Spotify was originally a legal way to stream popular music. Then it flirted with unsuccessfully become a video company, also. Now it’s trying a new identity: it wants ordinary people, not just people you’ve heard of, to upload songs and podcasts – and then make money to share those songs and podcasts with many, many more people.
Spotify still wants the world’s biggest stars to serve. Because of this, it spends most of his money on licensing deals with the major music labels and paid a ton of money last summer to sign podcast king Joe Rogan. And it’s also why it works with Barack Obama. The service just announced that Bruce Springsteen and the former president have a new Spotify podcast saying about “modern masculinity. ”
But the main message behind a The Spotify promotional event took place on Monday, where the company announced a slew of new products and several new podcasts, aimed at a much larger group of musicians and podcasters who will never be famous or even a little famous at the Obama level: Spotify wants everyone to upload their content to Spotify.
Spotify believes it can make money by distributing this stuff to hundreds of millions of people through a combination of advertising and subscription dollars. In theory, some of it could come back to the people who made the stuff in the first place.
After the event, I spoke to Spotify’s chief content officer, Dawn Ostroff, a veteran of the magazine and TV business, on Spotify’s great ambitions and how it is driving the transition from content distributor to content owner. And especially how it responds to the challenges of being Joe Rogan’s employer.
Here is an edited transcript of our conversation:
Who is this event aimed at? It seemed to be reminiscent of all of the streaming video launch events that companies like Apple, HBO, and Disney hosted over the past year – sort of a target audience for investors but also for consumers.
We are actually trying to reach out to the Creators. For us it was about showing where we come from and where we choose to be creators.
When you think back on Daniel [Ek]Spotify’s mission and vision was early on. This is how we connect millions of artists and creators with billions of users. This explained that we have come a long way, still have a long way to go, and where we are in the journey. And being able to convey to developers the various tools and products we have to aid them on our way not only in terms of creation but also in terms of monetization and of course reach.
There has been a longstanding discussion with Spotify and the creators / artists until the earliest days where artists complained that they were not getting value from Spotify but Spotify was getting value from them. How much of that discussion has informed about what you do today – both how you talk to artists and what you do for them?
Well, we have labels business. That was pretty transparent: people know what we pay out to the artists and their labels from our earnings. But I think part of what Spotify is all about is democratizing a form of distribution for artists so they can experiment, create and hopefully grow. Because there is a lot of space for artists who are not necessarily the top artists in the world. And similar to podcasters, there is plenty of room for people interested in podcasts who are not the best podcasters in the world.
And the idea that you can globalize the platform so that music crosses all borders, and similarly we see it with podcasts – it really unites the world.
Look no further than the performance of all the major record labels. The music catalogs are going to go for record amounts. Hundreds of artists make millions of dollars on Spotify alone. And we wanted to be able to illustrate that today.
One thing that has changed since Spotify launched is the way consumers, and certainly regulators, view large tech platforms. They generally had positive feelings towards them, and now there is a lot more suspicion about them. You have your own complaint about Apple – They say it has too much power. But it strikes me that Spotify has so much power in the audio space that there is probably even more suspicion of its motives and what happens when you give your data or your livelihood to Spotify.
First of all, we are still very small compared to Google, Amazon or Apple. We’re not in that league. But we are incredibly focused on audio. And there should be competition for the technology giants. And that’s us. We are competition for them in this one area.
Speaking of the giants, Apple didn’t seem interested in turning podcasting into a business for years. It seems to have woken up – I think because of 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 competing with you in podcasting?
I cannot comment on their plans. And in all honesty, I have no idea what your plans are. But we think any company that spends money in audio is smart. We believe the audio industry is still growing – we’ve seen an explosion, but we think we’re nowhere near a plateau.
You almost spent $ 1 billion for podcast startups and content. When Spotify first bought podcast assets, you said you could do it Spend $ 500 million in your first year. Do you think you will continue to spend on this clip?
Our goal is to keep growing. I can’t comment on the exact number. But we are pursuing it because it works.
What kind of discussions did you have about the kind of setback Rogan would create? And did these discussions include what would happen if your own employees were upset?
Regarding Joe, he followed the same guidelines that everyone else on our platform must follow. 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 remains very popular.
I can’t comment on our internal discussions, but the debate is also an important part of Spotify’s internal culture. And it’s not just happening to something like Joe Rogan, but also to different areas of our business. It is nothing new to us.