1:40:09.160 crazy lifirst. 1:40:10.000 --> 1:40:11.400 Do you have a close relationship. 1:40:12.240 --> 1:40:13.479 I do, Yeah, love my brother. 1:40:13.760 --> 1:40:15.959 I mean the fact that he's at a tech company, 1:40:16.400 --> 1:40:19.479 You're in a music tech company. Is there anything in 1:40:19.479 --> 1:40:21.080 the background that would predict that. 1:40:21.920 --> 1:40:24.000 I'm not sure. He's more on the sales side. I'm 1:40:24.000 --> 1:40:29.320 more on the product side. But you know, my we 1:40:29.360 --> 1:40:32.800 came out it totally different ways. I've been obsessed with 1:40:32.880 --> 1:40:35.439 music my whole life. I started playing guitar and piano 1:40:35.479 --> 1:40:38.120 from a very young age. I had delusions of being 1:40:38.160 --> 1:40:41.280 a performer myself, I you know, dismissed those thought. I 1:40:41.320 --> 1:40:45.880 wanted to be a producer. Wrote my college thesis on 1:40:46.200 --> 1:40:48.760 how the music industry should escape from napster. I mean, 1:40:48.800 --> 1:40:52.160 I've been kind of like a single track mind about 1:40:52.360 --> 1:40:56.040 you know, the music ecosystem and the music business and 1:40:56.360 --> 1:40:59.280 how things could work better for artists and fans. My 1:40:59.320 --> 1:41:02.200 whole life been obsessed with it. That's my whole journey. 1:41:02.240 --> 1:41:05.599 That's what I've been always most interested in, and that's 1:41:05.640 --> 1:41:07.840 really the way I came to Spotify, not through tech 1:41:07.960 --> 1:41:09.479 but more through music. 1:41:10.760 --> 1:41:12.800 So how serious a musician were you? 1:41:13.400 --> 1:41:15.519 I was like recording my own stuff in high school 1:41:15.560 --> 1:41:20.439 and college and doing you know, a couple like small 1:41:20.600 --> 1:41:23.840 gigs here and there, but nothing serious. I learned pretty 1:41:23.920 --> 1:41:25.479 quickly that I was that was not going to be 1:41:25.520 --> 1:41:26.320 my superpower. 1:41:26.920 --> 1:41:27.679 How did you learn? 1:41:29.160 --> 1:41:33.200 You know, like performing wasn't like fun for me. I 1:41:33.240 --> 1:41:35.320 was just worried about it going bad. I wasn't enjoying 1:41:35.400 --> 1:41:40.160 going well. And I just I, like, you know, I 1:41:40.240 --> 1:41:42.360 wasn't great. I was good. I was just I wasn't great. 1:41:42.520 --> 1:41:44.800 I could tell that there were other people that were 1:41:44.800 --> 1:41:46.680 going to be offering way more in the world in 1:41:46.760 --> 1:41:49.000 terms of recording and performing music than I was going to. 1:41:49.640 --> 1:41:51.960 So you were like a solo actor? There were bands? 1:41:52.040 --> 1:41:53.720 Yeah, like a couple of people I were, you know, 1:41:54.240 --> 1:41:57.000 just duos, trios that we were recording with in high 1:41:57.040 --> 1:41:57.719 school and college. 1:41:58.280 --> 1:41:59.479 And where'd you go to college? 1:42:00.080 --> 1:42:00.960 At Penn in Philly? 1:42:02.040 --> 1:42:03.920 Okay, you go to college at the height of the 1:42:04.000 --> 1:42:04.679 dapster era. 1:42:05.240 --> 1:42:06.040 Yeah, pretty much. 1:42:06.640 --> 1:42:10.360 So what was it like being in college during Napster? Yeah? 1:42:10.560 --> 1:42:11.200 It was wild. 1:42:11.240 --> 1:42:13.880 I mean I remember getting to the dorm and having 1:42:14.080 --> 1:42:16.479 one of the ras or you know, the older kids 1:42:16.479 --> 1:42:18.439 that tell you what to do, being like, this is 1:42:18.479 --> 1:42:22.200 the server you connect to to see everybody else's hard drives, 1:42:22.200 --> 1:42:23.840 and this is how we all share our music together. 1:42:23.880 --> 1:42:25.840 It was like part of like, you know, a new 1:42:25.920 --> 1:42:28.320 student orientation is like this is how the piracy is 1:42:28.360 --> 1:42:29.640 going to work. So you just you know, it was 1:42:29.680 --> 1:42:34.960 a totally different you know, era and world at that point. 1:42:35.880 --> 1:42:40.120 And but you know, what I will say is the 1:42:40.280 --> 1:42:43.519 social music discovery through that and being at college and 1:42:43.560 --> 1:42:45.640 seeing like, you know, you're sitting in high school with 1:42:45.680 --> 1:42:47.120 your own playlist and then you get to college and 1:42:47.120 --> 1:42:49.280 you see everybody else's place. Oh you're into that and 1:42:49.280 --> 1:42:51.360 you're into that. It was one of the most exciting 1:42:51.400 --> 1:42:53.519 times for me as a music fan, just to see that, 1:42:53.600 --> 1:42:56.320 even though like the business side of it was totally broken. 1:42:57.320 --> 1:42:58.760 Definitely took some inspiration from that. 1:42:59.560 --> 1:43:02.000 So what music were you're listening to? Oh? 1:43:02.040 --> 1:43:06.559 Everything? But I grew up being mostly into jazz, into country, 1:43:06.560 --> 1:43:12.240 indie rock, classic rock, Yeah, everything. 1:43:12.479 --> 1:43:15.000 And you major in what in college. 1:43:15.880 --> 1:43:18.120 In Anneburg they call it communication, but it's basically like 1:43:18.160 --> 1:43:20.759 media industry stuff and music minor. 1:43:23.000 --> 1:43:26.400 Yeah, and what did your thesis say? 1:43:27.520 --> 1:43:29.880 It was actually more pessimistic than it turned out to be. 1:43:29.960 --> 1:43:31.840 I thought people were gonna need to be like more 1:43:31.880 --> 1:43:35.639 altruistic and be gifting artists and more like Patreon kind 1:43:35.640 --> 1:43:40.599 of vibes. You know, the fact that products were made 1:43:40.640 --> 1:43:42.880 that were actually better than piracy, that got people to 1:43:42.920 --> 1:43:45.400 pay because they got something from it, not because of 1:43:45.720 --> 1:43:47.400 the purity of their hearts. I think is a much 1:43:47.439 --> 1:43:49.599 better evolution and a much bigger business for everyone to 1:43:49.600 --> 1:43:53.400 be in. But I was, yeah, I was looking at 1:43:53.560 --> 1:43:57.800 what are other ways that businesses have monetized freely available 1:43:57.840 --> 1:44:00.880 goods like water to bottled water and you know these 1:44:00.960 --> 1:44:02.320 kind of things, and how do you how do you 1:44:02.360 --> 1:44:02.680 do that? 1:44:05.000 --> 1:44:06.719 So why do you think you were wrong? 1:44:11.280 --> 1:44:16.479 Well, so what I what I had conviction in was 1:44:16.800 --> 1:44:20.280 you need to meet consumers where they are. Every young 1:44:20.400 --> 1:44:24.880 person had the assumption music is free. So if you 1:44:24.880 --> 1:44:27.360 put a paywall in front of people, you lost them already. 1:44:27.439 --> 1:44:31.679 There has to be a free tier to get people 1:44:31.680 --> 1:44:36.439 to pay. So my first, like real job was at 1:44:36.520 --> 1:44:40.360 LimeWire where they were trying to build. My job was 1:44:40.400 --> 1:44:43.800 to build a licensed MP three store, and we were 1:44:43.800 --> 1:44:48.599 going to try to migrate people from file sharing into 1:44:48.640 --> 1:44:54.120 a licensed subscription. And that was one idea of how 1:44:54.120 --> 1:44:56.439 we could migrate people from like meet them where they are, 1:44:56.560 --> 1:45:00.320 meet them with free, get them moved over. If I 1:45:00.360 --> 1:45:06.280 did that so exceptionally well, the free to paid funnel 1:45:06.920 --> 1:45:09.120 that's been built by getting people to come in and 1:45:09.160 --> 1:45:13.120 discover and invest in their library and then get so 1:45:13.200 --> 1:45:15.080 invested that they want to remove the ads, and they 1:45:15.080 --> 1:45:16.759 want to play on demand, and they want to convert 1:45:16.800 --> 1:45:20.120 to premium. It just works so incredibly well to take 1:45:20.200 --> 1:45:22.160 a population of the world that had no intention of 1:45:22.240 --> 1:45:25.640 being a paid music subscriber now to a place where they, 1:45:25.840 --> 1:45:28.000 of course I would never cancel that subscription. And it's 1:45:28.040 --> 1:45:31.960 all been through crafting a really good, you know, product experience, 1:45:31.960 --> 1:45:32.320 I think. 1:45:33.120 --> 1:45:35.720 And you know what the churn rate is, Oh, it's 1:45:35.840 --> 1:45:36.240 very low. 1:45:36.280 --> 1:45:39.560 I mean, especially on premium, you know, low, low single digits. 1:45:40.120 --> 1:45:43.920 Okay, you graduate from college, your first job is with LimeWire. 1:45:44.520 --> 1:45:47.479 Well, let's see, I was in college, so when I 1:45:47.520 --> 1:45:51.360 wanted to be a producer, I first worked at recording 1:45:51.400 --> 1:45:53.599 studios and I thought I was going to like, you know, 1:45:53.800 --> 1:45:55.640 get a turn on the pro tool set up, and 1:45:55.680 --> 1:46:00.160 I was you know, rolling mike cable and taking out trash. 1:46:00.200 --> 1:46:01.920 So it was like, Okay, that's not going to be 1:46:01.960 --> 1:46:05.439 the route for me. And then the big turning point 1:46:05.479 --> 1:46:08.479 for me was an internship I had at EMI. So 1:46:08.680 --> 1:46:12.320 I got to be the intern for summer for Digital 1:46:12.640 --> 1:46:15.000 Biz Dev for EMI when they were a major label, 1:46:15.320 --> 1:46:17.840 and I met every single person in two thousand and 1:46:17.880 --> 1:46:23.080 seven that wanted to license EMI, Spiral Frog and all 1:46:23.160 --> 1:46:26.960 the ideas that people had. You know, Amazon was going 1:46:27.040 --> 1:46:30.320 DRM free, MP three's, you know, everyone's trying to figure 1:46:30.320 --> 1:46:33.960 it out. And one of the companies that I met 1:46:33.960 --> 1:46:36.680 with that summer was LimeWire and they were like, we 1:46:36.720 --> 1:46:39.360 have one hundred million monthly active users. We're trying to 1:46:39.360 --> 1:46:41.360 get them onto a license thing. And I was like this, 1:46:41.360 --> 1:46:45.000 this I can believe might work. So I was there 1:46:45.040 --> 1:46:48.839 for three three or four years. That's where I learned 1:46:49.000 --> 1:46:52.280 you know, product and software, and we made a run 1:46:52.320 --> 1:46:53.880 at it. We built a product that would have been 1:46:53.880 --> 1:46:58.200 competitive Spotify. There were some progressive people in the industry 1:46:58.240 --> 1:47:01.040 that like the idea of migrating user from from Limeware 1:47:01.080 --> 1:47:03.120 to that, but ultimately, you know, it got shut down 1:47:04.560 --> 1:47:09.880 and then Spotify decided it wanted to start a US 1:47:09.920 --> 1:47:13.120 office and had heard that you know, I and a 1:47:13.120 --> 1:47:15.400 couple other folks were you know, trying to make this 1:47:15.439 --> 1:47:18.080 thing happen in Limeware and reach out, and that's where 1:47:18.080 --> 1:47:20.640 we started talking about starting the US team for Spotify. 1:47:21.320 --> 1:47:25.320 They found you. Yeah, okay, so what year do you 1:47:25.320 --> 1:47:26.600 start working for Spotify? 1:47:27.560 --> 1:47:28.679 February twenty eleven. 1:47:30.240 --> 1:47:34.880 Okay, so what was your job then? 1:47:35.479 --> 1:47:39.320 In the beginning, it was building out a US product team. 1:47:39.760 --> 1:47:41.880 So the whole company was, you know, one hundred and 1:47:41.920 --> 1:47:45.599 fifty folks, mostly in Sweden at that time, but we 1:47:45.640 --> 1:47:48.479 wanted to have a tech team in the US, and 1:47:48.800 --> 1:47:54.080 initially we were building our you know, we decided to 1:47:54.080 --> 1:47:57.280 get into recommendation. Spotify had never done recommendation prior to that. 1:47:57.880 --> 1:48:00.400 We decided to build our own recommendation features up a 1:48:00.400 --> 1:48:04.880 team to do that. We were also building the the 1:48:04.920 --> 1:48:07.479 ad support of the free tier, how to run ads 1:48:07.479 --> 1:48:10.200 and also how to kind of construct the freemium model, 1:48:10.280 --> 1:48:13.240 what you get for free, what you need to you know, 1:48:13.360 --> 1:48:15.679 get by converting. Those were some of the initial things 1:48:15.680 --> 1:48:18.519 that I was accountable for when it was the US team. 1:48:19.640 --> 1:48:21.559 And how did you move up the ladder to where 1:48:21.600 --> 1:48:22.240 you are now. 1:48:24.320 --> 1:48:30.040 Well, probably the biggest change that happened was Daniel. I 1:48:30.080 --> 1:48:35.759 think it was probably twenty fifteen or something. Daniel, our CEO, said, 1:48:37.760 --> 1:48:43.479 we really need to have a creator team. We really 1:48:43.479 --> 1:48:46.080 thought of ourselves as we license music and then we 1:48:46.080 --> 1:48:49.160 have a consumer product. You know, we didn't have we 1:48:49.160 --> 1:48:51.400 didn't have the idea of a of a creator team 1:48:51.439 --> 1:48:55.439 back then. But at that time, like if you think 1:48:55.479 --> 1:48:57.920 the misconceptions in the industry today are bad, I mean 1:48:58.000 --> 1:49:00.800 then it was like no artist knew whether they had 1:49:00.840 --> 1:49:03.280 ten streams on Spotify or a million streams, Like it 1:49:03.320 --> 1:49:07.439 was a total black box and we really needed to 1:49:07.479 --> 1:49:11.040 build a bridge. And so he asked me, I had 1:49:11.120 --> 1:49:12.640 like a team of I don't know, one hundred and 1:49:12.640 --> 1:49:15.360 two hundred folks, and he was like, yeah, I want 1:49:15.360 --> 1:49:18.200 you to give all that up and start this new thing. 1:49:18.560 --> 1:49:20.280 It'll just be you in the beginning and build up 1:49:20.280 --> 1:49:21.800 some you know, figure out what we should do on 1:49:21.840 --> 1:49:26.320 the creator side. And that kind of felt daunting or 1:49:26.320 --> 1:49:27.920 and exciting at the time, but that was kind of 1:49:27.960 --> 1:49:30.400 a big turning point. Because everything that I've done since then, 1:49:30.520 --> 1:49:34.360 building out Spotify for artists are business on the supply 1:49:34.439 --> 1:49:36.960 facing side, and then now you know, leading the music 1:49:37.240 --> 1:49:40.639 vertical more broadly is all kind of built on getting 1:49:40.680 --> 1:49:44.840 really close to the artist's side, what they need, what 1:49:44.960 --> 1:49:47.639 they want more out of Spotify. That's, you know, really 1:49:47.680 --> 1:49:49.320 what I've been focused on for the last ten years. 1:49:50.479 --> 1:49:51.320 Do you have stock? 1:49:53.320 --> 1:49:56.160 You know, like all employees, you get you know, stock 1:49:56.200 --> 1:49:58.519 as part of your package. 1:49:58.760 --> 1:50:02.479 Well, when public, do you already have an interest? Yeah? 1:50:02.560 --> 1:50:05.200 I mean even from the beginning when because I joined 1:50:05.439 --> 1:50:07.360 what seven eight years before we went public? 1:50:07.400 --> 1:50:09.200 So and have you sold any stock? 1:50:11.200 --> 1:50:15.240 I'm not sharing my you know, personal uh, you know, 1:50:15.360 --> 1:50:19.200 financial stuff, but I've sold some of hold some Yeah. 1:50:19.240 --> 1:50:23.800 Well I mean it launched, yeah, went down ultimately, and 1:50:23.880 --> 1:50:24.840 now it's through the roof. 1:50:25.360 --> 1:50:25.680 Mm hm. 1:50:27.120 --> 1:50:30.040 You know, is this like a traditional startup if you 1:50:30.080 --> 1:50:33.439 wanted to quit your job, would you have to continue 1:50:33.479 --> 1:50:33.840 to work? 1:50:35.840 --> 1:50:39.160 I mean, look, in the grand scheme of things, like 1:50:40.800 --> 1:50:44.920 the success I've had is any much greater than anything 1:50:44.960 --> 1:50:48.680 I was ever hoping for. Like I'm you know, I 1:50:48.800 --> 1:50:53.799 consider myself very lucky in that way. I am obsessed 1:50:53.800 --> 1:50:55.720 with what I do. I love what we're doing. I 1:50:55.720 --> 1:50:58.000 feel really passionate about what I'm doing. That's the primary, 1:50:58.160 --> 1:51:00.200 you know, reason that I do what I do for sure. 1:51:01.800 --> 1:51:05.560 Yeah, So what are the opportunities left for you in Spotify? 1:51:07.439 --> 1:51:10.679 Well, look, I go back to I think there's two 1:51:10.720 --> 1:51:14.360 big things in terms of our overall mission to grow. 1:51:15.760 --> 1:51:20.440 You know, one of the things I love about this Spotify, 1:51:20.479 --> 1:51:23.680 but streaming in general, the incentives are so aligned. We 1:51:23.720 --> 1:51:25.960 want to grow a revenue, and every time we grow revenue, 1:51:25.960 --> 1:51:28.880 two thirds of that goes to rights holders. So a 1:51:28.920 --> 1:51:30.800 lot can be made of disputes in the industry, but 1:51:30.840 --> 1:51:32.680 by and large, what's good for us is good for 1:51:32.720 --> 1:51:36.240 the industry. That is just true. And as we go 1:51:36.320 --> 1:51:39.320 about trying to grow the pie together. The two big 1:51:39.320 --> 1:51:41.640 things that stand out to me is one what I 1:51:41.680 --> 1:51:45.040 said before, we have five hundred six five hundred and 1:51:45.040 --> 1:51:47.599 six hundred million people paying for a music subscription around 1:51:47.640 --> 1:51:50.400 the world. That's awesome. I don't think anyone thought we'd 1:51:50.400 --> 1:51:52.479 get there. But there's billions of people in the world, 1:51:52.520 --> 1:51:54.920 and we need to figure out how we're going to 1:51:55.000 --> 1:51:57.639 adjust the offering and the freemium funnel and the different 1:51:57.640 --> 1:51:59.559 skews to get everyone in the world paying for music. 1:51:59.600 --> 1:52:02.479 So I think that's a really fun opportunity. And then 1:52:02.560 --> 1:52:04.680 the second one is is kind of breaking out of 1:52:04.680 --> 1:52:08.080 the one size fits all. I think for the vast, 1:52:08.160 --> 1:52:11.879 vast majority of people paying one hundred and twenty dollars 1:52:12.200 --> 1:52:17.519 a year ish I'm rounding in a music subscription raises 1:52:17.560 --> 1:52:19.800 their total amount of spend because they wouldn't have spent 1:52:19.840 --> 1:52:22.200 one hundred and twenty dollars, you know, in a previous era. 1:52:22.400 --> 1:52:26.600 But for some the biggest super fans, that's under optimizing, 1:52:26.680 --> 1:52:28.920 like they would be willing to spend more and they're 1:52:28.960 --> 1:52:32.120 more passionate about music, and there's opportunities to make sure 1:52:32.160 --> 1:52:35.960 that there's more points along the supply demand curve where 1:52:36.000 --> 1:52:40.400 people can you know, get a more valuable service and 1:52:40.640 --> 1:52:42.960 drive more revenue to the industry in return. So I 1:52:43.040 --> 1:52:45.520 think both of those things are huge opportunities. 1:52:45.640 --> 1:52:48.800 Okay, just go because it has been such you know, 1:52:49.080 --> 1:52:54.799 a talking point. Yeah, other than higher quality music which 1:52:55.000 --> 1:52:59.280 Amazon and Apple bake in for the same price, what 1:52:59.360 --> 1:53:01.759 am I going to from my additional dollars? 1:53:02.240 --> 1:53:08.880 Well, first of all, let's let's talk about high fidelity music. 1:53:13.200 --> 1:53:18.200 So if you go back and in the recent history 1:53:18.200 --> 1:53:22.400 of the last few years. I don't think there's any 1:53:22.400 --> 1:53:27.719 evidence that hi fi is something that gets more people 1:53:27.920 --> 1:53:31.520 in the boat. If you don't have a music subscription 1:53:31.600 --> 1:53:35.040 at all. Is adding high fi going to be the 1:53:35.120 --> 1:53:36.800 thing that gets you over the hump to say, oh, 1:53:36.840 --> 1:53:39.200 now I want a music subscription. I don't think so. 1:53:39.360 --> 1:53:42.200 I haven't seen any evidence of that. So I think 1:53:42.200 --> 1:53:46.640 it's a pretty big missed opportunity to just chuck it 1:53:46.680 --> 1:53:50.800 in premium. I think that it under leverages what it 1:53:50.840 --> 1:53:53.719 can do for the industry because really it's the most 1:53:53.840 --> 1:54:00.479 leaned in, passionate people who care about that, and I 1:54:00.520 --> 1:54:02.200 think you have to charge more. So I don't take 1:54:02.200 --> 1:54:04.960 for granted that the status quo as it exists today 1:54:05.520 --> 1:54:09.280 will exist or should exist in that way. But then, 1:54:09.680 --> 1:54:14.759 you know, to answer your question beyond that, I think 1:54:14.800 --> 1:54:18.479 that you know, if you think about what Spotify is 1:54:18.960 --> 1:54:21.720 today compared to what it was ten years ago, we've 1:54:21.720 --> 1:54:26.559 added tons of stuff that probably appeals more to you know, 1:54:26.880 --> 1:54:32.280 big fans rather than casual listeners. And we've got a 1:54:32.320 --> 1:54:35.920 road map of you know, twenty thirty forty things that 1:54:35.960 --> 1:54:39.480 are going to be in that category rolling forward. So 1:54:39.800 --> 1:54:41.760 I think there's going to be an opportunity to always 1:54:41.840 --> 1:54:45.560 have a version that's you know, best in class and 1:54:45.600 --> 1:54:49.160 appeals to the most ardent fans, while the vast majority 1:54:49.200 --> 1:54:52.080 of people are totally satisfied with you know, the proposition 1:54:52.120 --> 1:54:52.919 they get on premium. 1:54:53.480 --> 1:54:57.240 What percentage of people would upgrade to this higher level 1:54:57.720 --> 1:55:00.640 for you to be satisfied for the company to be honest. 1:55:00.400 --> 1:55:02.960 Fine, I don't know. It's all upside, So I don't 1:55:02.960 --> 1:55:05.440 think there needs to be a certain number to be satisfied. 1:55:06.280 --> 1:55:09.080 It's it's it's pure incremental, both for us and for 1:55:09.280 --> 1:55:10.240 everyone in the industry. 1:55:11.120 --> 1:55:13.800 Well, I mean, if you want to go deeper, Spotify 1:55:13.920 --> 1:55:18.320 stock is going way up. Analysis says, you know, there's 1:55:18.400 --> 1:55:22.840 constant innovation. You look at the labels, their stock has 1:55:22.880 --> 1:55:26.280 been somewhat morribn because they say, well, you know, there's 1:55:26.320 --> 1:55:32.680 no innovation, so they're banking on this additional tier. Lucy 1:55:32.800 --> 1:55:34.840 Grange is going on and on, We're going to tap 1:55:34.880 --> 1:55:40.000 into the super fan. Okay, they're not. I mean, yes, 1:55:40.480 --> 1:55:45.040 on Netflix you can pay extra for four K Okay, 1:55:45.440 --> 1:55:49.440 but on most of these other streaming services you pay 1:55:49.520 --> 1:55:53.160 maybe at you know, compared to music streaming, television is 1:55:53.200 --> 1:55:57.320 so fuck up and antiquated My point is, I cannot 1:55:57.480 --> 1:56:03.200 think of a similar business. We're the main product is 1:56:03.240 --> 1:56:06.680 not what you're upgrading. We're of a significant you know. Listen, 1:56:07.680 --> 1:56:09.760 I just got to bug up my rear end about 1:56:09.800 --> 1:56:13.400 this because they've been saying this to analysts. You know, 1:56:14.520 --> 1:56:18.400 title never turned into anything. You know, originally it was 1:56:18.440 --> 1:56:22.800 a Norwegian company that was something different whatever they were incompetent. 1:56:23.760 --> 1:56:27.800 So I subscribe to my music service for the music 1:56:29.320 --> 1:56:32.480 unless you're gonna let me meet the act or you 1:56:32.520 --> 1:56:36.520 get me better concert tickets. You know, what is it 1:56:36.600 --> 1:56:37.440 you're gonna give me. 1:56:39.240 --> 1:56:41.240 I think you're gonna like it. We'll see you. We'll 1:56:41.280 --> 1:56:43.560 talk in a year and we'll see if you like it. 1:56:43.720 --> 1:56:45.600 But I think look, in a lot of ways, we've 1:56:45.600 --> 1:56:50.640 already started on the journey. Like you know, to your point, 1:56:50.800 --> 1:56:54.920 with family plans, you have more parental controls, you have 1:56:54.960 --> 1:56:59.520 more accounts. We added audio books as an additional value proposition. 1:56:59.600 --> 1:57:02.800 It's not like this is a brand new, you know idea. 1:57:02.880 --> 1:57:05.680 We have reps under our belt for you know, how 1:57:05.720 --> 1:57:09.280 to version the skews. I'm you know, I'm very optimistic 1:57:09.320 --> 1:57:11.960 that there'll be opportunity to grow and change. 1:57:12.000 --> 1:57:14.720 But let's just say you know, we're all very familiar 1:57:14.800 --> 1:57:17.680 with the different things et SAT round audiobooks don't take 1:57:17.720 --> 1:57:20.880 from the royalty stream, and then the recent thing of 1:57:20.920 --> 1:57:24.120 you know, lowering royalties overall through other things. Let's leave 1:57:24.160 --> 1:57:28.400 all that aside. I'm a music fan. You want me 1:57:28.480 --> 1:57:33.120 to pay an additional ten dollars other than a higher 1:57:33.200 --> 1:57:38.560 quality sound blue skyet. I can't think of anything you 1:57:38.640 --> 1:57:40.640 can give me the way. I'm going to say to 1:57:40.680 --> 1:57:44.280 a significant number of people, that's better because it's about 1:57:44.320 --> 1:57:48.040 the music. We've already established that the record companies don't 1:57:48.040 --> 1:57:52.280 want exclusives, So yeah, you don't want to get into 1:57:52.320 --> 1:57:55.600 a war of you can listen to it before everybody else. 1:57:55.680 --> 1:58:00.760 That'll be a disaster. As I say, your point of Spotify, 1:58:00.800 --> 1:58:05.200 it's total upside. I get it, okay, but the record 1:58:05.360 --> 1:58:11.360 industry is banking on this, okay, and so far they've 1:58:11.440 --> 1:58:14.600 filled in the blanks not at all. They say, well, 1:58:14.600 --> 1:58:18.840 you don't higher quality stream and then nothing, we're gonna 1:58:18.880 --> 1:58:22.960 pay the superfans. I was that person. You know, I'm 1:58:23.000 --> 1:58:25.200 not paying to begin with. About one hundred and twenty 1:58:25.240 --> 1:58:27.680 dollars a year is an incredible bargain relative to what 1:58:27.720 --> 1:58:31.839 I used to spend on music. But I was buying music. 1:58:32.760 --> 1:58:35.080 That was it. In addition, if I was a big 1:58:35.160 --> 1:58:38.720 music fan, I knew we could get the cheapest records. Yeah, 1:58:38.880 --> 1:58:40.920 I might go for the contract tickets. I don't know 1:58:40.960 --> 1:58:44.840 where else in the ecosystem there there's a spot for 1:58:44.880 --> 1:58:47.280 me to give it. You're gonna give me more services 1:58:47.840 --> 1:58:50.320 that doesn't speak to the music. The US, the big 1:58:50.360 --> 1:58:53.240 super fan, they know what they want to listen to. 1:58:53.480 --> 1:58:55.480 You're gonna give me audio bunk. You can give me 1:58:55.560 --> 1:58:58.879 a blowjob whatever. It's got nothing to do with the music. 1:59:01.040 --> 1:59:03.680 Well, look like I said, I mean, we're gonna do 1:59:03.720 --> 1:59:05.800 it our own way. I'm sure that there's gonna be 1:59:05.800 --> 1:59:08.600 twists and turns along the way. And then you'll be 1:59:08.640 --> 1:59:10.640 the judge. I'll read your letter and we'll see what 1:59:10.760 --> 1:59:11.120 you think. 1:59:12.240 --> 1:59:15.000 Okay, before I leave you, Oh, Bob. 1:59:14.840 --> 1:59:17.800 Hold on one second. You earlier said something I have 1:59:17.880 --> 1:59:20.880 to react to because I'm too easily triggered. You said 1:59:21.880 --> 1:59:25.120 audio books recent thing, we lowered the royalty rate. I 1:59:25.200 --> 1:59:28.360 just want to be clear. Our payouts have only gone 1:59:28.440 --> 1:59:31.040 up every year they've gone up. There has not been 1:59:31.080 --> 1:59:32.400 a lowering of our Wait. 1:59:32.240 --> 1:59:38.520 Wait, wait, wait wait wait, audio books Spotify said would 1:59:38.520 --> 1:59:40.360 not affect music royalties. 1:59:41.000 --> 1:59:43.240 Yeah, it's taken out of a different different. 1:59:42.960 --> 1:59:49.640 But this is all public information. Spotify is going to 1:59:49.720 --> 1:59:55.640 a bundle model such that less of the subscription price 1:59:55.760 --> 1:59:57.720 would go to music royalties. 1:59:58.920 --> 2:00:02.440 Yeah, so can I expand on that? 2:00:02.800 --> 2:00:04.440 You got the platform, go for it? 2:00:04.520 --> 2:00:09.520 Okay, so total royalties going up? You're right that with 2:00:09.680 --> 2:00:12.560 bundles the royalty rate does go down. Of course it 2:00:12.600 --> 2:00:15.440 needs to because you need to accommodate at putting other 2:00:15.440 --> 2:00:17.920 things in bundle. But let me explain how we got here. So, 2:00:19.240 --> 2:00:23.800 as you well know, statutory rates in the US, these 2:00:23.840 --> 2:00:28.920 are heavily negotiated things every four years or so. We 2:00:28.960 --> 2:00:33.600 had phono records for We settled in twenty twenty two 2:00:33.720 --> 2:00:39.600 after a long negotiation about how these new rates, these 2:00:39.640 --> 2:00:42.320 new statutory rates in the US should work. And if 2:00:42.360 --> 2:00:46.040 you go back to the press release that announced that 2:00:46.120 --> 2:00:49.480 deal in twenty twenty two, it talked about two things. 2:00:49.880 --> 2:00:52.560 Publishers were getting the headline rate increase that they were 2:00:52.560 --> 2:00:57.840 looking for, and the streaming services were getting the bundle 2:00:57.840 --> 2:01:00.520 accommodations to be able to have lower to rate for 2:01:01.280 --> 2:01:05.440 services that were a bundle. The deal was celebrated by 2:01:05.440 --> 2:01:09.720 both sides. Bundles are important. The reason bundles are important 2:01:09.760 --> 2:01:12.400 is because there's a lot of people like you and 2:01:12.440 --> 2:01:16.120 me that would gladly pay for a pure play music subscription, 2:01:16.640 --> 2:01:18.320 but when we want to get the world to pay 2:01:18.320 --> 2:01:20.400 for music, there's a lot of people who need maybe 2:01:20.400 --> 2:01:23.360 a couple other things to get interested. The vast majority 2:01:23.400 --> 2:01:28.400 of YouTube music subscribers are to YouTube Premium that includes 2:01:28.520 --> 2:01:31.240 music and ad for YouTube. The vast, vast majority of 2:01:31.280 --> 2:01:36.320 Amazon subscribers are the kind that get music bundled with 2:01:36.400 --> 2:01:38.240 Prime and all the other stuff that comes with Prime, 2:01:38.320 --> 2:01:41.280 not the pure play music subscription. Apple's got the Apple 2:01:41.320 --> 2:01:44.680 one thing with music and you know eight other things. 2:01:45.240 --> 2:01:50.280 So this is important to grow the pie. Spotify last 2:01:50.320 --> 2:01:53.480 year or recently we added audiobooks. That was a big move. 2:01:53.600 --> 2:01:56.280 It helped us grow revenue, it helped us convert better, 2:01:57.600 --> 2:02:01.040 It added more value to the subscription so we could 2:02:01.040 --> 2:02:03.200 get more people in the boat and grow the pie. 2:02:03.800 --> 2:02:08.720 And because of that, Spotify, just like YouTube with YouTube 2:02:08.720 --> 2:02:11.240 Premium and Amazon with Prime, it became a bundle in 2:02:11.280 --> 2:02:13.800 the same way, and so we were on the bundle rate, 2:02:13.840 --> 2:02:16.680 which is a lower royalty rate for on the publishing side, 2:02:17.440 --> 2:02:22.800 than the headline rate that was challenged in court. The 2:02:23.000 --> 2:02:26.120 judge looked at it, dismissed the lawsuit with prejudice, and said, 2:02:26.360 --> 2:02:30.880 Spotify is doing exactly what the deal was as negotiated. 2:02:30.880 --> 2:02:35.440 They're paying exactly as you agreed to pay in this deal. 2:02:37.760 --> 2:02:42.400 So because of that, the facts are pretty clear about 2:02:42.800 --> 2:02:45.440 what happened beginning, middle, and end. That being said, we 2:02:45.480 --> 2:02:48.920 don't want to be focused on arguing about the past 2:02:49.040 --> 2:02:51.240 and a deal we did in twenty twenty two. We 2:02:51.280 --> 2:02:53.560 want to figure out how to grow the pie moving forward. 2:02:54.080 --> 2:02:58.000 So the deals we did recently with Warner and Universal 2:02:58.000 --> 2:03:01.360 on the publishing side out us to say, yeah, let's 2:03:01.360 --> 2:03:03.720 have the rates go up on the publishing side, even 2:03:03.760 --> 2:03:09.160 four bundles. But in coordination with that, let's have Spotify 2:03:09.200 --> 2:03:12.960 get rights that it needs to innovate and have new 2:03:13.000 --> 2:03:15.080 propositions and things that are going to help us grow 2:03:15.080 --> 2:03:17.360 the pie in other ways. And that's been great. So 2:03:17.400 --> 2:03:19.800 now we can put this you know, accounting dispute behind 2:03:19.840 --> 2:03:22.760 us with Universal and Warner, and now that that template 2:03:22.840 --> 2:03:26.360 is there, I'm very optimistic that we can have that 2:03:26.400 --> 2:03:29.280 same you know thing roll out across the industry. But 2:03:29.560 --> 2:03:32.480 I just wanted to be clear that yes, the royalty 2:03:32.520 --> 2:03:34.600 rate is lower for the bundle products than it is 2:03:34.600 --> 2:03:36.920 for the pure play products, but in terms of total 2:03:36.920 --> 2:03:40.320 payouts to publishers, they went up more than ten percent 2:03:40.400 --> 2:03:42.680 last year. They didn't go down because of that royalty rate. 2:03:43.160 --> 2:03:45.560 Our total payouts to publishers have gone up every year, 2:03:45.600 --> 2:03:47.320 and last year was no exception. So I just wanted 2:03:47.360 --> 2:03:49.240 to make sure that that wasn't, you know, lost in 2:03:49.280 --> 2:03:50.560 the in the soup. 2:03:51.640 --> 2:03:54.440 You get the last word, Charlie. I want to thank 2:03:54.480 --> 2:03:57.960 you for taking this time with my audience, been very informative. 2:03:58.480 --> 2:03:59.960 Thanks so much for having me as a present. 2:04:00.960 --> 2:04:03.480 Till next time. This is Bob LOVESI