For Spotify, The Future Is Already Here

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About that “JRE thing.”

That’s how Spotify CEO Daniel Eck referred to podcast host, Joe Rogan and his show the Joe Rogan Experience and recent events that forced a new corporate policy on COVID misinformation. On Spotify’s quarterly earnings call, Eck said it was too early to know whether there would be fallout from advertisers and subscribers but he was confident Spotify had taken the right steps.

Without mentioning Neil Young who removed his music in protest over Rogan’s show, Eck came out of the gate enumerating the “first of its kind” measures the company had taken. 

They include content advisories with content from physicians and health experts, as well as push policies for creators on Spotify’s platform. In his words, it was publishing the company’s policies and making them clear to the world.

“We should have done it earlier, and that’s on me,” he admitted without any attribution to Young or any of the artists who followed him.  “But no other audio platform has done this.”.

As Eck outlined, all episodes with COVID-19 will be tagged with a link to accompanied messaging by scientists, physicians and public organizations like the Centers For Disease Control (CDC) and World Health Organization (WHO). He promised it would be very visible at the top of every episode that speaks about COVID-19.

Wall Street earnings calls are usually full of dry corporate speak that scrutinize things like contributions to margin, monthly average users, daily active users and other esoteric financial metrics. But they do offer insights into a CEO’s vision and for Spotify, which once started as an antidote to online piracy, now has over 170 million users. 

As much as Eck wanted to take a short victory lap, offering some self-congratulations while demonstrating a dose of humility, he clearly wanted to move on.   

If you weren’t listening closely, you might not have noticed that he talked about music almost in the past tense.  

“And some may still describe us as the leading music subscription service,” he said. “And while this surely reflects where we’ve been it doesn’t encompass all the progress we’ve been making in audio.”

Eck was referring to the evolution of Spotify into a platform that is prioritizing podcasting, audio books and user generated and paid content beyond its traditional music streaming. By providing tools for users to create their own mediums and ads throughout Spotify, Eck outlined an endless loop of content creation and sellable ad inventory.

By his estimates, there are 11 million creators  today but he envisions there will be 50 million in the future. Eck spoke somewhat abstractly about being the preferred destination for “audio tools” and declared Spotify was ready to provide all the tools to fuel the creator economy. 

Through the Spotify Open Access platform, the company sees itself enabling creators with existing paid content businesses to activate their subscriber base on Spotify. “And this means those creators, whether they’re an independent podcaster, a major news outlet, an audio book publisher or creator platform that can retain full control over their subscription base while leveraging the reach of Spotify to grow their audience.”

Just ten years ago, Eck sat on an industry panel alongside Neil Young and music executive Clive Davis. Eck was just coming into streaming and Young had his own high fidelity PonoPlayer digital music player. (In a strange twist of history, Davis was pulled away to another part of the hotel where his Whitney Houston was fighting for her life and passed away.) The events are recalled In the book The Spotify Play (Diversion Books) by authors Sven Carlsson and Jonas Leijonhufvud. The authors state Eck considered Young a friend while recounting how Young first pulled his music off of Spotify when he was promoting his PonoPlayer.

In the digital era, that might as well have been a lifetime ago. Judging by his comments, Eck seemed less enthused about music but still beamed about exploiting “super fans” of artists. (This is the entrepreneur who once said artists aren’t making enough money because they don’t put out enough music.) But Eck seemed to challenge artists to create more excitement–-the kind that fueled the music business to begin with. His offer hinted at providing more flexibility and more ways to use their assets, videos and engage with people–-and have their content show up in new unexpected ways.  

But having conquered the world in streaming, Eck appeared tired of discussing the  details of negotiating licenses and defending the merits of a pool of streaming revenues that gets increasingly more diluted as it trickles down each time new music is uploaded. He’s clearly moved in his mind to a more expansive world where new means of content creation are exponential.  

Which brings us back to the “JRE Thing.” 

And what a difference a few weeks had made. Since Young’s announcement, Spotify, to its credit, had enacted new policies and taken a first stab at creating standards. They went so far as to remove videos that were deemed racist in the court of public opinion. Eck wrote a note to employees apologizing for Joe Rogan but stopped short of silencing him. 

Therein lies the rub. The more Spotify opens itself up to more “creators,” the less it can feign distance from the content they publish. It’s something Facebook has painfully learned. One analyst talked of the slippery slope Spotify now finds itself in if it censors content.

“We believe we have a critical role to play in supporting creator expression while balancing it with the safety of our user,” Eck said in a measured statement.

With it comes a whole new corporate responsibility to monitor all these content creators. If Neil Young’s protest taught us anything, it’s how important corporate reputation is and the lengths publicly traded companies will go to protect it.

Mark Zuckerberg has declared he will build the metaverse. Daniel Eck seems more interested in the here and now. Someone reminded him on the call that he once proclaimed Spotify could have a billion users. As Eck’s ambitions grow, the cost of corporate responsibility is a new medium. The more Spotify opens up its platform, the higher the risks.

“You’re going to see consumers and creators expand this engagement in totally new ways that we think define what the next generation of audio will look like,” he said, teasing that more will be revealed on an upcoming Investor Day.  

For now, Eck defines paid audio as being primarily in the podcasting and audiobooks business. His excitement comes from enabling all forms of audio. For Eck it’s not just a one size fits all approach.

Reading between the lines, one could say we’ve met the future–and the future is us. Now we go forth and create. The only thing is we don’t know the terms.

If history has taught us anything, it will be on Spotify’s terms.

Find other opinions on Spotify here: Loose Ends: Spotify and Neil Young

and here: Why I Am Not Leaving Spotify

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