Spotify started out as a cool way to broadcast popular music. Then he flirted, unsuccessfully, to become a video company too. Now she is testing a new identity: she wants normal people, not just people you’ve heard of, to start sending songs and podcasts – and then she wants to make money by distributing those songs and podcasts to many, many other people.
Spotify still wants the world’s biggest stars in its service. That’s why he spends most of his money on licensing deals with major labels, and why he paid a ton of money to subscribe to podcast king Joe Rogan last summer. And that is also why he is 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 that Spotify held 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 will never be famous like Obama , or even a little bit famous: Spotify wants them all to send their content to Spotify.
Spotify believes it can make money by distributing these things to hundreds of millions of people through a combination of advertising and subscription money. In theory, part of it can go back to the people who did things in the first place.
After the event, I spoke with Dawn Ostroff, head of content for Spotify, a veteran of the magazine and TV business, about Spotify’s general ambitions and how he is navigating the move from distributor to content owner. And, specifically, how you are responding to the challenges that arise from being Joe Rogan’s employer.
Here is an edited transcript of our conversation:
Peter Kafka
Who is this event for? It seemed reminiscent of all the streaming video launch events that companies like Apple, HBO and Disney did over the past year or so – aimed at investors, but also at consumers.
Dawn Ostroff
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 intend to go to the creators.
When you think about what Daniel [Ek]The company’s mission and vision was at the beginning for Spotify, 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 journey. And also to be able to communicate to the creators the different tools, the different products we have, to help and support them in our journey not only in terms of creation, but also of profitability and, of course, of reach.
Peter Kafka
There has been a long discussion with Spotify and creators / artists, since its early days, where artists complained 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 are you doing for them?
Dawn Ostroff
Well, we have agreements with labels. This has been quite transparent: people know what we pay, with our revenue, to artists and their record labels. But I think that really part of what Spotify is about is democratizing a form of distribution for artists so that they can experiment, create and, hopefully, grow. Because there is a lot of space for artists who are not necessarily the best in the world. And likewise for podcasters, there is a lot of space for people interested in having podcasts, which are not the best podcasters in the world.
And the idea that you are able to globalize the platform in a way that music crosses all borders and borders and, in the same way, we are seeing this with podcasts – is really unifying the world.
You don’t need to look beyond the performance of every major record company. Music catalogs are going for record amounts. There are hundreds of artists who now earn millions of dollars with Spotify alone. And that is part of what we wanted to illustrate today.
Peter Kafka
One thing that has changed since Spotify’s inception is the way consumers, and certainly regulators, view major technology platforms. In general, they had favorable feelings about them and now there are many more suspicions about them. You have your own complaint about Apple – you say it has a lot of power. But it occurs to me that, in audio, Spotify has so much power that there is likely to be even more suspicion about your motives and what happens when you give Spotify your data or your livelihood.
Dawn Ostroff
For starters, 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 must be competition for the tech giants. And that is what we are. We are the competition for them in this area.
Peter Kafka
Since we’re talking about giants: for years, Apple didn’t seem interested in making podcasting a business. It seems to have awakened – 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 starting to compete with you on podcasting?
Dawn Ostroff
I cannot comment on your plans. And honestly, I have no idea what your plans are. But we think that any company that spends money in the audio space is smart. We think the audio industry is still growing – we’ve seen an explosion, but we don’t think we’re close to the plateau yet.
Peter Kafka
You spent almost $ 1 billion on startups and podcast content. When Spotify started buying podcast assets, you said you could spend $ 500 million in the first year. Do you think you will continue to spend on this clip?
Dawn Ostroff
Our goal is to keep growing. I cannot comment on the exact figure. But we are chasing because it is working.
Peter Kafka
When Spotify signed with Joe Rogan, people like me wondered what would happen when Joe Rogan offended someone, and it did. And it turns out that some of the people work on Spotify.
What kind of argument did you have about any kind of negative reaction that Rogan would generate? And did those discussions include what would happen if your own employees were upset?
Dawn Ostroff
In Joe’s terms: he obeys the same policies 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 wide and varied group of people who listen to Spotify. And it turns out that he remains extremely popular.
I can’t comment on our internal discussions, but the debate is also a big part of Spotify’s internal corporate culture. And that doesn’t just happen with something like Joe Rogan, but also with different areas of our business. It is nothing new for us.