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?

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?

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 policies of running the music vertical for Spotify.

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 policies of running the music vertical for Spotify.

Okay, what involving music does not come under your purview?

Okay, what involving music does not come under your purview?

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.

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.

Okay, who would be overseeing the people who create playlists? Yeah?

Okay, who would be overseeing the people who create playlists? Yeah?

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.

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.

Okay. From thirty thousand feet. Yeah, he deals with licensing with the labels. Yeah, what do you deal with the labels?

Okay. From thirty thousand feet. Yeah, he deals with licensing with the labels. Yeah, what do you deal with the labels?

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.

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.

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.

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.

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 verticals and I try to look after our music proposition end in.

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 verticals and I try to look after our music proposition end in.

Okay, you talk about the labels, How do you deal with independent labels and independent artists?

Okay, you talk about the labels, How do you deal with independent labels and independent artists?

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

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

Okay, let's just stay there. Can you tell us more about the trends of consumption.

Okay, let's just stay there. Can you tell us more about the trends of consumption.

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 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 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.

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 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 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.

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?

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?

What do you mean?

What do you mean?

I would assume if I'm universal, there's a direct pipeline between them and you. They have the largest market share.

I would assume if I'm universal, there's a direct pipeline between them and you. They have the largest market share.

Whatever, I see what you mean.

Whatever, I see what you mean.

Let's say that I'm an independent artist. Is there any way to interact with someone at Spotify?

Let's say that I'm an independent artist. Is there any way to interact with someone at Spotify?

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 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 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 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 label set up the.

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 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 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 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 label set up the.

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.

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.

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 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, 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. 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 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.

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 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, 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. 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 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.

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, but what are the odds that people are gonna actually hear my stuff?

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, but what are the odds that people are gonna actually hear my stuff?

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

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

A little bit more granular. Yeah, how does it actually work? Sure?

A little bit more granular. Yeah, how does it actually work? Sure?

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, 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 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 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?

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, 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 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 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?

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.

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.

Yeah, it's usually a track pool for radio stations, a few hundred tracks. That's about right.

Yeah, it's usually a track pool for radio stations, a few hundred tracks. That's about right.

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 is the rotation established?

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 is the rotation established?

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 that we give the user.

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 that we give the user.

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.

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.

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.

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.

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?

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?

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 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.

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 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.

Okay, is it month by month?

Okay, is it month by month?

It is month by month, Yeah, because that's the royalty reporting cycle, and so it's a good, you know cycle.

It is month by month, Yeah, because that's the royalty reporting cycle, and so it's a good, you know cycle.

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.

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.

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, 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.

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, 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.

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?

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?

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.

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.

And to be clear, this is all algorithmic radio playlist has got nothing to do with curated.

And to be clear, this is all algorithmic radio playlist has got nothing to do with curated.

Playlists, That's right.

Playlists, That's right.

We have.

We have.

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.

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.

Okay, what percentage of Spotify listening is in lean back mode?

Okay, what percentage of Spotify listening is in lean back mode?

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.

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.

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?

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?

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.

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.

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?

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?

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, 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 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.

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, 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 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.

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?

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?

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.

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.

So let's just assume that I'm gaining traction. What is the next level I'm eligible for?

So let's just assume that I'm gaining traction. What is the next level I'm eligible for?

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, 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.

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, 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.

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?

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?

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? 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 us to see what's gonna kind of stick with it and have staying power.

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? 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 us to see what's gonna kind of stick with it and have staying power.

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?

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?

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.

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.

Listen, I don't want to talk to people. I'd rather deal with email, whatever, So continue.

Listen, I don't want to talk to people. I'd rather deal with email, whatever, So continue.

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 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 get a lot done and it doesn't have to be about a human relationship.

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 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 get a lot done and it doesn't have to be about a human relationship.

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.

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.

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 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 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 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.

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 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 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 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.

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.

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.

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.

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.

And where would the user see that?

And where would the user see that?

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 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.

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 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.

Okay. Previous Spotify reports have said the most active listeners pick and choose their music as opposed to listening to playlists. Is that accurate?

Okay. Previous Spotify reports have said the most active listeners pick and choose their music as opposed to listening to playlists. Is that accurate?

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 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 of Spotify you're using, the more you're going to retain, the more you're gonna keep paying for your subscription.

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 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 of Spotify you're using, the more you're going to retain, the more you're gonna keep paying for your subscription.

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.

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.

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, 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.

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, 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.

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.

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.

The average is that the majority of an artist's royalties come from outside their home country.

The average is that the majority of an artist's royalties come from outside their home country.

Okay, I interrupted, you continue, Yeah.

Okay, I interrupted, you continue, Yeah.

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.

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.

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?

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?

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. I certainly think you're going to see that on the global chart.

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. I certainly think you're going to see that on the global chart.

Okay, let's regional. Are we going to see an Americana act in the Spotify Top fifteen?

Okay, let's regional. Are we going to see an Americana act in the Spotify Top fifteen?

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 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.

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 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.

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.

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.

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 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 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 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, 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.

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 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 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 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, 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.

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?

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?

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? 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. 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 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 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. 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.

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? 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. 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 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 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. 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.

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.

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.

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, 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 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.

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, 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 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.

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?

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?

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 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 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 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 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.

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 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 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 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 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.

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 your response.

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 your response.

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 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 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 was no Just.

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 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 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 was no Just.

To be clear, because I think you missbooked, you're about twenty fourteen.

To be clear, because I think you missbooked, you're about twenty fourteen.

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 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 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 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 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.

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 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 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 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 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.

Okay, how about all the people who say my track was streamed a million dollar a million times, but I'm getting buck.

Okay, how about all the people who say my track was streamed a million dollar a million times, but I'm getting buck.

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 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, 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?

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 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, 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?

You know?

You know?

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.

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.

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.

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.

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 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, 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.

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 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, 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.

Okay, today, how many tracts are being uploaded a day or a week or a month.

Okay, today, how many tracts are being uploaded a day or a week or a month.

Yeah, I know it's in the tens of thousands, maybe towards one hundred thousand a day.

Yeah, I know it's in the tens of thousands, maybe towards one hundred thousand a day.

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?

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?

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.

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.

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.

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.

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.