Do you know how many European Internet companies have succeeded in the US?
Daniel Ek is sitting in a dark room in Manhattan and asks a rhetorical question that he himself answers.
– The only one is Skype, but they’re still owned by an American company now. So actually zero European companies have succeeded in the US, he says.
Founded 2006 in Stockholm, Spotify today has 1500 employees globally. The head office remains in Stockholm, with 750 employees. They have 26 offices world wide. As a service, Spotify exists in 58 countries and has more than 60 million users. One fourth are paying subscribers.
Despite several conflicts with artists, like Taylor Swift and Björk, they still have one of the biggest catalogues in streaming music, with more than 30 billion songs.
We are in the green room next to the strikingly decorated warehouse in Manhattan’s Hell Kitchen neighborhood, where Daniel Ek has just completed the ambitious launch event for “the new Spotify”. They have done a fine job signaling that Spotify is now an international giant among Internet companies. The event’s guests are selected with surgical precision, by Daniel Ek himself, to convince the attendees that Spotify is now a company that can get anyone to set up a news conference. The two girls from “Broad City,” the funniest comedy show in the US right now, about two weed-smoking young women loitering around Brooklyn, improvise a few jokes on stage, but are mostly there to remind us that Spotify is now a platform where you can also see TV shows. Music producer Tiësto presents a new Spotify initiative for running music, in a collaboration with Nike, where the music changes tempo in real time when you run faster.
Soul star D’Angelo performing at Spotify’s media event in New York. Photo: Linda Forsell.
And then we hear four songs from D’Angelo, the elusive soul star who “never performs on corporate gigs, because he only does things he believes in personally,” according to Daniel Ek.
Formally, the event is about presenting the features of the new Spotify as a broader platform for music and entertainment, in a setting reminiscent of Apple’s lavish presentation ceremonies. But from a larger perspective, the event signals that Daniel Ek and Spotify have already reached the throne of music streaming.
They are now the most successful company for streaming music, not in terms of the number of total users, but when it comes to being the company that instills the greatest confidence and optimism in the wider music industry. When Spotify launched in the US, less than four years ago, their main competition was Pandora, a giant beast to defeat. Now the company is valued at more than twice as much as Pandora. Spotify now accounts for more than half, 54 percent, of all the revenue for streaming in the music industry. It is worth almost as much as the entire American music industry. The company was recently valued at $8.4 billion, while the total US music industry was worth roughly $12 billion last year. When Rolling Stone magazine lists the five most powerful people in the digital music industry, Daniel Ek is in first place. “Any road to winning the streaming wars goes through Ek and Spotify,” they write. In the streaming music wars, Spotify can say: mission accomplished. The answer to Daniel Ek’s initial question is no longer zero, because there is one European Internet company that has done well in the US: Spotify. And that was, of course, his point. So now, Daniel Ek wants to start competing with the biggest tech companies in America. Spotify wants to become one of those three or four magic apps on your smartphone that you don’t put into a small, cube-shaped folder called “music” or “news” or “photo”, but rather one that sits in the glorious VIP Room on your phone’s home screen, next to your Facebook, Instagram and weather apps.
When Martin Lorentzon, the co-founder of Spotify, was recently asked how he viewed Tidal, the rapper Jay-Z’s fledgling competitor in music streaming, he shrugged and paraphrased the artist’s hit song “99 problems”: “I have 99 problems but Jay-Z ain’t one.”
— Josefin Jakobsson (@j_jakobsson) 7 maj 2015
Spotify doesn’t necessarily see Jay-Z as their main competitor, but rather Facebook’s Mark Zuckerberg, Apple’s Tim Cook and Larry Page and Sergey Brin of Google. It’s not about winning the streaming music battle, but about winning the battle for all the time you spend with your phone and your laptop. Spotify is now competing with Netflix, Instagram and Snapchat to catch as much of our digital attention span as possible. On the magazine Vanity Fair’s “The New Establishment” list, which appoints the new power brokers in the US media and technology industries, they placed Daniel Ek in 18th place last year, next to the heads of companies such as Youtube, Twitter, BuzzFeed and Snapchat. So is the extravagant launch event in New York the beginning of a new era of world domination, where Spotify is trying to be as inevitable in the digital ecosystem as Facebook, Google and Instagram? Or is it more likely that we will look back on this day as the peak of the bumpy and quite improbable uphill battle for a small Swedish company, who dreamed of making digital music profitable?
Spotify’s user numbers are increasing rapidly, but so are the company’s losses. Last year, they made a net loss of $197 million. After the launch event, Spotify received lots of criticism for having lost focus. Why would they want to change from being the world’s best music service to becoming a confusing platform for a little bit of everything? America’s most important technology magazine, Wired, writes that “Spotify wants to fill an entertainment gap that isn’t there” and criticizes the company for having succumbed to a general trend in the technology industry right now, where too many companies are trying to make too many features for too many different types of users at the same time:
“The result of trying to do so much inevitably turns apps into a Las Vegas buffet experience: unlimited access to a mediocre version of anything you want!” writes Wired.
Daniel Ek, CEO at Spotify. Photo: Linda Forsell.
Right after the launch event in New York, Dagens Nyheter got the first interview with Daniel Ek. We sat down in a nightclub-like backstage space, next to the large room where the extravagant launch event had just occurred. A few days later, we followed up with a much longer interview over the phone, and Daniel Ek insisted that Spotify should not be mistaken for anything other than a music company. Everything else is “complementary,” he says.
– What we are trying to do now is to build on our position in the music industry and combine it with news and radio to create a soundtrack to all of your life, and be a partner for all aspects of your everyday experience. What we have noticed when talking to people and looking at the most common occasions when you play music, when sitting in a traffic jam, for example, there are many people who have Spotify in their cars but don’t use it. We thought that must be because it wasn’t sufficiently well-integrated into the car or something, but it turned out that quite a few users also want to hear the news, weather, and traffic reports.
How do you respond to the criticism that you’ve started to lose focus as a company?
– It’s certainly a risk in the end. But when we launch something, we have already tested it for six months, so we are already sure of what users want. What is less certain is how the industry will react and how it will affect our brand. It is absolutely a risk when it comes to positioning ourselves. Earlier, we stood for music, now it’s a bit more vague what we stand for. A lifestyle, more than just music. But we believe those lines will continue to become more and more blurry, when you look at the rest of the world. Take a look at the Chinese companies that are entering the world market now, and Amazon basically being in all industries at once. It is a blurrier market, where things flow together.
You didn’t have a lot of competition in music streaming when you started. Now you compete with Google, Facebook and Apple?
– Yes, I think so. The world’s largest music player today is YouTube, and they have always done much more than music, which explains their success. There is probably not a single Internet company today that does not already compete with these Internet companies. But our focus is a bit different. Wse are first and foremost a music company, and secondly, when it comes to the quality of the video, we have consciously chosen not to work with user-generated material, but only high-quality materials.
Rochelle King, Spotify’s VP of design. Photo: Andrew Burton/Getty Images/AFP
Last year, Spotify doubled the total number of users worldwide, and they expect to continue growing at that tremendous rate. But to do that, they have to reach beyond the most dedicated, young music lovers and instead aim for middle-aged people who don’t have time to keep track of new bands all day long. During the launch event, Spotify’s VP of design, Rochelle King, holds a presentation in which she describes the new parts of the personalized Spotify experience. The aim is to use the huge amount of user data they have accumulated over the years to create a more personalized experience for each user so that they will not have to make such an effort to find new music. Rochelle King, who was previously head of design at Netflix, is herself representative of the new customer that Spotify now wants to reach: not the 18-year-old hipster who knows all new bands, but people who have jobs and busy lives and would rather be served prepackaged playlists. She says disarmingly that her taste is “a little more mainstream.”
– We have learned a lot about how our users soundtrack their lives with music throughout the day, but for me, I just don’t have the time or the knowledge to craft those different playlists for each part of my day, says Rochelle King.
Gustav Söderström, chief product officer at Spotify. Photo: Linda Forsell
In addition to Daniel Ek and Rochelle King, the person with the greatest influence on Spotify’s new direction is Gustav Söderström, the chief product officer. Backstage after the launch event, he sounds most enthusiastic when describing the new exercise elements that Spotify offers. Gustav Söderström shows me how to choose between a number of different music categories while jogging and let the music adapt to your running speed. This is done not by manipulating the music, but rather, Spotify commissioned a variety of composers and artists to record songs at different tempos. In addition, it has created lots of playlists that are customized for running.
– I view my team as social scientists who have studied 60 million people. We have had access to, easily, several million running playlists from around the world. It is a major activity in each country. We just assumed everyone named their playlists “workout” or “running”.
They aren’t just settling for creating the soundtrack for specific moments in the user’s life. Rather, they want to get users to play music on Spotify 24 hours a day, literally. One of the playlist categories they are most excited about is “sleep”, background music that people play while sleeping.
– Yes, “sleep” is one of the growing categories of playlists now. We’re seeing a major shift in how we use music after streaming music got popular. People have begun to use music in situations where they could not use it before. For most users, it was not reasonable to soundtrack their sleep before Spotify, for it would have cost too much, says Gustav Söderström.
To optimize playlists for every user, Spotify applies a model they call “algo-torial,” a combination of the words “algorithm” and “editorial”, where data-generated recommendations are combined with the human curation of music experts. This is based on the assumption that the user wants a more passive, “lean-back experience”, as they say on Spotify.
Rasmus Fleischer, author and historian at Stockholm University. Photo: Eva Tedesjö
Rasmus Fleischer is a historian at the Department of Economic History at Stockholm University and author of the book “The post digital Manifesto” and the doctoral thesis “The political economy of music.” He has long studied Spotify and is a bit skeptical about the trend towards telling users what to listen to.
– It’s a big change from the way Spotify worked in the beginning, when it revolved around the search box. Back then, they assumed that the user knew what she wanted. I think the new strategy started with the US launch, which forced them to compete with Pandora and American radio culture, which has more passive listening. Spotify realized that if they want to make it outside of Europe, they must become more like radio.
Fleischer believes this could give the major record companies more power over listeners’ behavior.
– When one music player becomes so central, they have a lot of power to control what people listen to. One can see how the three big record companies are handling this development, and it is by trying to buy influence over the playlists. Record companies have moved on from working primarily with the distribution and pressing of discs, to mainly work with promoting music. When the music is as accessible as it is on Spotify, that requires even more marketing to stand out, says Fleischer.
The reason Spotify keeps losing so much money, despite its incredible user growth, is an aggressive strategy of investing much of the revenue to establish the company in new markets. When I visit Spotify’s New York office, it’s obvious that the company is hardly suffering. They have just hired so many new employees they had to rent an additional floor in their Chelsea office building in the heart of New York’s “Silicon Alley”, next to a range of media and tech companies. Spotify currently has 26 offices worldwide, with 1500 employees.
Jonathan Forster, sales manager in Europe for Spotify. Photo: Jonathan Nackstrand/AFP
– We could’ve settled for just being the largest service for music streaming in Sweden. Then we would have been profitable today. But instead, we are investing almost all revenue to grow globally, and it costs a lot of time and money, said Jonathan Forster, sales manager in Europe for Spotify.
There are plenty of reasons to be optimistic about Spotify’s future. Looking at the number of smart phone users globally and the equally rapid growth of people who stream music, there is obviously enormous potential to acquire new users. We are moving from a world where we own physical products, albeit in digital form, to one where we stream products. Spotify says that “the ownership model” has been replaced by “the access model”.
– We’re experiencing a huge shift in the way users view technology. Just look at Dropbox. Their success is based on the fact that people today prefer to upload data to the cloud rather than keep it on a physical hard drive. That wasn’t the case only five years ago, said Jonathan Forster.
But there are also several dark clouds on the horizon for Spotify. Investors expect the company to grow tenfold – from today’s 60 million users to 600 million users, or better still the 1.5 billion that Daniel Ek hopes for – which is based on the assumption that the current friction between Spotify and the music industry, artists and labels will subside. On the contrary, this friction has accelerated in the past year. Artists such as David Byrne, Thom Yorke and Björk have raised their voices against Spotify’s business model for not bringing enough revenue back to artists and songwriters. This winter, Taylor Swift decided to remove her entire catalog from Spotify because she lost faith in their business model. Björk has claimed, in a recent interview with The New York Times, that the Spotify model “feels completely crazy”, because she’s giving away something she has worked on for years “free”. Lucian Grainge, head of the world’s largest record company, Universal, said earlier this year that the model of ad-supported streaming music “is not very sustainable in the long term.” After the Taylor Swift incident, Daniel Ek wrote a blog post on Spotify’s website to say that they were on track to pay her record label $6 million in revenue. Swift’s record label responded that the figure was inaccurate, and actually closer to $500.000. So who is right? Daniel Ek tries to explain.
The artist Magnus Uggla said I was an asshole and wanted to remove all music from Spotify.
– This is a case of apples and oranges. What I mentioned was the global revenue, while her label quoted the revenue only in the US in less than a year. But beyond that, Spotify grows so incredibly fast that we are already paying twice as much as we paid at that time [November 2014]. So I see this as a transitional phase. The music industry is undergoing a huge transformation, from downloads to streaming music. Artists used to earn all the money in the first four weeks [after a record was released], but now they earn money over a much longer time, although perhaps not as much during the first few weeks. So one must always review the deals artists have with record companies and how long they have to wait for the money, where the money disappears, and so on. No one can deny the fact that we have paid more than $2 billion to the music industry, and it is an essential part of the overall revenue for music each year. We had the same discussion in Sweden a few years ago. The artist Magnus Uggla said I was an asshole and wanted to remove all music from Spotify. The way we solved it in Sweden was by increasing transparency, and today artists can log on to a web site and see how much they have been played in different contexts. It has silenced quite a lot of this debate.
Willard Ahdritz, CEO at Kobalt. Photo: Kobalt
In their campaign for increasing transparancy in the music industry, Spotify has been getting a lot of help from Kobalt, a company which was founded by the Swedish entrepreneur Willard Ahdritz, in 2000. Wired magazine has written that Ahdritz “saved the music industry”. Last year, Google Ventures, an investor in new products and businesses, paid $60 million for a stake in Kobalt. Bill Maris of Google Ventures called Ahdritz and said: “There are 70 people who work for me finding interesting companies. The last two investment I made was Uber and Nest. Kobalt is the most interesting thing I’ve seen in the last five years”.
Kobalt had a strong impact in the music industry. Today, more than half of the performers on the Billboard top 100 chart use Kobalt’s services, Ahdritz claims. He considers the company a natural solution to a music industry that has gone from local markets into a global market, “with billions of transactions for one song”, meaning all the micro revenue a performers should earn each time a song is played on Youtube, or in a bar in Argentina, at a sports arena in Canada, a barber shop in London, or on a mobile phone in Taiwan.
– In order to function in a market with such a high volume, we need full transparency. This Taylor Swift incident with Spotify, that was a case of guns pointing in the wrong direction. There is lots of money being paid out from Spotify, but much of it disappears on the way to the artist, because the record companies lack transparency. We’re calling for more data so we can be transparent and pay our clients. We expect the music industry to have one and a half billion customers globally, so we’re facing a huge explosion of growth. And it’s not because of the record companies, who have only considered their short-term profits, but rather thanks to companies like Spotify. Looking at interest in music worldwide and the sales of smart phones for streaming music, whether it’s through Spotify or YouTube or Snapchat, the goal is to get $30 from every user, annually, in a market of a billion and a half people. It’s quite obvious that this is incredibly exciting, says Willard Ahdritz.
According to Ahdritz, the record companies are standing in the way of growth in the music industry today by starting stupid brawls with companies like Spotify.
I get incredibly annoyed when I go to the gala ceremonies where record companies get awards for being “visionary”.
– When you hear Universal saying that “freemium” will be the death of music, it’s obvious they don’t understand most people’s attitudes and spending habits. On the contrary, all data show that the freemium model saved the music industry. What Spotify has done is to bring a market from 80 percent illegal downloads to a market with 4 percent illegal downloads. That is a heroic effort! So when record companies talk about Spotify and streaming music killing the industry, I don’t know which board members they are trying to fool. For 20 years, the music industry has avoided making structural changes. It’s been unbelievably mismanaged. I get incredibly annoyed when I go to the gala ceremonies where record companies get awards for being “visionary”, after bringing the industry from $40 billion to $15 billion. What is their next vision? Bringing it down to 10 billion?
But some of the reasons that so many artists remain frustrated with Spotify can be blamed on Spotify itself, says Willard Ahdritz. He thinks the company could have done a better job of being proactive with record companies by demanding more transparency in the payment system.
– These technology companies have 500 engineers working to drive user growth, and then have one or two people working with “back office”, doing all the administrative work.
Most worrying for Spotify is perhaps not these sporadic backlashes from artists and record labels, but rather the risk of missing out on an entire new direction of contemporary music culture. With the relaunch in New York in May, Spotify showed that they have understood that young music listeners no longer care about genres. The new Spotify interface is built on the assumption that listeners do not primarily search for “hip hop” or “indie” anymore, but instead they are looking for music to match different moods, or sophisticated recommendations for artists and bands based on other artists they like, no matter what genre it happens to be. But one huge category is consistently ignored on Spotify. All the music they offer has come through the proper legal system of publishers and record companies. This means they can’t provide users with the rapidly growing category of music that doesn’t have a label or a publisher, all those millions of amateur remixes, acoustic cover versions, mixtapes and other semi-legal music that can now be found on platforms like Youtube and SoundCloud. There, users can simply upload their own files, which isn’t possible on Spotify. These platforms can thereby offer a musical experience that feels more like the Internet itself: sprawling, playful, unpredictable, and Do-It-Yourself friendly. Jia Tolentino, a young American writer on popular culture, who makes a regular r&b and dance music mixtape series on Soundcloud, says that she “dislikes almost everything about Spotify”. She prefers the messier, grittier aesthetic of Soundcloud.
– I get a lot of new music through friends, but the only app or service I’ve ever used to find new stuff is Soundcloud, really. It’s the only service whose random user playlists I have ever looked at and been surprised by. I think it’s a network that tends to attract people who are quietly obsessive and nerdily particular, and so sometimes if I am really hungry for something new, I’ll spend an hour jumping off the page of a song with a really specific vibe, running down all the playlists it appears on. Soundcloud is good for one-offs, remixes, brand-new tracks, and artists who don’t have traditional distribution, which encompasses the majority, if not all, of the stuff I tend to seek out. I also like that it is minimalist, bare-bones, and kind of ugly, she says.
So what would you use if Soundcloud didn’t exist?
– I’d go wherever that type of music went. My first guess for the type of stuff I put on mixtapes is that I’d end up ripping a lot from YouTube and make Frankenstein mp3 files on my own.
What about Spotify?
I dislike almost everything about Spotify. It’s cheesy, corporate-feeling, and public.
– I use it when I want to listen to full albums, but I dislike almost everything about it except for the all-important fact of its encyclopedic selection. It’s cheesy, corporate-feeling, and public.
Spotify’s critics often say that the service lacks a sense of community with fellow amateurs and music lovers, something that has always been prevalent in the internet-based music world, according to historian Rasmus Fleischer.
– A few years ago, Spotify talked a lot about becoming a platform that would allow for more communication between artists and the audience, but that hasn’t happened at all. It is rather a kind of one-way communication, where the fan can follow the artist, but can’t do much more. If you look at how Spotify works today, there is a huge difference with older music services, such as Myspace, which was much more social, or the way Bandcamp works today. There is something quite asocial and homogenous about Spotify, he says.
Will Spotify end up as the mainstream choice, while all the cool kids disappear elsewhere?
– That possibility exists. When Spotify focused more on the search box, it was more neutral. Now when the focus shifts to playlists and recommendations, it becomes more obvious that they stand for a certain lifestyle. They recommend playlists for different times of the day and there is a strong ideal of how to live. You get recommendations in the morning for music to get you through the working day, and on Friday evenings there is music for pre-gaming parties.
Gustav Söderström, chief product officer at Spotify. Photo: Michael Loccisano/AFP
Spotify’s chief product officer Gustav Söderström recognizes that this might be a weakness of the company today.
– We are trying to get better when it comes to music expertise. But there are a lot of rights issues, and we have always chosen the fully legal path. It has its advantages, but also disadvantages. It is obviously easier to get all the new music if you don’t care about rights. That’s one of the areas where there is room for improvement. But it is tricky. Many artists want to do things quickly and just throw out the music, but then you end up with all these questions about who gets how much of the revenue if you’re talking about a remix, for example.
This seems to be a growing part of today’s music culture, all these songs without licensing contracts. Are you at risk of missing out on this entire scene?
– I don’t think the music needs to be without licensing contracts. There is absolutely a lot of innovation happening in the creative field, when it becomes easier to make music, and eventually I think we need to find a more frictionless system that speeds up the process without breaking any rules. Our goal is to try and solve this the right way. So far that has worked out quite well, says Gustav Söderström.
According to Daniel Ek, Spotify’s process for acquiring content works fine right now.
– What we’ve noticed is that we end up getting quite a lot of this material, since the really popular stuff tends to get licensing contracts. But we always try to get better at being a platform that offers all the different subgenres. We constantly try to democratize the system and allow the users to choose. The moment we become guided by interests other than the preferences of the users, they will choose to go somewhere else. But we will not become Soundcloud or Youtube. We are focused on becoming the best music player, not the place where you upload your own clips.
It is possible that these problems for Spotify will look small in a few weeks, when Apple and Beats Music are expected to launch a new version of its service for streaming music. Among the countless competitors in music streaming, Apple is one of the few that could pose an existential threat to Spotify. Industry analysts in the US described Spotify’s launch event in May as a deliberate strategic move to minimize the impact of a possible blow when Apple and Beats relaunches its music service. Many analysts believe Apple has been in negotiations with the music industry to drive down prices for streaming music so that they may offer a service that is cheaper than Spotify. Gustav Söderström doesn’t seem too concerned with Apple’s next move.
– I don’t want to sound presumptuous here, but I’m not really worried.
According to Spotify, the fact that Apple is now abandoning the old iTunes model where users could purchase downloads (“the ownership model”) for a model more like Spotify, with streamed music (“the access model”) is a sign that the Swedes have been doing it right all along.
– We have spent a lot of time trying to convince people that the access model is better than the ownership model. That’s been very tough in some markets, parts of the US for example, where people would rather own music than stream it. But now, Apple suddenly says, no, you really ought to stream music instead of owning it. That’s very good for us, because we’ve been saying this all along. Music streaming has gone from being a part of the music industry to being the music industry, says Gustav Söderström.
Meanwhile, the US trade press speculates that Apple might simply attempt to buy Spotify instead of competing with them. With Apple’s $740 billion market cap, they have an incredible amount of power in today’s media industry. If they want to make inroads in the music industry, it can be tough for Spotify to compete with them. Spotify, in turn, sits on assets that would be invaluable for Apple, with its long domination of streaming music, their 60 million users and the huge amounts of data they have acquired from users.
– In the long term, one possibility is that Apple will buy Spotify. Since Daniel Ek no longer has a majority of the shares in the company, he can’t make that decision on his own, while Spotify’s early owners have a lot to gain from such an exit. It seems risky for them to venture into the stock market. So many things could go wrong before an IPO. From the investors’ perspective, a takeover could be more attractive, says Rasmus Fleischer.
Daniel Ek doesn’t deny this, but he also doesn’t show any great enthusiasm for the proposal to sell Spotify to Apple.
– We want to go further with our platform. The only case where we would be interested in selling the company is if someone would offer the possibility of a larger platform.
Couldn’t Apple offer that?
Daniel Ek thinks for a few seconds.
– Maybe. But it is not necessarily certain that they could.
With more outside investors in the company, the pressure to make a hefty profit increases, not to mention Daniel Ek’s own shares.
I really don’t know anymore how many shares I own, but it’s still a lot.
– I really don’t know anymore how many shares I own, but it’s still a lot, so I’m looking at how to further develop the company. It may sound strange, but we did not start Spotify with the hopes of making lots of money. If we did, we would not have gone into the music industry. Everyone told us “don’t go into the music industry, it is completely idiotic!” If we only wanted money, we could’ve sold it years ago and gotten so much money we wouldn’t have to do anything else the rest of our lives. We have received an incredible amount of offers. But we are here to build the company. We have not even reached 10 percent of what we want to do yet.
Jonathan Forster, another veteran of the company, sounds uncertain of what to say when I ask him why they don’t just sell the company to Apple.
I just want to be sure that I am not “former Spotify employee” when this article comes out.
– What did Daniel tell you, when you asked him? I just want to be sure that I am not “former Spotify employee” when this article comes out, he says.
Samsung may of course also be interested in Spotify. The South Korean company has long been competing with Apple, and now they also own a music streaming company, Milk Music. “I wouldn’t be surprised if they’re considering a move on Spotify”, says Andrew Sheehy, an industry analyst, to Wired magazine. Daniel Ek claims that the company’s only long-term goal is to “be a destination where you will be entertained, listen to music and where people from every country in the world can exchange music with each other so that more people can make a living by making music.” When we talk on the phone a few days after the launch event in New York, Daniel Ek is in Los Angeles and has just woken up after a rather late night of partying with friends. He is in California to give a speech at a major technology conference, where high ranking staff from Google, Facebook, Snapchat and other tech companies are also attending. Spotify has several offices on the West Coast, but the largest US office is located in New York, “because Daniel wanted to have employees who are music lovers first, and developers second,” according to Graham James, who is press officer at the New York office. Personally, Daniel Ek has been a member of both the technology industry and the music industry for a long time, not only as Spotify’s founder, but also as a music composer.
Daniel Ek. Photo: Linda Forsell.
Why is it so difficult for non-US companies to succeed in Silicon Valley, and in the US tech industry in general?
– There’s a completely different way of doing business over here. In Europe, we are quite accustomed to delegating deal-making and collaborations to the people who are responsible for those departments, but in the US, there is much more focus on the founder as an individual. Everyone here wants to meet the person who founded the company, no matter what the meeting is about. In Sweden, we are not accustomed to stand out, but here you really have to claim your space. It’s a completely different style of leadership.
You had to build a personal brand here, that becomes synonymous with Spotify?
– Yes, that’s more and more been the case. You have to build a new network, and the only way to do that is to be there in person. So I have to go to all of the meetings, with Coca-Cola in Atlanta, with partners in Chicago or Kansas. I’m not a fan of this spotlight on me as a person. If it was possible, I wouldn’t do any interviews, but instead just work to develop the company. Now, I don’t want to sound like a victim, which of course I’m not. I’ve chosen to do this. Our goal is that people all over the world should listen to streamed music and to get them to discover more music and make the world a better place. So, if a part of that work consists of me doing interviews and being in the spotlight, then I’ll have to do it.
The tech industry here can be brutal, with so many companies competing for the same positions. Who gives you advice on dealing with all this?
– It’s a funny situation, because even our competitors here give me a lot of advice. It’s an open playing field. You want to win, but you want to win by doing good things for consumers, rather than to trick others. So I have been getting a lot of advice from Mark Zuckerberg, who has become a close personal friend. I get advice from many of the venture capitalists we work with. From Reed Hastings of Netflix, from the Google guys about how to grow in different countries. What I like about Silicon Valley is that it’s a culture where you can get in touch with someone and ask for help, and they will help you.
Next week, Daniel Ek will try to take a slice of this Silicon Valley culture to Stockholm, where he and Ash Pournouri, who is the manager for Avicii, organizes the conference Symposium for the first time. The ambition is to create a Swedish equivalent of American festivals like South By Southwest, the fanatically popular gathering of music, media and tech enthusiasts in Austin, Texas.
– Yes, I’m insanely interested in creativity and have long wondered why some people are more creative and productive than others. If there are two areas where many creative people gather, that would be music and technology, so I plan to gather my network and Ash’s network to generate a discussion about what creativity is. If you look at Sweden, and it’s weird that so few people understand it, Sweden has created an incredible amount of large Internet companies. And if you look on the Billboard charts, 25 out of 100 songs are written by Swedes. So how is it that this small, little country up in the north somewhere can produce all this stuff? What are we really up to? I get the feeling that Sweden is already living in the future.