Spotify started out as a legal way to stream popular music. He then flirted, unsuccessfully, with becoming a video company as well. Now you’re testing a new identity: You want normal people, not just people you’ve heard of, to start uploading songs and podcasts, and then you want to make money distributing those songs and podcasts to many, many more people.
Spotify still wants the biggest stars in the world on their service. That’s why he spends most of his money on licensing deals with the big record labels, and why he paid a ton of money to hire podcast king Joe Rogan last summer. And it’s also the reason you’re working with Barack Obama; the service just announced that Bruce Springsteen and the former president have a new Spotify podcast talking about “modern manhood.”
But the main message behind a promotional event Spotify held on Monday, where the company announced a slew of new products and several new podcasts, was aimed at a much larger group of musicians and podcasters who will never be famous to the level. Obama, not even a little bit. Little Famous: Spotify wants everyone to upload their content to Spotify.
Spotify believes that it can make money distributing such material to hundreds of millions of people through a combination of advertising and subscription dollars. In theory, some of that can go back to the people who did things in the first place.
After the event, I spoke with Spotify’s head of content, Dawn Ostroff, a veteran of the magazine and television business, about Spotify’s overall ambitions and how it is navigating the shift from content distributor to content owner. . And specifically, how you are responding to the challenges that come with being Joe Rogan’s employer.
Here is an edited transcript of our conversation:
Who is this event for? It seemed reminiscent of all the streaming video launch events that companies like Apple, HBO, and Disney have held over the last year, sort of aimed at investors, but also at consumers.
In fact, we are trying to reach the creators. For us, it was about being able to show where we came from and where we plan to go for creators.
When you think about what Daniel [Ek]The mission and vision of Spotify was from the beginning, it was how we connect millions of artists and creators with billions of users. This explained that we have come a long way, we still have a long way to go and where we are on the way. And also to be able to communicate to creators the different tools, the different products that we have, to help and support them in our journey in terms not only of creation, but also of monetization and of course reach.
There has been a long-running discussion with Spotify and creators / artists, since its early days, where artists were complaining that they were not getting value from Spotify, but Spotify was getting value from them. How much of that discussion informed what you are doing today, both the way you talk to the artists and what you are doing for them?
Well, we have agreements with the labels. That has been quite transparent: people know what we pay, with our income, to the artists and their labels. But I think part of what Spotify is really about is democratizing a form of distribution for artists so they can experiment, create, and hopefully grow. Because there is a lot of room for artists who are not necessarily the best artists in the world. And similarly for podcasters, there is plenty of room for people who are interested in having podcasts, who are not the best podcasters in the world.
And the idea that you can globalize the platform in a way that music is crossing all limits and boundaries, and similarly, we’re seeing it with podcasts – it’s really unifying the world.
You don’t have to look beyond the performance of all the major record labels. Music catalogs are selling for record amounts. There are hundreds of artists now making millions of dollars from Spotify alone. And that’s part of what we wanted to be able to illustrate today.
One thing that has changed since Spotify’s inception is the way that consumers and certainly regulators view the big tech platforms. In general, they had favorable feelings towards them and now there is much more suspicion towards them. He has his own complaint about Apple: he says it has too much power. But it amazes me that in audio, Spotify has so much power that there are likely even more suspicions about its motives and what happens when you give Spotify your data or your livelihood.
To begin with, compared to Google, Amazon or Apple, we are still very small. We are not in that league. But we are incredibly focused on audio. And there should be competition for the tech giants. And that’s what we are. We are competition for them in this area.
Since we’re talking about the giants: For years, Apple didn’t seem interested in doing a business with podcasting. It seems like you’ve woken up, I guess thanks to Spotify, and now it seems to have some plans to invest in podcasting and offer a paid podcast service. What do you think of Apple starting to compete with you in podcasting?
I cannot comment on their plans. And honestly, I have no idea what their plans are. But we think that any company that is spending money in the audio space is smart. We believe that the audio industry is still growing; we’ve seen an explosion, but we don’t think we’re anywhere near the plateau yet.
He has spent nearly $ 1 billion on content and podcast startups. When Spotify started buying podcast assets, you said you could spend $ 500 million in your first year. Do you think you are going to continue spending right now?
Our goal is to keep growing. I cannot comment on the exact figure. But we chase it because it’s working.
When Spotify hired Joe Rogan, people like me wondered what would happen when Joe Rogan offends someone, and that has happened. And it turns out that some people work on Spotify.
What kind of discussions did you have about any kind of setback that Rogan was going to generate? And did those discussions include what would happen if your own employees are upset?
In Joe’s terms: You have been subject to the same policies that everyone else on our platform must adhere to. And for us, it’s about having a diverse voice of people, for a global audience – a broad and diverse group of people who listen to Spotify. And it’s still wildly popular.
I can’t comment on our internal discussions, but the debate is also a big part of Spotify’s internal corporate culture. And it happens not just with something like Joe Rogan, but it happens with different areas of our business. It is nothing new to us.