5 revelations from Daniel Ek’s social Q&A about Spotify
Daniel Ek, Founder and CEO ofSpotify, answered questions on social Q&A siteQuora this week about his future plans for the streaming service and his response to negative claims about royalties and financial challenges.
In the list below, TMN offers up itsfive favourite revelations from Ek.
The US market wasn’t ready for streaming when Spotify launched
While Sweden is Ek’s home country, he said he chose to launch Spotify in the territoryrather than the US, because Sweden’s market was more mature.
“Had we started with the US there’s no way we would still be around. The US market just wasn’t ready,” he said.
Make no mistake, Sweden was still reticent to embrace streaming. Ek said Spotify launched during the time when the country’s Pirate Party (a political organisation wanting to legalise internet file-sharing) had 7% of all votes.
“People thought we were crazy to work with the music industry. The general thinking was to just do whatever you wanted with music and then ask for forgiveness later.”
Big platforms don’t like partnerships; Spotify does
When asked how Spotify will compete with juggernaut services like Apple, Google, and Amazon he said the three companies “have music as a hobby”.
“The big platform companies don’t generally like partnering. We do. This opens up lots of doors,” he said.
Ek clarified that his comment wasn’t to say that Spotify doesn’t monitor its competition: “[…] of course we do, it would be crazy not to,” he said. “But we think about them more in terms of how to make Spotfy so easy, so fun, and so relevant for our users that whether you wait on lines for every new Apple device, get your groceries from Amazon Prime, or use every Google mail and workplace app, you still want to listen to music on Spotify because it’s the best experience there is.”
The Taylor Swift debacle renewed their focus on communication with artists
When Taylor Swift made the decision not to make her Grammy-winning album 1989 available on Spotify, the streaming leader held its ground– much to the displeasure of pop fans the world over. Last year Adele made the same decision when she released her global #1 25.
A Quro user posed the question: ‘What is Spotify doing to make sure that hot artists like Adele and Taylor Swift don’t hold out?’
Naturally, Ek was entirely diplomatic in his answer (“[…] We’re trying to keep doing better what we’ve been trying to do since we started Spotify”), but said the company is building on its relationships with content creators to they can both understand the business and find new ways to help them.
“On the one hand, we’re trying to keep doing better what we’ve been trying to do since we started Spotify – deliver great value to consumers and create value for artists by making sure that they are paid fairly for their amazing music and that we help them find new audiences in the process.
“At the same time, we’re also working harder than ever to build ties to the creative community – artists, songwriters, producers and others – so that they understand how our business works and how committed we are to helping them succeed. And part of both of those things – creating value and communicating better – means that we are also focused on hearing from creators about how we can help them, how we can create new tools that use our platform to help them find new fans, connect with those fans, learn about their audiences, get them to live shows, and more.”
The ongoing US$200m lawsuitbetween Spotify and artist rights combatantDavid Lowery over mechanical licensing payments, or the open letter by Aloe Blacc about fair compensation from streaming services, or even the abundance of indie artists who balked at the royalty rate via News Week;these are just a few examples of artists who aren’t satisfied with the royalties they receive from streaming.
However, when the issue was addressed by Ek who said while it’s understandable for people to struggle with the shift from an ownership model to an access model, streaming is responsible for the growth in music.
“Look, we pay the great majority of our revenue back to the music industry. And as we grow, that revenue is really making a difference. Many people don’t realize that the music industry was in decline throughout all the download years (with a one year exception in which it was basically flat).
“Now, finally, after years and years of decline, music is growing again, streaming is behind the growth in music, and Spotify is behind the growth in streaming. So ultimately, we think the best measure of our contribution to the industry will be results – results that will give thousands and thousands of artists, songwriters, producers and so on the chance to do what they love, and their fans love, while being paid fairly for doing it. We love music, we love all the amazing people who make it, and we want to succeed together.”
Daniel Ek says his role is now “part janitor and part editor”
From building websites at just 16-years-old, to becoming the founder of the leading freemium streaming service worldwide, Daniel Ek has taken his idea to put the globe’s entire music catalogue in your pocket and made it one of the biggest online companies in the world, worth an estimated US$8 billion.
When asked how he spends his day he said:
“As an entrepreneur you go through various transitions. At first you are the Product Manager, then you become the HR person and so it evolves. These days I’m part janitor and part editor. My job is to troubleshoot and fix broken stuff high and low in the business while at the same time looking ahead and editing our vision so it gives our team the right context they need to execute.
“One day you might meet with a big name rockstar, the next you sit down with a product team and or review seating plans for the office. No days are the same, though, which makes it hugely exciting. There are always a ton of new things to learn from all the smart people in the company and the ecosystem around it.”