Charlie Hellman

Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:08):
Welcome, Welcome, Welcome back to Bob Lofstett's podcast. My guest
today is Charlie Eleman of Spotify. He's the VP Global
Head of Music Product. What is that in English?

Speaker 2 (00:21):
Charlick English? Yeah, nice to be here, Bob. Head of
Music Product means I look after our end to end
music offering, mostly you know, in terms of our services
to labels and publishers, artists and songwriters, So all the
tools that they use to get their music on Spotify,
promote their music, manage their their profiles, and our overall

(00:45):
policies of running the music vertical for Spotify.

Speaker 1 (00:49):
Okay, what involving music does not come under your purview?

Speaker 2 (00:54):
Well, so David Kafer and I run the music vertical together.
He manages things like license and sing and artists relations.
I manage more of the product side, and together we
co lead the music vertical at Spotify.

Speaker 1 (01:08):
Okay, who would be overseeing the people who create playlists? Yeah?

Speaker 2 (01:13):
The editorial team, the human editorial team is also part
of the music vertical. They report in to David Kaefer.
But like I said, the two of us are joined
at the hip and working on all of that together
every day.

Speaker 1 (01:25):
Okay. From thirty thousand feet. Yeah, he deals with licensing
with the labels. Yeah, what do you deal with the labels?

Speaker 2 (01:35):
So, for instance, like our Spotify for Artist product, which
is how the labels see how they're doing, manage their
presence on Spotify, promote their music, et cetera.

Speaker 1 (01:46):
Okay, So in terms of ingesting music, yeah, that is
not your thing. In terms of relationships with music and
promoting the music from labels, that is your thing.

Speaker 2 (01:58):
That's right. Yeah. I've been at Spotify now for fourteen years,
so obviously my role has evolved quite a bit over
the years. But recently my role expanded to being responsible
for the music vertical overall, which just means as we've
gone into podcasts and audiobooks, other leaders look after those

(02:18):
verticals and I try to look after our music proposition
end in.

Speaker 1 (02:23):
Okay, you talk about the labels, How do you deal
with independent labels and independent artists?

Speaker 2 (02:32):
Yeah, great question, and that's been something that's evolved a
ton over the years. As you know. I mean, we
released our Loud and Clear Report today which you might
have seen, and in twenty twenty four, fifty percent of
all of our payouts went to indies, which is just

(02:52):
a huge sea change from where it was, you know,
even a decade ago. And so for indies, that spanned
everything from a do it yourself artist that might be
coming through distro kid or tune core and they use
Spotify for artists and manage their profile, you know, run
their promotions, et cetera, all the way to you know,
a pretty big indie label that might have a direct

(03:14):
custom deal with Spotify and kind of everything in between.
So the range of what is included in indies is
pretty broad.

Speaker 1 (03:23):
Okay, let's just stay there. Can you tell us more
about the trends of consumption.

Speaker 2 (03:30):
Yeah, I mean, I think the biggest one that stands
out to me is that year over year, in addition
to just payouts growing and the overall size of the
pie growing, which is great, it's being cut up in
a lot more ways. They're just a lot more types
of success stories happening now than we're happening five years
or ten years ago. So, you know, I think even

(03:54):
if you go back twenty years, maybe twenty percent of
plays and downloads we're coming from the top forty songs.
That's now down to two percent something like that, And
so things have gotten cut up into a lot smaller
niches in music, so less top heavy and more kind

(04:15):
of middle tier artists having sustainable fan bases but might
not be superstars. I think that's been the biggest shift
in consumption patterns over the last ten years or so.

Speaker 1 (04:27):
Okay, let's just assume I'm somebody through distro kid yeah
or CD baby, one of these independent aggregators. Yeah, can
I touch you?

Speaker 2 (04:40):
What do you mean?

Speaker 1 (04:41):
I would assume if I'm universal, there's a direct pipeline
between them and you. They have the largest market share.

Speaker 2 (04:48):
Whatever, I see what you mean.

Speaker 1 (04:50):
Let's say that I'm an independent artist. Is there any
way to interact with someone at Spotify?

Speaker 2 (04:56):
Yeah, we try to have avenues at all different levels
of scale. So I'll give you an example. Our human
editorial team. If you go back, you know, say, five
eight years, a lot of that was through human interaction.
Like they were getting sent pre release music that was

(05:18):
going to come out, they were listening to stuff that
they were getting sent, and you know, they have limited
hours in the day, right, so they're trying to be
on top of everything, but they're only exposed to so much.
So one of the things that we did was through
Spotify for artists. We launched what we call New Music Submission,
this playlist pitching tool where everyone, even if you're a

(05:40):
do it yourself artist, you upload your music and then
you can tag it with a bunch of stuff, tell
the story, what instruments are used, you know who's in
the band, all this kind of stuff, tag it with genres,
and then that all goes into one workflow for the editors.
So it doesn't matter if you're from Republic or if
you're from District Kid. It all comes into one funnel

(06:03):
and it goes into you know, if you're an indie
rock editor, you get all the stuff tagged for indie rock,
and then you you listen to the pre release music
and try to tag up you know, what's showing promise,
what we're we're gonna believe in, what we're gonna give
some editorial love to. And so through things like that,
we've tried to streamline it. So the levels of access
are pretty uniform, you know, regardless of the kind of

(06:27):
label set up the.

Speaker 1 (06:28):
F Let's say I'm an independent artist, I'm through one
of those aggregators. Yeah, but I have money to spend,
h Can I immediately get access? Say, well, you know,
I want certain stuff that you offer the big labels
because I'm willing to pay for it.

Speaker 2 (06:45):
Yeah, that's another area where we've really streamlined and made
the same tools accessible for everyone. So there's two types
of promotional offerings that we offered a labels big and small.
One is what we call native ads. So these are
things where if you come into Spotify you might see

(07:07):
you know, sponsored recommendation or new release and it's featured
and artists, you know, whether they're on the biggest label
or they're do it yourself. They can come into Spotify
for artists and they can book a campaign. They can
target dormant fans or existing fans or potential listeners, and
they can use a cash budget for that. You know,

(07:27):
works very similarly the way a lot of digital advertising works.
And again because we've launched that in a self serve way,
everybody has equal access to that. The other program that
I would argue is even more accessible is Discovery Mode,
and it's more accessible because it actually requires zero upfront budget.

(07:48):
So with Discovery Mode, you say, here are my promotional priorities,
these are the tracks I'm really trying to work. I
want you to try to find spotify any opportunity for
this to show up in more relevant place. And I
don't put in budget on the front end. I accept
a commission of my royalty rate on the back end
when you pay me next month. And because it doesn't

(08:08):
require upfront budget, it really levels the playing field so
that it doesn't advantage people that have the most you know,
cash on hand for marketing. But just you know, whatever
is the most relevant in the system, which you know,
we're really proud of.

Speaker 1 (08:20):
That, Okay, you know, staying with the independent artists because
there's not a lot of light on this particular sphere. Yeah,
I am an independent artist. Let's go with the latter.
And I say, okay, I am checking in these discovery modes.
If people listen, I will accept a reduce royalty. Yeah,

(08:44):
but what are the odds that people are gonna actually
hear my stuff?

Speaker 2 (08:49):
It performs pretty well. It's it's I think it's been,
you know, certainly our most successful promotional product today. So
I can explain a little bit more and detail how
it works. But generally people say, you know, if you
look at how many streams you got before putting in
discovery mode and streams you got after putting in discovery mode,

(09:10):
typically you're seeing you know, fifty one hundred hundred and
fifty percent higher royalties because of the lift and streams,
you get.

Speaker 1 (09:18):
A little bit more granular. Yeah, how does it actually work? Sure?

Speaker 2 (09:23):
Okay, So discovery mode operates in algorithmic playlists. So these
are things like you know, radio stations or AutoPlay, right,
and when a radio station is formed, there's two steps
to this. So first, you know you're making it a
Dell radio station. There might be three four, five hundred
songs that are relevant for a Dell radio station. You know,

(09:45):
Slean Beyond to Beyonce. You could go a lot of
different ways. So you create a pool of all the
most hyper relevant stuff. But then you got to sequence
that playlist, right, like does this user typically like Selean
theon or do they like Beyonce? What are they famili
you're with? Or what's going to be more of a
new discovery for them? You have to have some variations,
so it's not you know, all Adele in the beginning

(10:06):
and then all the other stuff, right, So a lot
of the goodness comes in the sequencing. So the only
thing that discovery mode does is after the track pool
has already been set up. It only affects the sequencing,
So there's maybe fifty or one hundred things that go
into the sequencing, and discovery mode adds that one more ingredient.
To say, factor in the fact that you know, this

(10:27):
is the promotional priority for this artist, and because of that,
it's going to get sequenced often higher in the list
than it would have if it were not in discovery mode.
Does that make sense?

Speaker 1 (10:39):
Yeah, but let's just go even deeper. User creates a
radio station, Yeah, we'll use your example at Dell. Are
we saying conventionally there's five hundred tracks or is that
a number you just used.

Speaker 2 (10:56):
Yeah, it's usually a track pool for radio stations, a
few hundred tracks. That's about right.

Speaker 1 (11:01):
Okay, there's five hundred tracks. The tracks in that pool
are based on daddy you got from the listener, uh huh.
And the rotation because as you said, you don't want
all adele first in all unknown at the end. How

(11:22):
is the rotation established?

Speaker 2 (11:24):
So the sequencer it has all these different dimensions to it.
But it's like we have to have a good mix
of familiarity and discovery. So some tracks that you're going
to recognize in some that you don't. We want a
good diversity of mix of artists. We want to have,
you know, diversity of old versus new. So a lot
of different factors go into it, and then discovery mode
becomes one of those factors that goes into the ordering

(11:46):
that we give the user.

Speaker 1 (11:47):
Okay, so let's just use your number of five hundred. Yeah,
how do we decide if my discovery mode track goes
with the Dell as a post to Deftones, and what
if everybody wants to be with it? Don't.

Speaker 2 (12:05):
Well, since discovery mode only affects the sequencer, it can
only move within a trackpool it's already in. You cannot
use discovery mode to inject a track into a radio
station that it wouldn't have already been in. The only
thing it influences is the rank within the track pool.

Speaker 1 (12:21):
Okay, once again, very deep. I upload my stuff, I
say I want discovery mode. Yeah, how do I know
what acts and how many acts would I be in
that pool of tracks?

Speaker 2 (12:36):
So we have these pre campaign analytics for you that
show you this is where you're at. These are some
suggestions of what might perform well, and then you can
take those suggestions or ignore those suggestions. You try something,
and then you get a report that's like, this is
the amount of uplift each of these tracks got. These

(12:57):
ones are ROI positive because they're getting more royalties than
they did before. These ones. It's not resonating, like we
tried to give it more spins, but it's not performing
well and so it's staying flat and so you're accepting
a discount, but it's not really worth it for you.
So you get all this reporting and then you make
adjustments for next month about what you want to try.
That's different.

Speaker 1 (13:17):
Okay, is it month by month?

Speaker 2 (13:20):
It is month by month, Yeah, because that's the royalty
reporting cycle, and so it's a good, you know cycle.

Speaker 1 (13:25):
So everybody's on the same month exactly counter month. Okay,
let's say I'm a complete unknown quote Bob Dylan, do
I get discovery options.

Speaker 2 (13:38):
For discovery mode? We need the system needs to know
a bit about you in the algorithm, right, because since
you have to already be in the track pulls to
get you know, moving up and moving down, if the
algorithm has no idea where you're relevant, it can't process
the track for discovery mode. So you have to have
some minimum presence in radio stations or algorithm mixes. All right,

(14:00):
it still means that there's like hundreds of thousands of
uploaders who have access to the tool. But you can't
start from absolute zero.

Speaker 1 (14:08):
Okay, so let's just doue them. I'm starting from nothing. Yeah,
in order to be eligible, is it as simple as
someone's got to listen to my track or people have
to listen to my track a thousand times on Spotify?
How do we create the data that gives us the
ability to go to discovery mode?

Speaker 2 (14:30):
Yeah, you need some thousands of streams and then you'll
see in Spotify for artists when the algorithm on the
radio and mix aside has picked it up enough where
you're now eligible for it.

Speaker 1 (14:41):
And to be clear, this is all algorithmic radio playlist
has got nothing to do with curated.

Speaker 2 (14:48):
Playlists, That's right.

Speaker 1 (14:49):
We have.

Speaker 2 (14:51):
Two separate worlds, the man in the machine and for
editorial playlists like Today's Top Hits, rap CA stuff like that,
discovery mode has no impact on it whatsoever. It's only
for kind of the lean back sessions where people are
open to discovery and like a wide variety of tracks
where the discovery mode promotion system operates.

Speaker 1 (15:20):
Okay, what percentage of Spotify listening is in lean back mode?

Speaker 2 (15:27):
Well, it's increase over the years, is the algorithms have
gotten better and better. I think it's grown from ten
to fifteen towards twenty percent. Is you know, all the
personalized mixes, algorithmic mixes, auto play radio things like that.

Speaker 1 (15:42):
Okay, let's say I create a radio station with Dell.
We understand that, Yeah, but also Spotify serves me a
lot of algorithmic playlist to me. Yeah. If an act
signs up for discovery mode, will it potentially be placed there?

Speaker 2 (16:00):
The types of mixes that it's in are kind of
the lean back mixes. So these could be things like
daily mix We usually make a user five or six
daily mixes that are each of the users what we
call taste clusters or artists mix Like, here's a mix
of you know, adele like music for you, genre mixes,
you know, hip hop for you, those kind of mixes.

Speaker 1 (16:25):
Let's just say I'm using Discovery Mode and I get traction. Yeah,
let's just say, for the sake of discussion, my royalty
pool is increased. What are my options after I get traction?

Speaker 2 (16:41):
Well, I mean usually what we see is obviously artists
are doing a bunch of different things across a bunch
of different platforms at the same time to try to
build buzz. So usually it's combining maybe native ads and
discovery mode on Spotify, but then also you know, organic
interest that they're trying to drum up on social media,

(17:03):
maybe paid advertising on social media as well. It's even
as you get bigger and bigger sponsorship out of home,
et cetera. So it's usually part of a broader picture.
But typically, you know, like what we see is if
you get traction and you see something's really resonating. One
of the things that's really cool about discovery mode is

(17:24):
it's kind of like a heat seeker where it will
route someone to say, oh, if that thing's resonating really well,
I wasn't thinking about that one being the next single
that I'm really promoting. But maybe I'm gonna change the
plan a little bit, put a bit more emphasis on
that because it seems to be having, you know, some
kind of grounds well.

Speaker 1 (17:41):
Wait, wait, a lot of stuff going on there. If
I'm in discovery mode and I have enough traction such
that you're doing it, yeah, do I pick a specific
track or do you take it from a pool of tracks?
How does that work?

Speaker 2 (18:00):
So an artist could come in or their label, you know,
if you're if you're doing it at that scale, and
they could put one track into discovery mode, or they
could put eight tracks. You know, it's up to them
how pointed they want to be with it and tactical
versus more broad and using the tool.

Speaker 1 (18:17):
So let's just assume that I'm gaining traction. What is
the next level I'm eligible for?

Speaker 2 (18:25):
Its Spotify Well, I mean hopefully the way that we
see it working organically is signals kind of pick up
and ladder on each other. So if you're doing well
in radio, then the algorithm's going to notice that and
start putting you more and more in other contexts. On
the editor's dashboards, they're going to see, oh, you know,

(18:47):
the save rate on this thing is super high. Everyone
that listens to it wants to save it, so they're
going to consider it more for things when we're thinking
about artists to partner with, you know, a radar artist
or some of the programs that we do to build
artist brands. It all kind of feeds into the better
a track is performing. All those opportunities start, you know,
opening up for ours.

Speaker 1 (19:09):
Let's be very clear, this is a business of hype
and bullshit. Okay, let's assume I have some traction. They're
gonna be people who try to make contact with you,
who are gonna spin a story. I'm gonna be on television,
I'm selling tickets, et cetera, et cetera. How do you
separate the week from the chat?

Speaker 2 (19:30):
Yeah, I mean we see it a lot. I think
there are things that spike, and then there are things
that have staying power, and I think we've gotten pretty
good at especially when things are in our programming or
editorial programming or algorithmic programming. You kind of see it
in the data, right, Like when someone listens to the song,
how often do they go back to it next week?

(19:51):
How often do they save it and make it one
of the things in their playlist, how often they sharing
it with friends? You can't really fake that stuff in
terms of the response you're getting from real human beings.
And so you might get some noise in the data
from something having like a meme moment on TikTok or
you know, getting featured somewhere, but it's pretty easy for

(20:12):
us to see what's gonna kind of stick with it
and have staying power.

Speaker 1 (20:17):
Okay, I'm clicking boxes for discovery mode. Yeah, let's just
assume I continue to have more and more success. At
what point do I talk to a human being?

Speaker 2 (20:31):
Well, I mean I don't. I don't say this to
say we don't want to talk to artists and levels
we talk to artisans.

Speaker 1 (20:36):
Listen, I don't want to talk to people. I'd rather
deal with email, whatever, So continue.

Speaker 2 (20:42):
You know, It's just the point I'm trying to make is,
you know, the music ecosystem is pretty small, right, like
this industry. It's a small industry and relationships matter. I
don't want to like deny that, but at the same time,
I think it's been good for the industry that more
and more is done on the basis of, you know,
how is something actually performing and how's it resonating with

(21:04):
fans more so than who you know and who you're
connected to. So we try to make it so the
top of the mountain isn't about getting to talk to
someone you know. It shouldn't require you having a friend
in the company, so that's not really all roads don't
lead to And then you have a meeting with Spotify
or hopefully our systems are working so that you can

(21:24):
get a lot done and it doesn't have to be
about a human relationship.

Speaker 1 (21:29):
But after I'm in discovery mode and it's working, I
just have to have faith that editorial and it's going
to work me. You know.

Speaker 2 (21:43):
I think it's about having faith, but it's also about
look For most artists that are really trying to do
this and they're trying to get out on tour and
they're trying to have fans that maybe support them with
merch or become someone that's going to be a genuine supporter.
It's about taking people from being light listeners maybe I
hear you in radio, to being high intent listeners like

(22:06):
I'm searching for you and I'm playing you to a
real follower and supporter where I'm you know, buying things,
and so we try to kind of flow those tools together.
So let's say you have good success on discovery mode,
then you can go in and buy a native ads
campaign that says, I want to target people that have
only ever heard me on programming but have never put

(22:27):
me in their library. Can you put me in front
of them? And then we want to say all right
now you've got some high intent listeners, Let's put your
show and your concert listing in front of them. And
that's kind of the beautiful flow when it works really well,
is going from discovery mode low intent, native ads high intent,
and now you start having your concert listings or your
merch and you start, you know, not only getting very

(22:49):
material royalties, and I'm sure we'll talk about you know,
sizeable royalties that are getting paid out, but also other
revenue streams that you can drive by having those you know,
high intent fans on Spotify.

Speaker 1 (23:00):
Okay, when you talk about AD, you're not talking about
the free tier. You're talking about information that would be
served up to subscribers. You're right, yes, and that information
might be tour dates, might be merch anything else.

Speaker 2 (23:19):
So it could be content like here's a new release
from an artist that you might have heard in a
radio station. It could be like you said, concerts merch.

Speaker 1 (23:28):
And where would the user see that?

Speaker 2 (23:31):
Well, our main products are called Marquee, which is like
when you open the app, if there's a relevant new
release for you, you'll see a big screen when you
open the app announcing the new release, usually on release day,
and then we have a second format called Showcase, which
is essentially a home shelf. You know how we have

(23:51):
the shelves on home with different content recommendations. It's a
sponsored shelf where you can feature not only a new release,
but it could be a catalog, anniversary or kind of
anything that you want to promote.

Speaker 1 (24:01):
Okay. Previous Spotify reports have said the most active listeners
pick and choose their music as opposed to listening to playlists.
Is that accurate?

Speaker 2 (24:15):
Well, I mean, it's certainly true that almost every user
does both. So you know, users that are heavily engaged
often have their own playlists and they're curating stuff for themselves,
your favorite songs that you want to go back to
over and over. But the vast, vast majority of users

(24:36):
also have habits with our programming. Maybe they love hot
country or they love their daily mix too. The healthiest
users on Spotify have the most diverse habits. They listen
to us on their phone and the card, they listen
to programming and you know, the DJ, and they do
a jam with their friends. Like, the more different parts

(24:56):
of Spotify you're using, the more you're going to retain,
the more you're gonna keep paying for your subscription.

Speaker 1 (25:02):
Okay, what is happening musically on Spotify? After all, we
hear all this top line stuff. It's a hip hop world.
Rock is dying.

Speaker 2 (25:11):
What is going on genre wise? You mean yes, well,
you know earlier I said more nichefication. I think that's
definitely true. But I think probably like the biggest trend
that I see is how global. Those trends have been
so regional Mexican music, K pop, afro pop, you know,

(25:35):
music has gotten so global across the world, and now
we're at a place where artists get the majority of
their royalties from outside their home country. A third of
artists get more than.

Speaker 1 (25:49):
Who wha wha, wha wha A little bit slower. Yeah,
all artists around the world, both in small countries and
in large markets US, Germany and UK, get most of
their royalties outside their home country.

Speaker 2 (26:02):
The average is that the majority of an artist's royalties
come from outside their home country.

Speaker 1 (26:10):
Okay, I interrupted, you continue, Yeah.

Speaker 2 (26:12):
So just to say I think that I think we've
gone from a global music market that was a lot
more western centric and it's you know, these kind of
radio stations on Terrestra radio that fit into a certain
format to a lot more niche genres, and a lot
of those genres are driven outside the West, but are
becoming really popular globally.

Speaker 1 (26:35):
Okay, we have the Spotify Top fifty, that's the most
dominant chart in the world. It does not seem to
have niche ification if you look down the road. Are
these other niches going to grow or is that always
going to be separate from the pool at large?

Speaker 2 (26:52):
I think so. I mean, when you look at the
top fifty on Spotify, you gotta remember that's a little
bit of a reflection of where our users are. But
as India has become a bigger and bigger area of
usage for Spotify, you see more and more music from
India charting, and I think we're just going to see
that as we've become more popular in Africa across Asia.

(27:12):
I certainly think you're going to see that on the
global chart.

Speaker 1 (27:16):
Okay, let's regional. Are we going to see an Americana
act in the Spotify Top fifteen?

Speaker 2 (27:25):
I mean, I think that because of the fact that
the way music is breaking is so different now. I mean,
you know, like I said, in the nineties, you kind
of had to fit into a certain set of radio formats.
There are no rules now, Like, you can be whatever
kind of music you want. You don't need to brand
yourself with a specific genre or whatever. And if you

(27:45):
have a fan base that's resonating with what you're doing
because of your personality or the way you relate to
them or whatever, you can grow. And so because of that,
I think it's possible for really any type of music
to break through. Like I yeah, I don't think there
are really any rules boundaries anymore.

Speaker 1 (28:02):
Just going sideways for a second to what did we
to tracks start on social media primarily TikTok and crossover,
or start on Spotify, or start on TikTok and not crossover.

Speaker 2 (28:18):
Yeah, look, I mean we certainly see all of the above.
I think typically, Well, let me divide into two types
of tracks, just to massively oversimplify, there's two types of tracks.
There's tracks that follow like a typical historical pattern, which
is your biggest week is your opening week. You come

(28:41):
out hot out of the gate, all the attention, and
then slowly over time you kind of plateau and fade out.
That's like one path that a track can have. A
second type of path that we see is what I
would think about as a momentum track, it gets released,
it's kind of sitting there and then all of a
sudden it gets picked up by something. It's in a

(29:02):
Netflix show, it's in a TikTok trend whatever, and now
it starts surging out of nowhere and it has this
kind of big hill out of nowhere. So I think
in terms of tracks that really spike on Spotify, it
might be fifty to fifty ish in terms of the
first pattern versus the second pattern. Typically for the first
pattern tracks they really break first on Spotify, you see

(29:24):
them spike out of the gate. They're getting you know,
presence on playlists, and then they start getting picked up
elsewhere in the world. For the second time of track,
usually streaming is a little bit behind, maybe you know,
a couple of days or a week after it's trending
on social it starts, you know, we see the signals
in the search algorithm and stuff, and it starts getting
picked up by Spotify. But to your point about not sticking,

(29:47):
you know, a lot of the stuff that is a
trending sound to the background of a social media video
isn't the stuff that people want to have in their playlist,
and it doesn't actually you know, linger or really catch
on were genuine music streaming. It's just, you know, a
trend in a different sense.

Speaker 1 (30:11):
Okay. As you said, today, Spotify released its annual economics report. Well,
those who haven't read it, can you give us some
highlights for sure?

Speaker 2 (30:22):
I mean, to me, I would boil it down to
two big things. First, the total pie continues to grow
and grow and grow, which is great. I started in
the music industry two thousand and eight to twenty fourteen,
and every year it was how much are we going down?

(30:43):
So I don't take it for granted that every year,
you know, the industry grows. It's fantastic that total payouts
in total revenues to the industry are going up and
up and up every year. It's clear that streaming has
gotten people to pay for music more and more and
more people are coming out to the idea that paying
for music every month is a great service, which is awesome.

(31:04):
So ten billion with a B in total payouts from
Spotify in twenty twenty four ten x growth from where
we were in twenty fourteen. We paid out one billion
in twenty fourteen. Ten billion in twenty twenty four the
most that any retailer has ever paid to the music industry,
So that's awesome. The total pie is growing. Second big

(31:24):
thing that stands out is it's getting divided and shared
in by more and more types of artist success stories.
So the number of artists that are getting ten thousand
dollars in payouts per year, one hundred thousand dollars in
payouts per year, five million dollars in payouts per year,
all those have tripled in the last seven years. So

(31:47):
the number of artists seeing you know, meaningful amounts of
royalty payouts is growing faster than the total pie is growing,
which just means that we're finding more and more ways
to program different types of artists to audiences and that's working.
Fifty percent of payouts going to indies. That was never possible,
you know, in the previous way that the industry works.

(32:08):
So those are the two big things that stand out
to me, total pie growth and then how it's getting
shared by more and more types of artists.

Speaker 1 (32:17):
Can you give us, you know, this may be two minute,
Can you give us a couple of stories of people
were making a lot of money that I mean obviously
Lady Gaga, Brude marsh and making a lot of money,
but something domestic. We're speaking in English where people will
be surprised how much money these people are making.

Speaker 2 (32:38):
Yeah, it's a good question. I don't know, you know,
if I should owe any one artists specific payouts. But
you know, actually I was just talking to there's a
guy on our team who's employed by Spotify, but he
does music with his band still as a side gig,
and so we were looking at his stuff because I'm
allowed to talk about him because he works here. I
don't need to ask his permission. So they're bandy, you know,

(33:03):
they all have jobs, but they put out music on
the side still. They have maybe around one hundred thousand
monthly listeners, a few million streams. They're generating about fifteen
thousand dollars a year in payouts from Spotify, and so
you know that's probably they're yeah, probably some something like

(33:25):
the eighty thousand, you know, highest earning artists, and Spotify
by no means is this like you know, their day job.
But it just like gives you an example of the
types of that type of success story wasn't really even
a thing twenty years ago. So I thought that was cool,
just as an example of what's possible.

Speaker 1 (33:43):
Okay, since your tenure at Spotify, there's been a change
where you have to reach a certain threshold to get
royalties at all. Yeah, what percentage of tracks reach that threshold?

Speaker 2 (33:59):
So ninety nine point five percent of tracks by stream
share monetize. But the reason that we established that threshold is,
you know, if I back up for a second, most
of what we try to do every day grow the
pie because it grows our revenues and it grows payouts

(34:20):
to the industry. Right, very very infrequently, you can find
a way to shift the payout that you're already doing
around to get people paid more. But that's what we
found with this. For tracks that were generating less than
a thousand streams in the last year, on average, they
were generating three cents in payouts. So that means if
you went into your aggregator account and said I want

(34:43):
to withdraw my three cents, you couldn't even do it
because it's below the threshold of the fee to withdraw
your money. Right and so literally, if you add up
all those pennies of millions of uploaders generating a few pennies,
we were allowed fifty one hundred million dollars to sit

(35:03):
just between couch cushions getting wasted, and that seemed like
a real missed opportunity. We had gotten so big that
that amount of waste in the system seemed like a
miss So we established a threshold to say, you know,
until a track has one thousand streams the last twelve months,
it doesn't generate royalties. That allows all the tracks that

(35:24):
are generating royalties to get half a percent more payout,
so it increases all of their payouts. Spotify makes no
additional money by this policy. It just shifts the revenue
to people that can actually withdraw their money. And because
of that, we eliminated waste in the system and we're
able to get everyone who's doing this a little bit
more seriously paid a little bit more money.

Speaker 1 (35:47):
Okay. Spotify is the largest player in streaming market, just
like anybody who's the largest player, there's blowback. In addition,
streaming is a different paradigm than it will in the
pre Internet era. Is this just something that the public
doesn't understand it needs to adjust to or what would

(36:11):
your response.

Speaker 2 (36:11):
Be, Yeah, I mean it depends on the type of
blowback you're talking about. I see it all, but you know,
the one type that I see is it was better
in the good old days. You know, everyone was making
more money in the good old days. And I don't
understand that. I haven't seen any data that at any

(36:34):
point in music history we're artists making more money than
they are now. I was looking at in loud and
clear this year, if you were the one hundred thousandth
most popular artists on Spotify last year, he generated six
thousand dollars from Spotify, And usually, you know, Spotify is

(36:56):
about a quarter of what you make from recorded revenue,
so maybe you're making twenty twenty five thousand in total
if you were one hundred thousandth most popular artists on
Spotify in twenty twenty four. In two thousand and four,
one hundred thousandth most popular artist was making six hundred
dollars from Spotify. So it's ten x and in two
thousand four, if I go back ten years, additionally, there

(37:17):
was no Just.

Speaker 1 (37:18):
To be clear, because I think you missbooked, you're about
twenty fourteen.

Speaker 2 (37:21):
Sorry, Yeah, So twenty twenty four it was generating six
thousand dollars. Twenty fourteen it was generating six hundred dollars.
And if I go back to two thousand and four.
Ten years earlier, there was no such thing as the
one hundred thousandth most popular commercial artists. The record stores
did not have one hundred thousand different artists in it,
so that didn't exist. They cut their demo, they didn't

(37:42):
get signed, no thank you, you're out of the game.
They weren't even allowed to play. So we've gone from
you can't be in the game to you can generate
a couple hundred dollars to you know, twenty twenty five
thousand dollars a year from recorded revenue. Not that it's like, okay,
quit everything, this is your but that's the kind of
progress that makes it hard for me to understand how

(38:03):
you could look at this and say anything other than
the industry is so much healthier now than it's been
at any point in its history. Maybe, you know, if
you're a top ten, top twenty act and less of
the streams, less of the attention goes to you, maybe
it's it's, you know, a weaker phase of music industry

(38:24):
at that tip of the iceberg. But in terms of
the total revenue getting paid to artists, in terms of
the number of artists achieving meaningful amounts of royalties or
meaningful amounts of success. There's just no denying the fact
that there's more you know, success now than there's ever been.
So to me, this is the good old days of

(38:45):
the music industry. And that's probably the criticism that confuses
me the most of you know, streaming doesn't pay and
we are so much better off in the CD era.
I've just never seen a number or a fact to
support that way of looking at it.

Speaker 1 (39:00):
Okay, how about all the people who say my track
was streamed a million dollar a million times, but I'm
getting buck.

Speaker 2 (39:12):
Gis, Yeah, totally, you know. One of the tough things
that's it's hard to wrap your head around this. One
point four million tracks on Spotify have gotten a million
streams for more. It's just there's a lot of streams, right,
So if if your track gets a million streams, it

(39:34):
means you're in the top one point four million tracks
last year. But just a million streams doesn't mean what
it used to in terms of total popularity. So I
think a lot of times when people are frustrated about payouts,

(39:55):
and it's from maybe an artist that you haven't heard
of before, or they haven't kind of built their brand.
A lot of it is just the laws of popularity.
Like you and I could record a song today and
we could put it up on Spotify. There's twelve million
people who have uploaded. Are we gonna have a hit?

Speaker 1 (40:12):
You know?

Speaker 2 (40:12):
It's the odds are stacked against us. So it just
requires that much more popularity to break through today because
there's hundreds of millions of people streaming, and there's trillions
of streams every year, and so what might have seemed
like a big number in a downloads era just really
isn't the same in the streaming era.

Speaker 1 (40:33):
However, there are people, especially in the UK, keep saying, oh,
you're putting out an artist out of business, they can't
make a living.

Speaker 2 (40:43):
I just don't know if it's supported by facts, like
I hear the anecdotes that you're talking about. But every
single piece of data that I see is that there's
more revenue being paid to artists that support more people
being able to afford living through music than there were
ten years ago or twenty years ago. I mean ten

(41:04):
years ago the total industry had gotten to a bottom
of thirteen fourteen billion, and now we're going to be
over in the thirties. In total revenues for recorded music,
So there's no doubt that more is being paid out.
We are one hundred percent transparent with how we pay
out and to who. No one's been more transparent than us,

(41:27):
And so there are occasions I'm sure where money is
getting lost in the pipes or it's not reaching the
right hands. I don't want to diminish any of that,
but overall, I think it to me, there's no denying
the data that the industry is more healthy and more
people are making a living for music than there were
at any previous era.

Speaker 1 (41:48):
Okay, today, how many tracts are being uploaded a day
or a week or a month.

Speaker 2 (41:57):
Yeah, I know it's in the tens of thousands, maybe
towards one hundred thousand a day.

Speaker 1 (42:01):
I think now, Okay, you said something earlier that Spotify
represents twenty five percent, one quarter of overall recorded music revenues.
Where's the other three quarters?

Speaker 2 (42:19):
Well, I think in terms of let's see, I think
in terms of streaming revenue, that's about that's become about
eighty percent of the business now and we're about thirty
five forty percent of that. And then outside of streaming,
you know, you've got vinyl and CD and inside streaming
you have essentially Spotify's competitors.

Speaker 1 (42:43):
Okay, you know the big competitors domestically are Apple and Amazon.
Are we considering streaming people who are listening for free
on YouTube also which pays? But I just want to
know in the overall pie.

Speaker 2 (42:58):
Yeah, when we look at total recorded revenues for the industry,
paid streaming is the biggest driver. Free streaming AD supported
streaming from Spotify and YouTube is the second biggest, and
then you know everything after that is pretty small, digital downloads,
et cetera.

Speaker 1 (43:16):
To what degree do you personally pay or the company
also pay attention to your competitors. Let me start on
a gross level. Yeah, if you ever say, wait a second,
something else has happened in there, we have to follow
that trend.

Speaker 2 (43:29):
I think for the most part, you know, we've been
more of a leader for the fact that this is
really all we focus on, you know, like this is
our whole business. If streaming music doesn't work for us,
we don't work, like we have to make this work.
So we focus a lot on how can we make
the most valuable service that we possibly can so that

(43:50):
more people pay for a music subscription so that we
grow revenues and we grow payouts. We have to be
obsessed with that. We don't have any other We don't
have a cloud business or a you know, of books
business or a hardware business to subsidize this thing. It
has to work on its own. So I think because
of that, we've been really focused. We've invested a ton
in innovation of the product and R and D, you know,

(44:12):
to be in front and have what I'm biased, but
I think clearly the best consumer experience.

Speaker 1 (44:19):
It's a collegial small business. Do the other big companies
have someone like you? Do you know them? To what
degree is their infrastructure akin to yours?

Speaker 2 (44:33):
Yeah, it is a small ecosystem, and I think that,
like you know, as much as we are competitors, I
genuinely mean this. There's what It's somewhere between five hundred
and six hundred million people paying for music music subscription
around the world. Now there's seven eight billion people in

(44:53):
the world. The big picture here is music is part
of every single human being's life. There is still a
ton of growth to get all of the world paying
for streaming music, and so if other companies are finding
ways to do that, I genuinely believe it's a good

(45:15):
thing because that brings them into this market, and I
think Spotify is the best product and so ultimately it's
going to win that market. But that's like the big
picture journey that we're on. I remember when I joined
Spotify in twenty eleven, and you know, there's like industry

(45:35):
analysis reports and they were like, the total addressable market
for a paying music subscription, we think is between three
to five million or you know, and Spotify was at
nine hundred thousand subscribers. The big picture why the pie
is growing, why there's more revenue in the industry, is
we got hundreds of millions of people to pay for music.

(45:56):
So I'm cheerleading everybody that's trying to make that happen.
And because of that, you know, I try to take inspiration.
There's a lot of Spotify alumni who've gone to YouTube,
We've gone to Apple, We've gone to Amazon and built
out similar things there, you know, Amazon Music for artists
or similar tools that what we're doing, and I think
that is a great thing.

Speaker 1 (46:25):
What do you say to people who say Spotify pays
less per stream.

Speaker 2 (46:33):
Well, it's a it's a totally bogus ridiculous concept. There
is no such thing as a There is no such
thing as a per play rate, and this is probably
the most misunderstood concept in the music industry. The thing
that probably bothers me the most is when people in

(46:53):
the music industry who fully know that it's bullshit and
still talk about it as if it's a real thing
because it serves their narraor. But there is no such
thing as a per play rate. The reason that there's
no such thing as a per play rate is because
no consumer pays per play that they do, you know,
they pay per month. So every music subscription pays the

(47:16):
same way. We all charge the same retail price, and
we all take our music revenues and pay two thirds
of it to labels and publishers. Every music streaming service
does that exactly the same way. So then if we're
all paying, if we're all doing the same retail price,
and we're all paying out two thirds of that retail revenue,
why is the revenue per play higher in some streaming

(47:40):
services than others. The reason is that on other streaming services,
people play a lot fewer streams. So if you only
use your service to play one track in a month,
you got a per play rate of ten dollars. Congratulations,
that looks amazing. If you use the service a lot

(48:01):
and you're streaming thousands or tens of thousands of times
a month, the effective quote unquote per play rate goes down.
The only problem is if you look at what is
the biggest predictor of churn of stopping paying for music,
the biggest predictor of churn is low usage of the service.

(48:22):
So if you play five times a month or ten
times a month, it makes your per play rate look amazing,
and then next month you're probably canceling your description because
you get no value from the thing. So all of
the you know, anyone in the industry you're saying, we
got to get the per play rates up. It's it's
literally backwards for what we need to be trying to
do as an industry. We need to be trying to

(48:42):
get people to engage more in their service so that
they're willing to pay more when we raise prices, that
they retain better. And so you know, if a service
has a lot of dormant accounts, you know, you sign
up with your phone carrier, but you never actually use
it, it makes your per play ray look amazing, but it's

(49:02):
it's totally a distraction, and it's opposite from what the
industry needs to be focused on. So it's so frustrating
misunderstood in the industry.

Speaker 1 (49:12):
Okay, what is the demo of subscriber of Spotify compared
to Apple and Amazon.

Speaker 2 (49:20):
It's younger, and it's more global.

Speaker 1 (49:24):
And it is also more active. Correct.

Speaker 2 (49:27):
Yeah, I mean, I don't know if you could call
that a demo, but way more active. I think, on average,
probably about twice as active.

Speaker 1 (49:34):
Okay. I was with a twenty something yesterday actually three
days ago, and she said she subscribed to Apple Music,
which shocked me. Okay, they're out there not getting into
my own personal feelings about this. Let's just assume someone
is listening and they don't have a subscription at all

(49:57):
or there with a rival service, Why should would they
be subscribing to Spotify instead.

Speaker 2 (50:03):
I'm like, in a live pitch them. Yeah, oh this
is exciting. Well, I think you know, typically the things
that we see people calling out is the reason that
they come to Spotify or switch to Spotify is personalization.
You know, all the mixes that we make for you,
the way that the service kind of wraps around your
taste and get to know you. The second is ubiquity,

(50:23):
Like we've put in fifteen years into making sure run
every speaker, every TV, every car, wherever you are you
can get Spotify to work. That's a big part of it.
And then recently, I think a lot of the investments
that we've been making into kind of product innovation, being
able to have a jam with your friends where you
can all cue songs together, the DJ feature where you

(50:47):
have someone giving you context about the music, and you know,
serving recommendations. I think all those things have felt like
you're getting a little bit more value from this service
than maybe other places.

Speaker 1 (51:00):
Okay, there was a recent book that analyze Spotify and
said there were tracks created and that these tracks were
created mostly in lean back music. We're taking away royalties
from the overall pool. Can you tell us about that?

Speaker 2 (51:20):
Not true? Spotify creates zero tracks period. Every track that's
on Spotify comes from a third party, a licenser, which
is a label or a distributor. They distribute us tracks.
We publish and program the tracks, so we do not
make our own music, and we do not like pad
our service with you know, Spotify's own tracks.

Speaker 1 (51:43):
How about different royalty rates for different companies, like a
music factory who's creating work for hire. Some guy comes in,
creates an atmospheric track. They put these into a pile
of let's say twenty five thousand tracks. You say, okay,
we'll program that, but we'll pay you a lesser royalty.

Speaker 2 (52:06):
So we never say we'll program that period. But we've
never said in a deal you give us this and
we'll program it that. That's not a quid pro quo
that we would ever do. If you're asking, would we
pay the same royalty rate for uh SPA background music
as Kendrick Lamar, of course, I think any sane person

(52:29):
would assume we're not paying the same rate for forests,
you know, wind sounds as we are for you know,
the top acts in the world. That's always been the
case in the history of the music industry. You have
your production music in the bargain bin, you've got the
hits that have a higher wholesale rate. There's I don't
think anyone would be surprised by that. But as far

(52:51):
as background music, it's really been an emergent behavior of
the access model. Like what I mean by that is
there weren't a lot of people buying White Noise CDs
in the nineties, Are you really going to you know,
pay eight dollars to have that CD on hand for
when you want to listen to white Noise? Probably not,

(53:13):
but in the access model and streaming where you've already
paid your monthly subscription, but you want to have you know,
your our meditation session, or you want to have the
background noise so you're you know, toddler can take a nap.
It's become you know, it's become an important use case
to some people. It exists as an important playlisting category.
For us, it's been pretty consistent out of around one

(53:34):
to two percent of plays over the last decade. It
probably is about one to two percent of what we
think about day to day. It's Spotify, it's not a
huge part. And so there's no you know, uh, there's
no scheme, there's no I don't really know where the

(53:55):
myths and the controversy come from, but it's sort of
a natural evolution of having access to anything you want
that these kind of use cases become something that people do.

Speaker 1 (54:05):
How do you decide which tracks get a lower royalty rate?

Speaker 2 (54:10):
Well, I mean everything is a negotiation. So if you're
doing a deal with a production music company that specializes
and by the way, some of them are very good
at doing this really well. Like you have to make
the music. I think boring is probably the right word, Like,
don't distract the user when they're trying to meditate with vocals.

(54:32):
It's got to kind of just recede into the background
and be as like unnoticeable as possible. So I don't
want to diminish the skill that it takes to create
a great production library. It's it is certainly valuable. But
if you're negotiating with that type of label, obviously the
mechanics of that are going to be different than if
you're negotiating with someone that drives a lot of their
own demand that you know people are going to search

(54:52):
for that artist. It's not something that you know it's
just going to be a use case kind of music,
but people actually care about that artists and going to
search it out.

Speaker 1 (55:02):
Okay, it's mostly in the jazz soft jazz world. Artist
you're saying, I put in all my effort I create
this and and to save money. Spotify is programming stuff
that's more from one of these music factories instead.

Speaker 2 (55:20):
You know, from what we see. They just don't. They're
just not substitutional. Period. So, like, I'm a jazz fan,
and there are times that I seek out jazz and
I look for John Scholfield or Pamathany or I'm you know,
I'm looking for music because I care that I'm listening
to jazz. And then there's other times where I just
want background music. I don't think that you can get

(55:41):
someone who would be interested in jazz to be like,
don't you want to meditate right now? Or don't you
want to sleep right now? It's up to the user,
you know, what need they have. So it's just not
a viable idea to say, oh, let's take someone that
would be looking for, you know, what's the latest in jazz,
or let me go listen to Pamathany and instead give them,

(56:02):
you know, background production music. It just doesn't work like that.

Speaker 1 (56:06):
Okay, are there any companies that makes soft jazz that
you have an overall deal with that you pay less to?

Speaker 2 (56:15):
I don't know if any of the production music, I
don't know how much it goes into soft jazz or
if it's more the white noise kind of baby sleep
nature sounds side of it. I'm sure there's some blurring
of the edges, but what I can tell you is
that for any of these playlists, like if you look
at our noise meditation or our relaxation playlists or whatever,

(56:41):
the people you know, just so you see what it
looks like on the inside. Within the company, the people
who are responsible for programming that playlist, they are accountable
to that playlist performing the best with consumers. So they
need to go in and say, every time I add
some of the playlist, people skip less and they stream more,

(57:04):
and so they need to put the stuff in it
that is the best. That is their incentive is to
program it with the you know, the content that people
want for that use case or or for that playlist.
They're not asked to, you know, do it from here
or do it from there. They're asked to put the
best stuff in there that's going to perform best for
the user, because that's what gets people to retain in
their subscription and grows our revenue.

Speaker 1 (57:26):
Okay, you're out there, you're somewhere, you're at dinner, you're
at a show, you're at a party, and it comes
out you work at Spotify. How do people react well?

Speaker 2 (57:42):
For the most part, people who are not in the
music industry have lovely things to say about Spotify because
from a consumer standpoint, it's been life changing. You know,
like I feel like I get a amazing surplus of value.
I get to listen to anything in the world. Your

(58:02):
playlists are amazing. When I talk to people who are
in the music industry, they have lots more interesting things
to ask me about, you know, how do I get
on playlists? And how do your royalty rates work? And
all sorts of stuff. But you know, if you're talking
about just day to day interactions, I think people have been,
you know, overjoyed about the way that Spotify plays in

(58:24):
their life, how it's soundtracked different moments of their life,
the role it plays with the time they spend with
their kids. I mean, that's really one of the things
that has kept me at Spotify for now fourteen years,
is like there's just so few products that have one
a real role in people's lives, you know, that is
used by so many different people, but two in kind

(58:46):
of a I would argue, like a purely positive way.
You know, you don't hear parents say I got to
get my kid to spend less time with Spotify. I
think more time that people spend with Spotify, whether it's
you know, podcasts or music, it's you know, it's enriching,
it's making your life. I don't know better in some ways,
you don't feel like, oh that hour that I just

(59:08):
spent has kind of robbed me of something or made
me feel worse or something. So you know, that's usually
what I hear about from most folks.

Speaker 1 (59:17):
Okay, we've covered Indie. Tell me about your relationship with
the three major labels in large independence.

Speaker 2 (59:26):
Well, I think that right now our relationship with the
industry is probably the healthiest it's been. I mean, look,
in an industry like ours, you're always going to have
your debates d jure about what's going on in the
industry and things that you can argue about. But in
a world where our incentives are so aligned, we all

(59:50):
want to get more people in the world to pay
for music. We all want to figure out how to
raise prices in a way that's going to maximize revenue. Together,
we all want to figure out a way to add
more value to the subscription and so that we can
add more tiers or things like that. The conversations that
I feel like we're in day to day, we're more aligned,
you know, we want the same things. Of course, there's

(01:00:11):
always going to be things to figure out, but you know,
if you talk about the state of those relationships, I
think they're you know, they're as good as I've ever
seen them. Being at Spotify for the last fourteen years.

Speaker 1 (01:00:21):
How often do you speak with people from the major labels?

Speaker 2 (01:00:28):
Definitely a few times a month.

Speaker 1 (01:00:31):
Okay, you're saying you could talk to someone from Innerscope
once a month, three times a month.

Speaker 2 (01:00:39):
Well, in my role, I typically am interfacing more with
people who are in the central corporate teams and the
major labels more so than the frontline labels. The frontline
labels have teams they can work with at Spotify on
this is the new release coming from this artist. We
want to give you heads up about it. We want
to get prepared how we're going to partner around it.
That's you know, that's that's less of my day to.

Speaker 1 (01:01:01):
Day just staying on that. Yeah, lessons daity, how does
that actually work?

Speaker 2 (01:01:08):
Well? I mean, as you know, so much of a
new releases promotional cycle now has shifted to the pre
release phase, building hype, teasing it, getting people excited about it.
And one of the ways that Spotify and markets its

(01:01:29):
service is in collaboration with artists. So we try to
do co marketing with artists that not only attract attention
to them, but might be the reason that someone joined
Spotify for the first time. Like if you're sixteen and
you see, oh, here's chaperone advertisement with Spotify, I want

(01:01:51):
to make sure I get that new release on release day,
and that could be the reason that you join Spotify.
So a lot of times you try to coordinate, you know,
sort of co marketing together around a new release.

Speaker 1 (01:02:02):
Well what about people who say that Spotify is run
presently streaming in general's run present like radio, where the
majors have a dominant relationship in market share and mind share.

Speaker 2 (01:02:18):
Every data point says the exact opposite thing. I mean,
if you're if the assertion is that the majors dominate
more than ever before, that's certainly not what we're seeing, right.
We're seeing more share go to indies than ever before.
We're seeing more DIY success than ever before. So I
don't I haven't seen any data to support the idea

(01:02:40):
that the industry is getting more and more dominated by
major labels.

Speaker 1 (01:02:45):
Okay, it is a relationship business. I personally know people
who have relationships with people at Spotify and work them
on records. Yeah, somebody who's in Timbuctoo's got a record
doesn't have that relationship. Relationship must pay dividends.

Speaker 2 (01:03:02):
Well, I think so if we separate two things, we
talk about marketing, we talk about playlisting. Earlier I talked
about our playlist pitching system where we've tried to make
as level of a playing field as possible, and so
it's not about who can get in the building and
play their record on a stereo. It's it all comes
through the same tool. People evaluate it with their headphones on.

(01:03:24):
They decide, you know, our editors decide what they want
to get behind. So that's one piece of it. And
then on the co marketing side, we are our interest
is in partnering with artist brands where they're bringing something
to the table, an audience, an excitement, right, and so
when we see that, it can be from any angle.
It could be an independent artist, it could be an

(01:03:46):
indie major distributor urist, it could be a major as
signed artist. If it's if it's an artist that doing
a marketing tie up can be beneficial to both sides
because it allows us to have an interesting camp pain
and speak to a demo or a fan base that
we'd like to reach. It doesn't really matter. Yeah, the

(01:04:08):
exact kind of deal structure they have with their label.

Speaker 1 (01:04:19):
Okay, I know people who have worked for Spotify no
longer worked there anymore for whatever reason.

Speaker 2 (01:04:26):
Uh huh.

Speaker 1 (01:04:27):
And they said traditionally drop date is Friday. And they said,
with some of these major racks, they can tell by
early afternoon whether the albums is stiff for a success.
Can you speak to that?

Speaker 2 (01:04:42):
I think that. Yeah, So typically stuff is coming out
Thursday night midnight, and yeah, signals tend to emerge pretty
quickly in terms of again, how often are people sharing
the track, saving the track, repeap, playing the track. Those
signals start coming through pretty quick.

Speaker 1 (01:05:00):
What would you tell someone who has, you know, a
household name to a degree everything you say it's an
interest today that the indicators are not good at first,
what would you tell them to try to prop up
the music?

Speaker 2 (01:05:15):
Well, so everything is context dependent. What I mean by
that is, you know, if you take a song and
put it in hot country and it doesn't perform well,
it could be because it's just not a song that's
going to resonate with anyone. But it also could be
that the people who are listening to that playlist, they're
not your people. You got to find some different people.

(01:05:39):
Our system tries to do that automatically. But sometimes it's
also about like, you know, who's this artist partnering with,
where are they talking what? You know, like what culture
are they trying to like appeal to. And sometimes it's
about finding your zone a little bit. And you know,
I think that sometimes it can be a track that
will perform, just needs to be in a different type

(01:06:02):
of context.

Speaker 1 (01:06:03):
Okay, let's just talk to someone who's truly a household names. Yeah,
they dropped their new album, numbers are not good. It
wouldn't be about classifying the niche. What might you tell
them to say, this is a way for you to
make the album sustain.

Speaker 2 (01:06:21):
It's hard to fight gravity. So I don't know that
I have any magic answers to that, but you know,
at the very least, you're always gonna have, like, if
you're talking about an established name, you're probably gonna have
some diehards that are gonna be with you no matter what.
And so some records are gonna be the kind that
are like I was even with you on that album,
even though it didn't kind of cross over to be
a pop hit. You always have that. But I don't

(01:06:44):
know that I have a magic answer outside of that.

Speaker 1 (01:06:46):
Okay, let's assume I'm an act with some fan. Should
I put out a single? Should I put out an EP?
How frequently should I put out my music? Yeah?

Speaker 2 (01:06:57):
I think there can be a lot of for success.
But I do think one of the big challenges with
music is the long periods that can sometimes happen between releases,
where you kind of people start forgetting or fraying a
little bit. So I do think that there's a pretty clear,

(01:07:20):
you know, evidence that if you can keep a heartbeat
of engagement and keep you know, a touch point with
the fans, it's a little bit easier when the next
big project drops to have them ready and warmed up
and waiting. Dripping singles has been a pretty effective strategy
for that. So it tends to work a little better if,

(01:07:41):
you know, if you've got a big release coming in
three months, if you can drip out one to five
singles along the way, every single one of those drops
is an opportunity to drive word of mouth and attention
and algorithmic you know, signal and relevancy. That just increases
the chances that when the full project drops, you know,
gonna do as well as I can possibly do.

Speaker 1 (01:08:03):
And what about the number of tracks on an album.
You know, there's been a trend of acts. I mean,
listening to Morgan Wallen's a perfect example. The last couple
of albums have been double albums. One of the analysisses, well,
they're gonna make more money.

Speaker 2 (01:08:19):
I you know, maybe I'm thinking too artistically puist, but
in my gut it is if you've got eighteen amazing
tracks that you really believe in, put out all eighteen.
If you've got nine and you try to force another nine,
it's not gonna work. I mean, you can make an
eighteen album, but I don't think you can mathematically engineer

(01:08:41):
these things.

Speaker 1 (01:08:42):
Now.

Speaker 2 (01:08:42):
Certainly, if you've got a twenty track album and people
start listening to it from the beginning and they play
through the end, that's gonna generate more royalty bearing streams.
That's just math. But the songs have to be good
enough where they don't skip and they don't tune out,
So at the end of the day, it's really like
what you have that should dictate the release strategy.

Speaker 1 (01:09:03):
If you talk to certainly the acts that are less popular,
they say they have to make an album. That's the
only way they can get press. Otherwise, if they put
out a single, they can't get press and they can
get no action on streaming. What do you say to that.

Speaker 2 (01:09:22):
I just don't think there's one way. I mean the
traditional like I'm going to drop an album, I'm going
to do a press tour around the album. That is
a way you can do it that way. But I
think there's plenty of examples of a single EP or
a single track having its own moment, and that's cool too.

Speaker 1 (01:09:39):
Okay, let's go back to the artist tools for Spotify.
Let's just make it an independent artist because they're more
wet behind the years. I am putting on a track
on Spotify and I want to have a career. This
is not something I did in my basement when I
got home from being a CPA. Yeah, I used a distributor.

(01:10:04):
The track is populated on Spotify. What can I do
in terms of all the tools you were mentioning earlier.

Speaker 2 (01:10:12):
Yeah, So to name a few I think we we
tend to think about this stuff in the release cycle.
So pre release, we have a tool called the countdown page.

Speaker 1 (01:10:25):
UHHOA let's start at the raw level. I am an artist. Yeah,
I have a track that's going to come out on Spotify.
Is there a general dashboard that I sign up for?

Speaker 2 (01:10:39):
Yes, that's the Spotify for Artists tool.

Speaker 1 (01:10:42):
Okay, so I sign up for that. What's my next
step or my next options?

Speaker 2 (01:10:49):
Well, we try to take you through this journey, so
we have recommended steps for you that kind of guide
you through. So if I can just take it in
a timeline countdown page, first step, so you and that
a project is coming and people can see there's like
a placeholder pre save it now, there's going to be
music here soon. That's an opportunity to gain attention. And
in that countdown page you can drip out stuff, so

(01:11:11):
you can do a clip of you in the studio,
you can tease you know, twenty seconds of an upcoming song.
You can tell a story with video tools, so that's
an important part of it. Then there's a bunch of
stuff to do to get ready to have your your
best audience on release day. So typically we see a

(01:11:34):
good pattern of using discovery Mode on catalog leading up
to release day, So warm up your catalog, get people
hearing your catalog more so that there's more people who
have followed you or are fans of you on release
day that it's going to get blasted to. Then on
release day, you know, you drop your album. There are
a couple free to use tools that are pretty important.

(01:11:56):
One is canvas, so having moving visuals with the track
as opposed to just stat at cover art. That's something
you can upload in the tool that increases engagement. That's important,
show your brand, let people see what you're about a
little bit more. And also the playlist pitching tool that
I mentioned before. Those are important things to do for sure.
And then there's a paid tool on release day called Marquee,

(01:12:17):
which is to announce your new release to people who
are listeners or potential listeners. And then after release day
to sustain engagement, like discovery Mode on the actual record
that you put out, can be a good tool. Coming
back and adding maybe more of a deluxe version by
adding clips behind each track, telling a story behind the track,

(01:12:40):
what it means, how it was written, things like that.
Those are things that can maybe take something that's starting
to die off and give it a reason to get
reconsidered again and have a little bit of a second life,
if that makes sense. So we try to guide people
through that whole journey in the Spotify for Artists product, And.

Speaker 1 (01:12:56):
That's all your Internet. It's not talking to anybody, it's
clicking and uploading.

Speaker 2 (01:13:04):
Everything that I just went through is self serve and
accessible to anyone, you know, with there are sometimes minimum
viable audience thresholds you need to have, like I was
mentioning earlier about discovery Mode, but other than that, it's
accessible to anyone in Spotify Artists.

Speaker 1 (01:13:17):
Okay, So staying on that point, if I'm a new artist,
you're not going to be able to push out to
my fans pre release information.

Speaker 2 (01:13:28):
Correct, That's right. So really the best system that we
have for brand new artists, like if you're coming out
from from zero, is our Fresh Fines franchise. So we
have an algorithm that looks at all the listeners that

(01:13:49):
tend to listen to stuff before it really breaks out.
They tend to be like way on the beginning of
the curve, what are they listening to right now? And
then we and then we feature those artists in these
Fresh Finds playlists, and we have them for every genre.
And this is like the create Diggers. Like, if you
want to be a year ahead of who's going to
be the cool new indie artist, that's the place to look,

(01:14:10):
and we try to feature those people in Fresh Finds.
So if you're building a little bulls on social or like,
you know, people are talking about you on the Internet,
and then people start listening to you who are ahead
of the curve, you get featured there and then a
lot of times that builds up enough of a listenership
where some of these other tools are accessible to you.

Speaker 1 (01:14:30):
Okay, I'm a brand new artist, theoretically I might be
able to be on Fresh Finds. This is all without
people involved. You're collecting data from socials. How do you
know that I have some traction outside Spotify?

Speaker 2 (01:14:47):
Well, one of the biggest signals is on Spotify data,
but listeners who are just ahead of the curve, so
we look at what they're listening to. Now, So what
I meant by that was if you're really buzzy on
social media, that might get people who are trendsetter listeners
to listen to you. And that's the biggest contributing factor

(01:15:07):
to whether you get on the Fresh Fines playlist.

Speaker 1 (01:15:11):
Can you give us an example of somebody who started
on Fresh Fines and then kind of blew up?

Speaker 2 (01:15:17):
Oh that's a great question. I feel like almost every
artist that has has broken over the last you know,
ten years, has been that example. So yeah, I mean
I think literally almost every name that you could come
up with.

Speaker 1 (01:15:33):
Okay, well, let me use a specific example. Zach Brian
put out his albums independently, then went to Warner Brothers. Yep,
they get a hold of me, come to the will Turn.
I was there every now that I play stadium, So
this is at the beginning of the blow up. Everybody
there knows every song the album had an X I

(01:15:55):
think fourteen or eighteen tracks. Were you aware of the
act that something was going on there? I don't.

Speaker 2 (01:16:05):
I don't know the Zach Bryan like on platform history
off the top of my head. We tend to be, yeah,
especially our editorial team tends to be very on top
of that type of stuff, So I wouldn't be surprised,
But I'm not sure what that specific example.

Speaker 1 (01:16:18):
Well, you know, Chapel Road had been in the marketplace
for a while suddenly he's doing these live shows where
I'm getting email. Hey, you know, there's a big reaction.
Here's some videos cocomminentally, were you seeing this on Spotify? Yeah?

Speaker 2 (01:16:33):
And Chapel is a great example because I think a
lot of people know her story now because of her
Grammy win. But she had this up and down journey
right where she she put out a couple songs, she
was dropped by the label, she went back home, she
researched even that first leg of the journey where she
put out a couple songs and then was subsequently dropped.

(01:16:53):
She was getting Spotify editorial support even at that phase.
And you know, she's been an editorials playlist on Spotify
I think continuously for the last seven years. So I
think that's actually a great example of we tend to
be yeah, ahead of the curve on those kind of things.

Speaker 1 (01:17:14):
How many people are an editorial.

Speaker 2 (01:17:17):
Globally, I think it's around one hundred and fifty two
hundred something like that.

Speaker 1 (01:17:22):
Let's just talk domestically, it tens.

Speaker 2 (01:17:27):
I don't know the number off my head.

Speaker 1 (01:17:30):
Okay, So I have a new album or I'm a
new artist, I go through the release phase. Now, Spotify
for artists, What else will it give me? First of all,
let's talk very specifically in terms of data. Yeah, what
data will I get?

Speaker 2 (01:17:49):
If anything, we get the feedback that it's too much.
But at a high level, you're looking at audience metrics.
So how many light listeners, heavy listeners, fans do you
have consuming your music?

Speaker 1 (01:18:05):
Well, just stop right there. How do you break those
categories down?

Speaker 2 (01:18:08):
So light listener is like, you know, maybe I listened
to today's top hits, right, and so Chapel Roone is
on that. I'm a listener, but I've never searched for
Chapel Roone. I've never put her in my playlist. So
I would be a light listener, but I would not
be a you know, high intent listener, if that makes sense.

Speaker 1 (01:18:30):
Okay, take me up the next two levels.

Speaker 2 (01:18:32):
So, yeah, we have a couple levels of fandom and intent,
and part of what we try to do is show
you how the different things that you can do can
help to move audiences up. So maybe you want to
target the people that have only heard you on playlists
and have a goal of your campaign to be to
have them, you know, save you and listen to you
in their library instead. So that's like one level of

(01:18:54):
data that we give you in Spotify for artists is
the intent level of the audience, and you can see
both total size of the audience, the intent level, the
geographic breakdown, the demographic breakdown, all that kind of stuff.
Then you also get data on each individual track, So

(01:19:15):
what playlist is it getting added to? You can see
Spotify playlists, you can see user playlists, what kind of
pickup is it getting, what kind of performance is that
track getting, and you can compare that to like, how
is this signal single doing compared to my last one,
to get a sense for how it's coming out of
the gate. Probably the most popular data feature is on

(01:19:37):
release day. We have a live listener account, so you
come in and its release day and you can see
there's like a little heartbeat that's showing, you know, twenty
four nine and sixty four people are listening to this
you know artist right now. And you know, people have
fun on release day having their phone out and just
seeing the number climb and climb and climb, and their

(01:19:58):
baby is born and they get to see the world
kind of listening to it in real time. Yeah, So
those are you know, some of the bigger categories of data.

Speaker 1 (01:20:09):
The heartbeat is how many people have listened in that day,
or how many listen simultaneous.

Speaker 2 (01:20:13):
Second like this right now the audio is coming out
of their speaker. How many people listening right now to
this track?

Speaker 1 (01:20:21):
Okay, if I'm an artist, can I do that any day? No?

Speaker 2 (01:20:26):
I think it was for like computational load or something.
We had to limit it to the first release week.
I think it is, and then you know, so you
get that like concurrent right now metric for anything that's
released in the last seven days, but not every track
in perpetuity.

Speaker 1 (01:20:49):
Okay, so my track has some traction. People have listened
to it on playlists. What can I do as an
artist to get higher consumption?

Speaker 2 (01:21:03):
Well, you know, to drive consumption on Spotify. A lot
of the Spotify for Artist tools are kind of purposely
designed for that. So, whether it's Discovery mode for more
lean back or the native ads for more high intent
driving listening, those are great, you know, places to start.

(01:21:27):
If I think more broadly outside of you know, just
kind of our first party tools, a lot of what
we see people having success with are collaborations, so that
you can kind of share across people's different fan base
and that tends to work really well. We don't have
a tool for that. It's just a lot of times
what people do when they're starting to get momentum is

(01:21:49):
you know, start that chain of collabse to sustain.

Speaker 1 (01:21:53):
We covered it, but just go back. Yeah. Native ads
would be paying to put information in front of the listener,
and it might be tour dates, merch whatever.

Speaker 2 (01:22:07):
It's it's for music primarily, So it's you can open
the app and on the homepage you might see, you know,
new release from this artist that you have some knowledge of,
and that's a placement that they've said, I want to
pay for a certain amount of clicks on that announcement,

(01:22:27):
and then we try to route it to the most
relevant listeners of that you know, who'd be interested in
that promotion.

Speaker 1 (01:22:33):
How much might that cost?

Speaker 2 (01:22:37):
So it's it's a cost per click model. It's similar
to like buying native ads on Facebook or Google. It's
in the same ilk.

Speaker 1 (01:22:44):
As far as putting information tour dates in merch Do
I have to pay for that.

Speaker 2 (01:22:51):
Free to do so? We aggregate as many concert listings
as possible through all of our partnerships. We partner with everybody.
We want every possible toward a listed on Spotify, and
then we partner primarily with Shopify. On the merch side,
the industry has increasingly, you know, gotten onto Shopify as

(01:23:11):
the main place to do listings, and all that stuff
is listed on people's artist page for free. There's no
additional fee for you know, having that on Spotify.

Speaker 1 (01:23:23):
And is Spotify going to take a cut?

Speaker 2 (01:23:26):
We have like a pretty standard on the concert side,
like the affiliate you know percentage if you click through
the link and you and you buy in that session,
we get an affiliate revenue for that. It's not a substantial,
you know, amount of money for for Spotify. We we

(01:23:47):
mostly do it because it's super important to artists, is
their most important revenue stream and something that you know,
fans find really interesting. But yeah, that affiliate model exists
in the background. And what about merch, I don't think
there's any I know, there had been some affiliate conversations
in the past. I don't think there's any cut that
goes back to Spotify and that.

Speaker 1 (01:24:08):
To what degree do these work?

Speaker 2 (01:24:13):
Yeah, I mean concerts has become a huge use case,
so tens of millions of people buying concert tickets through Spotify,
hundreds of millions of dollars in concert sales driven through Spotify.
So yeah, it's become substantial for sure.

Speaker 1 (01:24:31):
Okay, So going back to my dashboard, I can get
simultaneous listeners with the heartbeat yep. I can get to
what degree are people, you know, casual listeners more active listeners.
I can get regional data any other vertical that we
haven't covered.

Speaker 2 (01:24:49):
When you say vertical, what do you mean by that,
any other area of information? Yeah, I think you co
for most of them.

Speaker 1 (01:25:01):
Okay, to what degree is the demographic and regional information
broken down?

Speaker 2 (01:25:11):
Yeah, So I think that it's been helpful because it
gives you things like age and gender, so you can
have an idea of kind of the segments that you're
appealing to. And then from a geo perspective, it's pretty
cool because sometimes things happen, you know, in regions that
people wouldn't expect for reasons they don't even fully understand.

(01:25:32):
But knowing like oh maybe I could do a Latin
American tour, I didn't realize, like, you know, is this
big and that part of the world. So I think
the fact that we have country level, city level listener
data stream data can be directly helpful for routing strategies.

Speaker 1 (01:25:49):
And to what degree is a broken down demographically.

Speaker 2 (01:25:54):
Age and gender is the main way And to.

Speaker 1 (01:25:58):
What degree in your tenure Spotify have you seen domestic
us product spread around the world and what walls do
you hit?

Speaker 2 (01:26:11):
Yeah, I mean export in every direction is increasing. Things
are just getting less confined to their domestic market. I
mean even country that people think of is maybe a
more I don't know, Waldoff Country is bigger in the
UK than it's ever been. But yeah, like I said before,

(01:26:31):
you know, the majority of artists seeing the majority of
their revenues from outside of their home country. And not
only that, but in terms of at an artist level,
artists that are making hundreds of thousands of dollars, so
artists that are generating more than one hundred thousand dollars
in royalties from Spotify. Those artists last year recorded in

(01:26:53):
over fifty languages. So the amount of diversity of artists
recording in all different languages around the world that are
actually having you know, very substantial audiences and payouts on
Spotify is way more diverse than it's ever been. I
think those numbers are up, you know, five ten x
over the last ten years.

Speaker 1 (01:27:12):
So how big is Latin in the US market? Massive?

Speaker 2 (01:27:18):
I don't have a number for you, but it's it's huge.

Speaker 1 (01:27:21):
Well, well, let's talk different genres. Yeah, there's Latin, there's country,
there's jazz and classical, but they've historically been to minimus.
There's rock, there's hip hop. These genres, what have you seen?
What's going up? What's going down?

Speaker 2 (01:27:37):
I think the interesting thing about rock is it's becoming
a lot less monolithic and a lot more cut up.
You know, indie, shoegaze, you know, all these different micro genres.
I think somewhat in the same story with rap drill music,
and I mean maybe this is really a cross genres trend,

(01:27:58):
not so much in country, but just the smaller scenes
that are having their own moments and their own communities
that do things a different way.

Speaker 1 (01:28:07):
So, but can you give us an overall trend. I mean,
it used to be a rock world. Then there was
a hip hop world. You hear people, you know, prior
to this Kendrick Drake thing. You hear people saying, oh,
it's not as innovative. Then you have questlove the Kendrick
Drake saying oh it's the end of hip hop. Are

(01:28:27):
you seeing anything going up and down? I mean, there's
gotta be some movement up and down with all these genres. Yeah.

Speaker 2 (01:28:35):
I think in terms of things that are ascendant, certainly
K pop, Latin, more recently afropop, these things have been
rising a lot, kind of at the expense of everything else.
I don't think there's been one big loser to stand out,
but as those things grow, they kind of eat into

(01:28:57):
the averages of everything else.

Speaker 1 (01:29:00):
And let's use K pop as an example that tends
to have a wall Yeah, people who were really into
it and then people couldn't give a shit. Do you
think that K pop and latin are going to start
permeating people who traditionally would not be fans for this music.

Speaker 2 (01:29:18):
I think so. I mean, you know, I think one
of the things that the editorial team that Spotify is
really proud of, justifiably is they started programming kate pop
when it was really walled off and people didn't know
exactly what to make of it. But I don't think
it is wald off anymore. I think you see stuff
you know, seventeen and bts and that this stuff resonates

(01:29:39):
and can chart and do well in the US, like
other genres can because I think it takes some time
for people to get you know, comfort and familiarity. In
the US, maybe around something, but yeah, I think the
stuff crosses over and I think that you know, that's
that's absolutely true of Latin music. Latin music is massive
in every corner of the of the world for sure.

Speaker 1 (01:30:00):
Going back to the days of MTV, which is not
a perfect analogy, yeah, they would literally have changes. They
would say, oh, we're not going to program any more
hard rock, We're going to program this. Do you guys say, well,
you know, we got to vibe on K pop. Let's
push it out to the listeners more. Yeah.

Speaker 2 (01:30:22):
I think one of the things that the editorial team
tries to focus on, or maybe the things that the
algorithm isn't automatically going to pick up, right, Like, the
algorithm is good at picking up things that are trending
in the numbers, but in terms of things that are
picking up speed in the amount that you know, it

(01:30:44):
has a cultural attention or zeitgeist or how much people care,
what's interesting, what's got people talking. I think the editorial team,
you know, that's where humans shine. The whole system that
we've made is tried to be the best combination of
man and machine, kind of working in harmony. And that's
the piece that I think humans do really well.

Speaker 1 (01:31:05):
Let's go back to the dashboard. Yeah, we have the
act that's brand new. We have the superstar. Let's assume
I'm more of a journey person. I'm putting out my
third or fourth album. Yeah, is it just identical. Well,
we have the pregame, we have this or that, or

(01:31:26):
once I'm in the game, are is there more information?
Are there more tools that you can help me to grow?

Speaker 2 (01:31:33):
Certainly, I think that all the tools I don't know.
I I think that most of the tools that we
have really shine in the in the kind of middle state.
If you're a superstar and you're super saturated, certainly our
tools are valuable, but they're going to provide less lift overall,

(01:31:56):
you know, because you're already out there so many people
know you, maybe people have made up their mind about you.
And if you're brand new and we hardly know about you,
it's hard for the tools to do their job. Where
they really shine is in the middle where you're not
overexposed yet we know a little about where you're resonating
and can maybe try to help help you, you know,
do more. The tools tend to I mean, they're the

(01:32:17):
same if it's your second album or your fourth album.
But what's hopefully changed is you know your audience that
you can tap it. The people who have been there
for you and your first album, your second album or
third album. Now those people are there for you to
target and try to resurrect and be on the next
part of the journey with you.

Speaker 1 (01:32:35):
I know it's not your purview exactly, but the editorial
they're human beings and people would certainly believe someone with
an ongoing relationship with an editorial person is going to
get their music in playlist.

Speaker 2 (01:32:52):
Can you say more and what you mean by that?

Speaker 1 (01:32:55):
Okay, Hey, this is traditional with distribution. I have a
steady stream of product. If you have a steady stream
of product, there's more of a reason to have an
ongoing relationship with someone. I have a steady stream of product,
a certain amount has been successful. I find out who
is the programmer in my genre. Okay, I take him

(01:33:19):
to dinner, I send him some music, I send him
a birthday card, ask him about his wife, and then
I say I have a new release. Wouldn't you know
just on a human level, people would say that person
would tend to play that record or play list that record.

Speaker 2 (01:33:43):
I see what you're getting at. I think, first of all,
I want to be clear, there's a very rigorous code
of conduct. You mentioned a birthday gift. I think at
some point in that sequence gifts favors not allowed fireable
offenses at Spotify. So we take it super seriously. Anything
that edges on you know, bribery, this stuff we take

(01:34:06):
super seriously. But the broader point you're making about like, Okay,
this is an established manager. They've successfully recognized ten acts,
and they say this next one is just like their
first ten, and this next one is going to be
really good. That's a signal for sure. I don't actually
think it even matters whether you get the phone call
from someone, if you just look up online. This is

(01:34:28):
the team they have around them. I think it's good
for the editorial team to notice that and take that
into account. It's like, oh, okay, well that's part of
the full story that I'm seeing around this artist. These
people think they're going to be great, They're going to
have the you know, creative support of those people. I
think that's legitimate as a signal, you know, and you

(01:34:49):
can never take out all bias from a system. I
think we've done a really good job of trying to
mitigate it every possible place we can and have a
level playing field. But I take your point that it's
never a perfectly flat playing field. At the end of
the day, the thing that matters the most is the

(01:35:09):
music comes out. And if you try it in new boots,
which is like the feeder playlist to hot country, and
it's not performing, if it's been there for four days
and it's not performing, all that other stuff that you
took into account, it doesn't really matter anymore. The fans
have decided now, right so you can't keep you know,

(01:35:30):
forcing it. And so I think that's the biggest difference
between the terrestrial radio era and this era that we're
in right now, is the fans give you signal very quickly,
and they walk with their feet and you know, they decide.
So that's the ultimate remover of bias.

Speaker 1 (01:35:50):
Tell me more about the code of ethics.

Speaker 2 (01:35:54):
You know, when you take the job, you agree to
not going to do any of these things, and if
I do them, I know that means I lose my job.

Speaker 1 (01:36:03):
So they're all, oh, yeah, yeah, what are some of
those things? If I take you to dinner, that's not
a code of ethics violation.

Speaker 2 (01:36:11):
I think it is. I'll look up. I mean, I
I think we make sure we were splitting the bill
or we're taking people out.

Speaker 1 (01:36:18):
You know, that's important.

Speaker 2 (01:36:19):
Yeah, we don't want to do that, so.

Speaker 1 (01:36:22):
I give you a ticket to the show. Is that
a code of ethics violation?

Speaker 2 (01:36:27):
Well, now you're gonna quiz me on all the things.
Let me let me you know, like go back.

Speaker 1 (01:36:32):
Hey, if you can't remember, that's okay. But you know,
it's like if you look for work for a major newspaper,
they paid for their tickets. Is it that strict at Spotify?

Speaker 2 (01:36:43):
I know it is very strict. I like, you know,
I don't remember the exact details of this concert ticket
thing or whatever. I mean some of the you know,
we we want our people to go to shows, right,
We want them to see the acts live, to contribute,
but like, yeah, we don't want it to be through
a favor. We want them to go, you know, on
Spotify's dime. These are things that are important, and like

(01:37:04):
I said, i'm the details, I'm I'll look into. But
I know that this has been a big point of
emphasis and something that isn't just theoretical. It's affected, you know, employment,
and we take super seriously.

Speaker 1 (01:37:18):
Okay, a complaint that I get, and you know, you
and me are in the same world. There are people
going to complain. People say, oh, I had my track
on Spotify, I had my alm on Spotify. Yeah, and
they took it down because they thought it was spam.
And I put in this money for this and that
literally got that email yesterday. What would you say to

(01:37:39):
that person.

Speaker 2 (01:37:41):
I feel so bad for artists who are in this situation.
And the reason I feel bad for them is because
if you look at these marketing sites, they are so predatory.
Like these marketing sites, they're like, you know, put in
one hundred dollars and we'll get you ten thousand totally
organic bot free streams, which is obviously total bs. There's

(01:38:06):
no such thing as that. But if you fall for
that scam and you pay one hundred dollars and you
genuinely think, oh, they said it's bop free. I'm doing
this all on the up and up, this is great,
you know. The truth is is that then they're getting
a bunch of bots to stream your song, and we
take that extremely seriously. We catch it very accurately. We

(01:38:26):
immediately remove all royalties paid out so we don't pay
for fraudulent streams. We remove the play counts, we remove
the monthly listener accounts, and we send notifications to the distributor,
so we say, hey, distributor, this thing is getting bodied.
And then if it's getting bodied really bad, we charge
the distributor a fee because we want to incentivize them

(01:38:49):
to say, don't keep letting this person do that. You
need to maybe charge them a fee, Maybe you need
to give them a strike. You need to ultimately, you know,
remove it if they keep doing it over and over again.
So we take it super seriously. We try to make
sure that there are as few as possible, like wrongly accused.

(01:39:12):
No system is perfect. I think our system is very
very good. But this, this whole you know, streaming fraud
thing is a scourge on the industry and something we
try to combat as in every way that we can.

Speaker 1 (01:39:33):
So where are you from?

Speaker 2 (01:39:35):
Like where did I grow up? Yeah, grew up near
new Haven, Connecticut.

Speaker 1 (01:39:41):
Oh wait wait, I'm from Connecticut where.

Speaker 2 (01:39:43):
I grew up in Cheshire and then Madison.

Speaker 1 (01:39:46):
And what did your parents do for a living?

Speaker 2 (01:39:50):
Nothing to do with what I do. They were both
medical doctors, so I ran the other way.

Speaker 1 (01:39:55):
Okay, so there are medical doctors. How many kids in
the family, Me and my older brother? And what your
older brother do?

Speaker 2 (01:40:02):
He's at Google. I've been a Spotify fourteen years. He's
been at Google like seventeen eighteen years. So we're both
crazy lifirst.

Speaker 1 (01:40:10):
Do you have a close relationship.

Speaker 2 (01:40:12):
I do, Yeah, love my brother.

Speaker 1 (01:40:13):
I mean the fact that he's at a tech company,
You're in a music tech company. Is there anything in
the background that would predict that.

Speaker 2 (01:40:21):
I'm not sure. He's more on the sales side. I'm
more on the product side. But you know, my we
came out it totally different ways. I've been obsessed with
music my whole life. I started playing guitar and piano
from a very young age. I had delusions of being
a performer myself, I you know, dismissed those thought. I
wanted to be a producer. Wrote my college thesis on

(01:40:46):
how the music industry should escape from napster. I mean,
I've been kind of like a single track mind about
you know, the music ecosystem and the music business and
how things could work better for artists and fans. My
whole life been obsessed with it. That's my whole journey.
That's what I've been always most interested in, and that's
really the way I came to Spotify, not through tech

(01:41:07):
but more through music.

Speaker 1 (01:41:10):
So how serious a musician were you?

Speaker 2 (01:41:13):
I was like recording my own stuff in high school
and college and doing you know, a couple like small
gigs here and there, but nothing serious. I learned pretty
quickly that I was that was not going to be
my superpower.

Speaker 1 (01:41:26):
How did you learn?

Speaker 2 (01:41:29):
You know, like performing wasn't like fun for me. I
was just worried about it going bad. I wasn't enjoying
going well. And I just I, like, you know, I
wasn't great. I was good. I was just I wasn't great.
I could tell that there were other people that were
going to be offering way more in the world in
terms of recording and performing music than I was going to.

Speaker 1 (01:41:49):
So you were like a solo actor? There were bands?

Speaker 2 (01:41:52):
Yeah, like a couple of people I were, you know,
just duos, trios that we were recording with in high
school and college.

Speaker 1 (01:41:58):
And where'd you go to college?

Speaker 2 (01:42:00):
At Penn in Philly?

Speaker 1 (01:42:02):
Okay, you go to college at the height of the
dapster era.

Speaker 2 (01:42:05):
Yeah, pretty much.

Speaker 1 (01:42:06):
So what was it like being in college during Napster? Yeah?
It was wild.

Speaker 2 (01:42:11):
I mean I remember getting to the dorm and having
one of the ras or you know, the older kids
that tell you what to do, being like, this is
the server you connect to to see everybody else's hard drives,
and this is how we all share our music together.
It was like part of like, you know, a new
student orientation is like this is how the piracy is
going to work. So you just you know, it was
a totally different you know, era and world at that point.

(01:42:35):
And but you know, what I will say is the
social music discovery through that and being at college and
seeing like, you know, you're sitting in high school with
your own playlist and then you get to college and
you see everybody else's place. Oh you're into that and
you're into that. It was one of the most exciting
times for me as a music fan, just to see that,
even though like the business side of it was totally broken.

(01:42:57):
Definitely took some inspiration from that.

Speaker 1 (01:42:59):
So what music were you're listening to? Oh?

Speaker 2 (01:43:02):
Everything? But I grew up being mostly into jazz, into country,
indie rock, classic rock, Yeah, everything.

Speaker 1 (01:43:12):
And you major in what in college.

Speaker 2 (01:43:15):
In Anneburg they call it communication, but it's basically like
media industry stuff and music minor.

Speaker 1 (01:43:23):
Yeah, and what did your thesis say?

Speaker 2 (01:43:27):
It was actually more pessimistic than it turned out to be.
I thought people were gonna need to be like more
altruistic and be gifting artists and more like Patreon kind
of vibes. You know, the fact that products were made
that were actually better than piracy, that got people to
pay because they got something from it, not because of
the purity of their hearts. I think is a much
better evolution and a much bigger business for everyone to

(01:43:49):
be in. But I was, yeah, I was looking at
what are other ways that businesses have monetized freely available
goods like water to bottled water and you know these
kind of things, and how do you how do you
do that?

Speaker 1 (01:44:05):
So why do you think you were wrong?

Speaker 2 (01:44:11):
Well, so what I what I had conviction in was
you need to meet consumers where they are. Every young
person had the assumption music is free. So if you
put a paywall in front of people, you lost them already.
There has to be a free tier to get people

(01:44:31):
to pay. So my first, like real job was at
LimeWire where they were trying to build. My job was
to build a licensed MP three store, and we were
going to try to migrate people from file sharing into
a licensed subscription. And that was one idea of how

(01:44:54):
we could migrate people from like meet them where they are,
meet them with free, get them moved over. If I
did that so exceptionally well, the free to paid funnel
that's been built by getting people to come in and
discover and invest in their library and then get so
invested that they want to remove the ads, and they

(01:45:15):
want to play on demand, and they want to convert
to premium. It just works so incredibly well to take
a population of the world that had no intention of
being a paid music subscriber now to a place where they,
of course I would never cancel that subscription. And it's
all been through crafting a really good, you know, product experience,
I think.

Speaker 1 (01:45:33):
And you know what the churn rate is, Oh, it's
very low.

Speaker 2 (01:45:36):
I mean, especially on premium, you know, low, low single digits.

Speaker 1 (01:45:40):
Okay, you graduate from college, your first job is with LimeWire.

Speaker 2 (01:45:44):
Well, let's see, I was in college, so when I
wanted to be a producer, I first worked at recording
studios and I thought I was going to like, you know,
get a turn on the pro tool set up, and
I was you know, rolling mike cable and taking out trash.
So it was like, Okay, that's not going to be
the route for me. And then the big turning point

(01:46:05):
for me was an internship I had at EMI. So
I got to be the intern for summer for Digital
Biz Dev for EMI when they were a major label,
and I met every single person in two thousand and
seven that wanted to license EMI, Spiral Frog and all
the ideas that people had. You know, Amazon was going

(01:46:27):
DRM free, MP three's, you know, everyone's trying to figure
it out. And one of the companies that I met
with that summer was LimeWire and they were like, we
have one hundred million monthly active users. We're trying to
get them onto a license thing. And I was like this,
this I can believe might work. So I was there
for three three or four years. That's where I learned

(01:46:49):
you know, product and software, and we made a run
at it. We built a product that would have been
competitive Spotify. There were some progressive people in the industry
that like the idea of migrating user from from Limeware
to that, but ultimately, you know, it got shut down
and then Spotify decided it wanted to start a US

(01:47:09):
office and had heard that you know, I and a
couple other folks were you know, trying to make this
thing happen in Limeware and reach out, and that's where
we started talking about starting the US team for Spotify.

Speaker 1 (01:47:21):
They found you. Yeah, okay, so what year do you
start working for Spotify?

Speaker 2 (01:47:27):
February twenty eleven.

Speaker 1 (01:47:30):
Okay, so what was your job then?

Speaker 2 (01:47:35):
In the beginning, it was building out a US product team.
So the whole company was, you know, one hundred and
fifty folks, mostly in Sweden at that time, but we
wanted to have a tech team in the US, and
initially we were building our you know, we decided to
get into recommendation. Spotify had never done recommendation prior to that.

(01:47:57):
We decided to build our own recommendation features up a
team to do that. We were also building the the
ad support of the free tier, how to run ads
and also how to kind of construct the freemium model,
what you get for free, what you need to you know,
get by converting. Those were some of the initial things
that I was accountable for when it was the US team.

Speaker 1 (01:48:19):
And how did you move up the ladder to where
you are now.

Speaker 2 (01:48:24):
Well, probably the biggest change that happened was Daniel. I
think it was probably twenty fifteen or something. Daniel, our CEO, said,
we really need to have a creator team. We really
thought of ourselves as we license music and then we

(01:48:46):
have a consumer product. You know, we didn't have we
didn't have the idea of a of a creator team
back then. But at that time, like if you think
the misconceptions in the industry today are bad, I mean
then it was like no artist knew whether they had
ten streams on Spotify or a million streams, Like it
was a total black box and we really needed to

(01:49:07):
build a bridge. And so he asked me, I had
like a team of I don't know, one hundred and
two hundred folks, and he was like, yeah, I want
you to give all that up and start this new thing.
It'll just be you in the beginning and build up
some you know, figure out what we should do on
the creator side. And that kind of felt daunting or
and exciting at the time, but that was kind of

(01:49:27):
a big turning point. Because everything that I've done since then,
building out Spotify for artists are business on the supply
facing side, and then now you know, leading the music
vertical more broadly is all kind of built on getting
really close to the artist's side, what they need, what
they want more out of Spotify. That's, you know, really
what I've been focused on for the last ten years.

Speaker 1 (01:49:50):
Do you have stock?

Speaker 2 (01:49:53):
You know, like all employees, you get you know, stock
as part of your package.

Speaker 1 (01:49:58):
Well, when public, do you already have an interest? Yeah?

Speaker 2 (01:50:02):
I mean even from the beginning when because I joined
what seven eight years before we went public?

Speaker 1 (01:50:07):
So and have you sold any stock?

Speaker 2 (01:50:11):
I'm not sharing my you know, personal uh, you know,
financial stuff, but I've sold some of hold some Yeah.

Speaker 1 (01:50:19):
Well I mean it launched, yeah, went down ultimately, and
now it's through the roof.

Speaker 2 (01:50:25):
Mm hm.

Speaker 1 (01:50:27):
You know, is this like a traditional startup if you
wanted to quit your job, would you have to continue
to work?

Speaker 2 (01:50:35):
I mean, look, in the grand scheme of things, like
the success I've had is any much greater than anything
I was ever hoping for. Like I'm you know, I
consider myself very lucky in that way. I am obsessed
with what I do. I love what we're doing. I
feel really passionate about what I'm doing. That's the primary,

(01:50:58):
you know, reason that I do what I do for sure.

Speaker 1 (01:51:01):
Yeah, So what are the opportunities left for you in Spotify?

Speaker 2 (01:51:07):
Well, look, I go back to I think there's two
big things in terms of our overall mission to grow.
You know, one of the things I love about this Spotify,
but streaming in general, the incentives are so aligned. We
want to grow a revenue, and every time we grow revenue,
two thirds of that goes to rights holders. So a

(01:51:28):
lot can be made of disputes in the industry, but
by and large, what's good for us is good for
the industry. That is just true. And as we go
about trying to grow the pie together. The two big
things that stand out to me is one what I
said before, we have five hundred six five hundred and
six hundred million people paying for a music subscription around
the world. That's awesome. I don't think anyone thought we'd

(01:51:50):
get there. But there's billions of people in the world,
and we need to figure out how we're going to
adjust the offering and the freemium funnel and the different
skews to get everyone in the world paying for music.
So I think that's a really fun opportunity. And then
the second one is is kind of breaking out of
the one size fits all. I think for the vast,
vast majority of people paying one hundred and twenty dollars

(01:52:12):
a year ish I'm rounding in a music subscription raises
their total amount of spend because they wouldn't have spent
one hundred and twenty dollars, you know, in a previous era.
But for some the biggest super fans, that's under optimizing,
like they would be willing to spend more and they're
more passionate about music, and there's opportunities to make sure
that there's more points along the supply demand curve where

(01:52:36):
people can you know, get a more valuable service and
drive more revenue to the industry in return. So I
think both of those things are huge opportunities.

Speaker 1 (01:52:45):
Okay, just go because it has been such you know,
a talking point. Yeah, other than higher quality music which
Amazon and Apple bake in for the same price, what
am I going to from my additional dollars?

Speaker 2 (01:53:02):
Well, first of all, let's let's talk about high fidelity music.
So if you go back and in the recent history
of the last few years. I don't think there's any

(01:53:22):
evidence that hi fi is something that gets more people
in the boat. If you don't have a music subscription
at all. Is adding high fi going to be the
thing that gets you over the hump to say, oh,
now I want a music subscription. I don't think so.
I haven't seen any evidence of that. So I think
it's a pretty big missed opportunity to just chuck it

(01:53:46):
in premium. I think that it under leverages what it
can do for the industry because really it's the most
leaned in, passionate people who care about that, and I
think you have to charge more. So I don't take
for granted that the status quo as it exists today
will exist or should exist in that way. But then,

(01:54:09):
you know, to answer your question beyond that, I think
that you know, if you think about what Spotify is
today compared to what it was ten years ago, we've
added tons of stuff that probably appeals more to you know,
big fans rather than casual listeners. And we've got a

(01:54:32):
road map of you know, twenty thirty forty things that
are going to be in that category rolling forward. So
I think there's going to be an opportunity to always
have a version that's you know, best in class and
appeals to the most ardent fans, while the vast majority
of people are totally satisfied with you know, the proposition
they get on premium.

Speaker 1 (01:54:53):
What percentage of people would upgrade to this higher level
for you to be satisfied for the company to be honest.

Speaker 2 (01:55:00):
Fine, I don't know. It's all upside, So I don't
think there needs to be a certain number to be satisfied.
It's it's it's pure incremental, both for us and for
everyone in the industry.

Speaker 1 (01:55:11):
Well, I mean, if you want to go deeper, Spotify
stock is going way up. Analysis says, you know, there's
constant innovation. You look at the labels, their stock has
been somewhat morribn because they say, well, you know, there's
no innovation, so they're banking on this additional tier. Lucy

(01:55:32):
Grange is going on and on, We're going to tap
into the super fan. Okay, they're not. I mean, yes,
on Netflix you can pay extra for four K Okay,
but on most of these other streaming services you pay
maybe at you know, compared to music streaming, television is

(01:55:53):
so fuck up and antiquated My point is, I cannot
think of a similar business. We're the main product is
not what you're upgrading. We're of a significant you know. Listen,
I just got to bug up my rear end about
this because they've been saying this to analysts. You know,

(01:56:14):
title never turned into anything. You know, originally it was
a Norwegian company that was something different whatever they were incompetent.
So I subscribe to my music service for the music
unless you're gonna let me meet the act or you
get me better concert tickets. You know, what is it

(01:56:36):
you're gonna give me.

Speaker 2 (01:56:39):
I think you're gonna like it. We'll see you. We'll
talk in a year and we'll see if you like it.
But I think look, in a lot of ways, we've
already started on the journey. Like you know, to your point,
with family plans, you have more parental controls, you have
more accounts. We added audio books as an additional value proposition.

(01:56:59):
It's not like this is a brand new, you know idea.
We have reps under our belt for you know, how
to version the skews. I'm you know, I'm very optimistic
that there'll be opportunity to grow and change.

Speaker 1 (01:57:12):
But let's just say you know, we're all very familiar
with the different things et SAT round audiobooks don't take
from the royalty stream, and then the recent thing of
you know, lowering royalties overall through other things. Let's leave
all that aside. I'm a music fan. You want me
to pay an additional ten dollars other than a higher

(01:57:33):
quality sound blue skyet. I can't think of anything you
can give me the way. I'm going to say to
a significant number of people, that's better because it's about
the music. We've already established that the record companies don't
want exclusives, So yeah, you don't want to get into
a war of you can listen to it before everybody else.

(01:57:55):
That'll be a disaster. As I say, your point of Spotify,
it's total upside. I get it, okay, but the record
industry is banking on this, okay, and so far they've
filled in the blanks not at all. They say, well,
you don't higher quality stream and then nothing, we're gonna

(01:58:18):
pay the superfans. I was that person. You know, I'm
not paying to begin with. About one hundred and twenty
dollars a year is an incredible bargain relative to what
I used to spend on music. But I was buying music.
That was it. In addition, if I was a big
music fan, I knew we could get the cheapest records. Yeah,
I might go for the contract tickets. I don't know

(01:58:40):
where else in the ecosystem there there's a spot for
me to give it. You're gonna give me more services
that doesn't speak to the music. The US, the big
super fan, they know what they want to listen to.
You're gonna give me audio bunk. You can give me
a blowjob whatever. It's got nothing to do with the music.

Speaker 2 (01:59:01):
Well, look like I said, I mean, we're gonna do
it our own way. I'm sure that there's gonna be
twists and turns along the way. And then you'll be
the judge. I'll read your letter and we'll see what
you think.

Speaker 1 (01:59:12):
Okay, before I leave you, Oh, Bob.

Speaker 2 (01:59:14):
Hold on one second. You earlier said something I have
to react to because I'm too easily triggered. You said
audio books recent thing, we lowered the royalty rate. I
just want to be clear. Our payouts have only gone
up every year they've gone up. There has not been
a lowering of our Wait.

Speaker 1 (01:59:32):
Wait, wait, wait wait wait, audio books Spotify said would
not affect music royalties.

Speaker 2 (01:59:41):
Yeah, it's taken out of a different different.

Speaker 1 (01:59:42):
But this is all public information. Spotify is going to
a bundle model such that less of the subscription price
would go to music royalties.

Speaker 2 (01:59:58):
Yeah, so can I expand on that?

Speaker 1 (02:00:02):
You got the platform, go for it?

Speaker 2 (02:00:04):
Okay, so total royalties going up? You're right that with
bundles the royalty rate does go down. Of course it
needs to because you need to accommodate at putting other
things in bundle. But let me explain how we got here. So,
as you well know, statutory rates in the US, these
are heavily negotiated things every four years or so. We

(02:00:28):
had phono records for We settled in twenty twenty two
after a long negotiation about how these new rates, these
new statutory rates in the US should work. And if
you go back to the press release that announced that
deal in twenty twenty two, it talked about two things.

(02:00:49):
Publishers were getting the headline rate increase that they were
looking for, and the streaming services were getting the bundle
accommodations to be able to have lower to rate for
services that were a bundle. The deal was celebrated by
both sides. Bundles are important. The reason bundles are important
is because there's a lot of people like you and

(02:01:12):
me that would gladly pay for a pure play music subscription,
but when we want to get the world to pay
for music, there's a lot of people who need maybe
a couple other things to get interested. The vast majority
of YouTube music subscribers are to YouTube Premium that includes
music and ad for YouTube. The vast, vast majority of
Amazon subscribers are the kind that get music bundled with

(02:01:36):
Prime and all the other stuff that comes with Prime,
not the pure play music subscription. Apple's got the Apple
one thing with music and you know eight other things.
So this is important to grow the pie. Spotify last
year or recently we added audiobooks. That was a big move.
It helped us grow revenue, it helped us convert better,

(02:01:57):
It added more value to the subscription so we could
get more people in the boat and grow the pie.
And because of that, Spotify, just like YouTube with YouTube
Premium and Amazon with Prime, it became a bundle in
the same way, and so we were on the bundle rate,
which is a lower royalty rate for on the publishing side,
than the headline rate that was challenged in court. The

(02:02:23):
judge looked at it, dismissed the lawsuit with prejudice, and said,
Spotify is doing exactly what the deal was as negotiated.
They're paying exactly as you agreed to pay in this deal.
So because of that, the facts are pretty clear about
what happened beginning, middle, and end. That being said, we

(02:02:45):
don't want to be focused on arguing about the past
and a deal we did in twenty twenty two. We
want to figure out how to grow the pie moving forward.
So the deals we did recently with Warner and Universal
on the publishing side out us to say, yeah, let's
have the rates go up on the publishing side, even
four bundles. But in coordination with that, let's have Spotify

(02:03:09):
get rights that it needs to innovate and have new
propositions and things that are going to help us grow
the pie in other ways. And that's been great. So
now we can put this you know, accounting dispute behind
us with Universal and Warner, and now that that template
is there, I'm very optimistic that we can have that
same you know thing roll out across the industry. But

(02:03:29):
I just wanted to be clear that yes, the royalty
rate is lower for the bundle products than it is
for the pure play products, but in terms of total
payouts to publishers, they went up more than ten percent
last year. They didn't go down because of that royalty rate.
Our total payouts to publishers have gone up every year,
and last year was no exception. So I just wanted
to make sure that that wasn't, you know, lost in
the in the soup.

Speaker 1 (02:03:51):
You get the last word, Charlie. I want to thank
you for taking this time with my audience, been very informative.

Speaker 2 (02:03:58):
Thanks so much for having me as a present.

Speaker 1 (02:04:00):
Till next time. This is Bob LOVESI

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