Spotify started out as a legitimate way to stream popular music. Then it flirted without success, but also became a video company. Now it’s trying a new identity: it wants normal people, not just people you’ve heard of, to start uploading songs and podcasts – and then it wants to make money giving those songs and podcasts to many, many more people to issue.
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 music labels, and last year he paid a lot of money to sign podcast king Joe Rogan. And that’s also why it’s working with Barack Obama; the service has just announced that Bruce Springsteen and the former president have a new Spotify podcast where they discuss ‘modern masculinity’.
But the main message behind a promotional event held by Spotify on Monday, where the company announced a series of new products and several new podcasts, was aimed at a much larger group of musicians and podcasters who would never be known at Obama level not, or even a little bit familiar: Spotify wants everyone to upload their content to Spotify.
Spotify thinks it can make money by distributing the goods to hundreds of millions of people through a combination of advertising and subscription fees. Theoretically, some of it could go back to the people who made the stuff in the first place.
After the event, I spoke to Spotify’s content boss, Dawn Ostroff, a veteran of the magazine and TV business, about Spotify’s big-screen ambitions and how it’s navigating the transition from a content distributor to a content owner. And specifically how it responds to the challenges that Joe Rogan’s employer is.
Here is an edited transcript of our conversation:
Peter Kafka
Who is this event aimed at? It seems to be reminiscent of all the streaming video launches that companies like Apple and HBO and Disney have done over the past year – aimed at investors but also at consumers.
Dawn Ostroff
Actually, we are trying to reach creators. For us, it was to be able to show where we come from and where we intend to look for creators.
If you think back to what Daniel [Ek]Our mission and vision was early on for Spotify, it was how we connect millions of artists and creators with billions of users. It declared that we had come a long way, that we still had a long way to go, and where we were going. And also be able to communicate creators about the different tools, the different products we have, to help and support them in our journey in terms of not only creation but also monetization, and of course achievement.
Peter Kafka
There was a long conversation with Spotify and creators / artists, until the earliest days, where artists complained that they did not get value from Spotify, but Spotify got value from it. How much of the discussion indicated what you do today – the way you talk to artists and what you do for it?
Dawn Ostroff
Well, we’ve been dealing with the labels. It was pretty transparent: people know what we pay out to the artists and their labels. But I really think part of Spotify is about democratizing some 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 just like with podcasts, there is a lot of room for people who are interested in having podcasts, which are not the best podcasters in the world.
And the idea that you can globalize the platform in a way that music goes beyond all bounds and boundaries, and in the same way we see it with podcasts – it really unites the world.
You need look no further than the show of all the major record labels. The music catalogs hold record quantities. There are hundreds of artists who now earn millions of dollars through Spotify alone. And that’s part of what we wanted to illustrate today.
Peter Kafka
One thing that has changed since Spotify was launched is the way consumers and certainly regulators view major technology platforms. They have generally had favorable feelings about them, and there is now much more suspicion about it. You have your own complaint about Apple – you say it has too much power. But it strikes me that Spotify has so much power in audio that there will probably be even more suspicion about its motives, and what happens if you give Spotify your data or your livelihood.
Dawn Ostroff
To begin with, compared to Google, Amazon or Apple, we are still very small. We are not in the league. But we are incredibly focused on sound. And there must be competition for the technical giants. And that’s what we are. We compete for them in this one area.
Peter Kafka
Since we’re talking about the giants: Apple has not been interested in making a business out of podcasting for years. It seems to have woken up – I think because of Spotify – and it looks like it’s now planning to invest in podcasting and offer a paid podcast service. What do you think of Apple starting to compete with you in podcasting?
Dawn Ostroff
I can not comment on their plans. And honestly, I have no idea what their plans are. But we think any business that spends money on sound space is smart. We think the audio industry is still growing – we’ve seen an explosion, but we still do not think we’re near plateau.
Peter Kafka
You spent almost $ 1 billion on podcast startup and content. When Spotify started buying podcast assets for the first time, you said you could spend $ 500 million in the first year. Do you think that you will continue to spend on this track?
Dawn Ostroff
Our goal is to keep growing. I can not comment on the exact figure. But we strive for it because it works.
Peter Kafka
When Spotify signed Joe Rogan, people like me wondered what would happen if Joe Rogan offended anyone, and it happened. And it turns out that some people work at Spotify.
What kind of discussions did you have about what kind of setback Rogan is going to cause? And did the discussions include what would happen if your own employees were upset?
Dawn Ostroff
In terms of Joe: he is held according to the same policy that everyone on our platform must adhere to. And for us, it’s about a diverse voice of people, for a global audience – a wide and varied group of people listening to Spotify. And he happens to be very popular.
I can not comment on our internal discussions, but debate is also a big part of Spotify’s internal business culture. And it’s not just happening to something like Joe Rogan, but it’s happening to different parts of our business. This is nothing new to us.