The Illegal Rise of Spotify

Summary

The video script narrates the transformative journey of Spotify from its inception to becoming a dominant force in the music industry. It details the challenges faced by founder Daniel Ek, including record label negotiations and the evolution of Spotify's business model. The script also touches on controversies surrounding artist payments, the impact of streaming on music sales, and Spotify's strategic shift towards podcasts and personalized content, which has significantly altered its influence in the industry.

Takeaways

• 🎵 Spotify is facing a backlash from artists who are removing their music from the platform due to low artist payouts.
• 💰 Spotify's top podcaster, Joe Rogan, and even Prince Harry and Meghan have expressed concerns, adding to the controversy.
• 🚀 The company was founded by Daniel Ek, who started his entrepreneurial journey at a young age and sold his first business at 23, leading to a 'quarter-life crisis'.
• 💡 Ek's vision for Spotify was to create a legal platform for music streaming that would combat piracy and provide revenue for artists through ads.
• 🛠️ Initially, to develop a prototype, the Spotify team downloaded music illegally, highlighting the 'chicken and egg' problem of needing music to build the product but needing the product to negotiate music rights.
• 🤝 Negotiations with record labels were challenging, with the 'Big Three' (Sony, Warner, Universal) initially resistant to the ad-funded model, leading to a compromise involving a paid subscription and revenue sharing.
• 🔄 Spotify has been in a constant battle with the music industry, with threats to pull licenses and demands for changes to the service, impacting its growth and profitability.
• 📈 Despite challenges, Spotify grew quickly, aided by integrations with Facebook and broadband providers, and clever marketing strategies that created hype around new launches.
• 🤖 Spotify has invested heavily in machine learning and personalization, shifting from just finding known music to discovering new tracks, which has given them more control over the music industry.
• 📊 The platform's playlists and recommendations have been criticized for bias towards cheaper licensing or higher revenue share music, impacting artist exposure and revenue.
• 🎙️ Spotify's move into podcasts and acquisitions like Joe Rogan's podcast have generated controversy, with debates over the platform's spending and content moderation policies.

Q & A

What was the initial purpose of Spotify according to its founder, Daniel Ek?

The initial purpose of Spotify, as envisioned by Daniel Ek, was to create a platform where users could access all of the world's music instantly and legally, funded with ads and a percentage of ad revenue would go to the artists, as a solution to the piracy problem and to help the music industry.

How did Daniel Ek's early businesses influence his approach to creating Spotify?

Daniel Ek's early businesses, starting from making websites at the age of 13 and eventually selling his advertising business, Vertigo, made him a millionaire. These experiences taught him the importance of innovation and business acumen, which he applied to Spotify by aiming to revolutionize the music industry and create a service that was better than existing file-sharing platforms like Napster.

What was the 'quarter life crisis' that Daniel Ek experienced?

Daniel Ek's 'quarter life crisis' occurred after selling his business and becoming a millionaire at a young age. Despite the wealth and lifestyle, he felt his life had lost purpose and sought meaning again, which led him to focus on a new idea to revolutionize the music industry.

Why did Spotify initially face resistance from record labels?

Spotify initially faced resistance from record labels because they proposed a business model based on free music funded by ads, which the labels did not find appealing. They preferred a fixed price for every song streamed and were skeptical about the revenue from advertisements.

How did Spotify address the issue of using music without licenses during its early development?

Spotify addressed the issue by creating a paid version of their service and agreeing to give record labels and music publishers about 70% of all revenue generated. They also gave the record labels a significant chunk of Spotify stock. This allowed them to obtain the rights to use music legally across most of Europe.

What is the 'big clean' that Spotify underwent?

The 'big clean' refers to the process Spotify went through after officially launching, where they removed all the illegally pirated songs from their service, ensuring that the platform was fully compliant with music licenses and copyrights.

Why did artists like Taylor Swift and Metallica pull their music from Spotify?

Artists like Taylor Swift and Metallica pulled their music from Spotify due to concerns over the low payments artists receive per stream and the perceived devaluation of music by the streaming model. Taylor Swift, for instance, publicly criticized Spotify in 2014 and withdrew her songs from the platform.

What is the controversy surrounding fake streams on Spotify?

The controversy surrounding fake streams on Spotify involves the use of streaming farms to replay certain songs on repeat to increase their share of Spotify's revenue. This practice takes money away from genuine artists and is estimated to cost them around 300 million dollars a year.

How did Spotify differentiate itself from competitors and gain leverage over record labels?

Spotify differentiated itself by investing heavily in podcasts and focusing on offering a personalized music experience. They acquired content and platforms, and used machine learning to create personalized playlists, which not only attracted users but also allowed them to control the playlists and subtly move listeners towards less expensive music to license.

What is the significance of Spotify's role in the music industry today?

Spotify's role in the music industry today is significant as it has become a central online hub for music streaming, with over a third of the music listened to on Spotify coming from its own recommendations and playlists. This gives Spotify considerable influence over which artists succeed and who doesn't, as well as the power to shape the music industry's direction.

What was the controversy surrounding Spotify's acquisition of Joe Rogan's podcast?

The controversy surrounding Spotify's acquisition of Joe Rogan's podcast included backlash from artists who were upset that Spotify paid a hundred million dollars for a podcast while they received only fractions of a cent per stream of their music. Additionally, there was public outrage over certain episodes from Joe's back catalogue that were taken down, as well as episodes that were not taken down, which some considered to be spreading misinformation.

Outlines

00:00

🎵 Spotify's Early Struggles and Daniel Ek's Vision

The first paragraph introduces the challenges Spotify faced as it navigated the music industry, with artists removing their music from the platform due to low pay. It delves into the backstory of Spotify's founder, Daniel Ek, detailing his early entrepreneurial ventures and his realization of the need for a legal platform to combat music piracy. Ek's initial idea for Spotify was to create a platform accessible to all music worldwide, funded by ads, with revenue sharing with artists and labels. However, record labels were initially resistant to this idea, leading to a complex negotiation process that shaped the company's business model.

05:01

🛠 Building Spotify and Negotiating with Record Labels

This paragraph describes the creation of Spotify's first version, which was well-received for its sleek design and instant music playback. It highlights the difficulties Daniel Ek faced in negotiations with the 'Big Three' record labels—Sony, Warner, and Universal—to secure music licensing deals. The record labels were initially against the ad-funded model and demanded fixed payments per stream. Eventually, a compromise was reached, introducing a paid subscription model and agreeing to give record labels and publishers approximately 70% of revenue. Despite these agreements, Spotify's relationship with the music industry remained contentious, with ongoing battles over features and revenue shares.

10:02

📈 Spotify's Growth and the Streaming Revolution

The third paragraph discusses Spotify's rapid growth and the challenges it faced as a business, including profitability concerns and the rise of similar streaming services. It mentions Spotify's strategic partnerships, such as with Facebook and broadband providers, which boosted its user base. The paragraph also touches on the controversy surrounding artists' earnings on the platform, with high-profile musicians like Taylor Swift criticizing Spotify and temporarily withdrawing their music. Additionally, it covers the issue of fake streams and their financial impact on artists, as well as Spotify's efforts to address these challenges.

15:07

🎙️ Spotify's Expansion into Podcasts and Personalization

This paragraph explores Spotify's strategic shift towards podcasts and personalized music experiences. It explains how Spotify invested heavily in podcast content, including exclusive deals and the acquisition of the podcasting platform Anchor. The move aimed to own content and reduce revenue shares with record companies. Additionally, the paragraph discusses Spotify's focus on personalization through machine learning, which allowed it to recommend new music and control playlists. This shift in strategy, however, led to controversies, such as the use of fake artists and the potential for AI-generated music to further consolidate Spotify's control over the industry.

20:10

🔧 Spotify's Transformation and Industry Influence

The final paragraph reflects on how Spotify has evolved from a music distributor to a platform with significant control over the music industry. It discusses the company's role as a marketplace connecting fans and artists, with artists now paying for playlist inclusion and higher rankings. The paragraph also touches on the controversies surrounding Spotify's acquisition of Joe Rogan's podcast, the platform's handling of content, and the broader implications of its growing influence on artist success. It concludes by considering Spotify's impact on the music industry's transition to streaming and its future goals.

Keywords

💡Spotify

Spotify is a music streaming service that allows users to listen to a vast library of songs on demand. It is central to the video's narrative as it discusses the company's history, its impact on the music industry, and the controversies it has faced. For instance, the video mentions Spotify's early challenges with record labels and its pivot to podcasts to diversify its content offering.

💡Music Industry

The music industry encompasses the businesses involved in the production, distribution, and sale of recorded music. The video discusses how Spotify aimed to revolutionize the music industry by offering a legal alternative to file-sharing services like Napster, which were harming traditional music sales. It also touches on the ongoing tension between Spotify and artists over revenue sharing.

💡Daniel Ek

Daniel Ek is the co-founder of Spotify and is portrayed as a key figure in the company's development and vision. The script describes his early entrepreneurial ventures and his motivation to create Spotify as a solution to music piracy. Ek's transition from a workaholic to a millionaire seeking purpose is a central theme in the video.

💡Piracy

Piracy, in the context of the video, refers to the unauthorized sharing and downloading of music, which was rampant with services like Napster. The script explains how this practice negatively impacted the music industry and was a catalyst for Daniel Ek's idea to create a legal platform that compensated artists and labels.

💡Record Labels

Record labels are companies that manage the production, distribution, marketing, and promotion of music. The video highlights the initial resistance from major record labels like Sony, Warner, and Universal to Spotify's business model. It also discusses the ongoing negotiations and conflicts over licensing and revenue sharing.

💡Streaming

Streaming, as discussed in the video, is the act of playing media in a continuous flow rather than downloading it. The script outlines how streaming has become the dominant method of music consumption, with Spotify at the forefront, and the challenges it presents to traditional music sales and artist compensation.

💡Podcast

A podcast is a digital audio program that a user can download or stream. The video describes Spotify's strategic move into podcasts as a way to diversify its content and gain more control over its revenue streams. This includes the acquisition of exclusive content and platforms like Anchor.

💡Personalization

Personalization in the video refers to Spotify's use of algorithms to create tailored music experiences for its users, such as 'Discover Weekly' playlists. This approach has allowed Spotify to promote lesser-known artists and songs, but it has also raised questions about the transparency and fairness of its promotional practices.

💡Machine Learning

Machine learning is a subset of artificial intelligence that enables computers to learn and improve from experience without being explicitly programmed. The video mentions Spotify's investment in machine learning to enhance its recommendation algorithms, which has been instrumental in driving user engagement and discovering new music.

💡Controversy

Controversy in the script relates to the various disputes and public backlashes Spotify has faced, including artists removing their music from the platform, debates over artist compensation, and issues with podcast content. The video illustrates how these controversies have shaped public perception and business decisions at Spotify.

💡Fake Streams

Fake streams refer to the artificial inflation of play counts for songs, often through the use of streaming farms. The video discusses how this practice can siphon revenue away from legitimate artists, and it implies that Spotify's initial lack of action on this issue was a point of contention within the industry.

Highlights

Spotify is facing a backlash from artists who are removing their music from the platform due to low artist pay.

The hashtag #DeleteSpotify went viral, indicating a growing revolt among musicians.

Spotify's founder, Daniel Ek, started the company during a quarter-life crisis after selling his advertising business.

Ek's initial business ventures involved making websites and recruiting peers with video game bribes.

He attempted to create a search engine but abandoned the idea due to competition with Google.

Ek's idea for Spotify was to create a legal platform for music streaming funded by ads to combat piracy.

Record labels were initially resistant to Spotify's business model, wanting fixed payments per stream instead of ad revenue sharing.

Spotify's early development involved illegally downloading music to create a working prototype.

The platform's launch in 2008 was successful, but the company faced ongoing negotiations and threats from the music industry.

Artists like Taylor Swift have criticized Spotify for devaluing music and pulled their catalogs from the service.

Spotify has been implicated in fake streaming issues, potentially costing artists millions in lost revenue.

The company has grown rapidly, integrating with Facebook and broadband providers to boost subscriptions.

Spotify's shift towards personalization and machine learning has given it more control over music promotion and discovery.

Investments in podcasts and exclusive deals represent Spotify's strategy to own content and reduce reliance on record labels.

Controversies include Spotify's use of fake artists and AI-generated music to cut costs and increase profit margins.

Spotify's influence extends to promoting or suppressing artists based on its own algorithms and business interests.

Daniel Ek's vision for Spotify has evolved from a free ad-funded music library to a technology-driven marketplace controlling access to music.

Spotify's acquisition of Joe Rogan's podcast sparked backlash over payment disparity and content moderation.

The company's impact on the music industry is significant, shifting from piracy to streaming as the primary revenue source.

Transcripts

[Music]

big battle brewing in the music business

spotify is in full damage control mode

these days as the growing revolt of

artists scrub their music from the

streaming platform after hashtag delete

spotify went viral the musicians on

spotify get paid very little spotify's

top podcaster breaking his silence if i

put you off i'm sorry prince harry and

megan also expressing concerns to

spotify their podcast partner all of

that causing a lot of controversy at

spotify that the company has bet the

farm on podcasts we started this company

when i was 23 years old this is daniel

eck founder of spotify and in 2006 he

was having a quarter life crisis

he knew that he should be incredibly

happy he just retired in his twenties

after selling his advertising business

called that vertigo making him a

millionaire in the process he was out

partying most nights and he'd even

bought himself a ferrari yet within a

few months he felt his life had lost all

purpose

[Music]

you see daniel had always been a

workaholic at the age of just 13 he'd

started his first business whilst living

at his parents house the business was

making websites for other people and he

started off by charging a hundred

dollars then the next client he charged

two hundred dollars and by the age of 18

he was charging five thousand dollars

per website he recruited other kids from

his school to help him by bribing them

with video games and soon daniel had a

whole team working for him his parents

were both impressed and concerned

shortly after this daniel applied for a

job at google but they said he needed a

degree which he didn't have so instead

he decided to start his own search

engine although he quickly abandoned

that idea when he realized that

competing with google wasn't a wise move

however daniel were going to try a bunch

of different business ideas most of

which never worked out but then in his

early 20s he hit the jackpots

he sold one of his businesses to a

company called trade doubler for an

estimated 1 million dollars

which brings us back to the whole

quarter life crisis thing the novelty of

doing nothing all day and partying all

night was wearing off daniel needed

meaning in his life again he decided he

wanted to use the money he'd made from

selling his business to focus on an even

bigger idea he wanted to revolutionize

the music industry

meanwhile around the same time as all

this a service called napster had become

extremely popular which allowed people

to easily share files with each other

this meant people were sharing mp3 music

files completely free and it wasn't long

before the record companies sued napster

into oblivion but the problem was

countless similar applications then

popped up like kazaar and limewire along

with sites like the pirate bay it was

clear that now this peer-to-peer

technology was out there the music

industry wasn't going to be able to stop

online file sharing now daniel eck was a

huge music fan himself and absolutely

loved using these free file sharing

services

but he also realized that all of this

was having a very negative impact on the

music industry record sales were

declining every single year so daniel

figured the solution was to create a new

service that was even better than

napster but that allowed musicians and

record labels to earn money from their

music daniel envisioned a platform where

you could access all of the world's

music instantly and that it would be

legal because it would be funded with

ads and a percentage of the ad revenue

would go to the artists

and thus the initial idea for spotify

was born daniel was confident this was

win-win a better experience for users

and a way to save the music industry

from the threat of piracy so he felt

sure the record labels would be on board

but spoiler alert the record labels were

most definitely not on board in fact if

daniel had any idea how complicated and

controversial things we're gonna get

he'd have probably never started spotify

at all

daniel teamed up with a friend of his

called martin who became spotify's

co-founder and together they spent the

summer of 2006 trying to recruit the

best coders they could find they figured

before going to record companies to try

and negotiate licensing deals for the

music rights they needed to create a

great working prototype of their

products

so ironically even though the idea for

spotify was to help prevent piracy

initially a spotify team downloaded

hundreds of thousands of songs illegally

so they could work on developing spotify

and create a working prototype filled

with music to be fair it was kind of a

chicken and egg problem

they couldn't convince the music

industry how well their product worked

without actually building it but they

couldn't build it without the music

so they pirated millions of dollars of

music for free that summer the team

worked frantically to build the spotify

clients they work long days and nights

at the office and when they finished

work they'd often stay behind to play

poker or foosball so that summer they

became a bit of a family given they were

spending almost all of their time

together and within a few months they

created the first version of spotify and

it was genuinely pretty brilliant it was

sleek professional and had a great

search engine and playlist features

there were pages for artists and albums

so everything was neatly organized and

most crucially of all when you clicked

on a song the music began playing almost

instantly

this was a big deal because internet

speeds were a lot slower back then but

the team had designed it so that the

music files essentially downloaded in

small pieces whilst you were listening

to the song which meant there was no

waiting for it to start so once they'd

built the platform they sent out beta

invites to get some feedback from other

people and everyone who used the service

loved it daniel was thrilled with the

product too but he was also extremely

stressed

what he hadn't told his team was that

negotiations with the record companies

to illegally use their music were not

going well at all now the major record

labels who dominate the music industry

are known as the big three sony warner

and universal getting all three on board

was crucial for spotify's success so

daniel had been flying all over the

world for various meetings he explained

the idea of free music funded by ads and

the record labels would be given a large

percentage of all the ad revenue

generated but as soon as the record

labels heard the word free they lost

interest sometimes they even got angry

they hated the business model of making

money from ads instead of people

actually buying the music

they said they wanted a fixed price for

every time a song was streamed

for spotify this could be disastrous

because there was certainly no guarantee

that advertising revenue would cover

that but daniel knew he had to do

something as spotify's money was running

out daniel felt his anxiety increasing

his heartbeat racing

his team had built a great product yet

it was starting to look like the

business would be dead before they could

even launch it but at the last minute

they found a compromise

spotify would also add a paid version of

their service for a fixed monthly fee

they also agreed that the record labels

and music publishers would effectively

get about 70 of all the revenue

generated along with a big chunk of

spotify stock for spotify it was unclear

if this was going to be a sustainable

business model they were only keeping 30

of the revenue was that gonna be enough

to cover all their costs

but they really had no choice but to

accept

the good news was that spotify now had

the rights to use music in most of

europe

negotiations for other parts of the

world like the us would drag on several

more years but finally in october 2008

spotify officially launched the spotify

team then began a process called the big

clean where they went through and

removed all the illegally pirated songs

from their service

at that moment spotify must have

believed their worries with the music

industry were finally over

but that was far from the case

over the years the music industry would

regularly threaten to pull spotify's

licenses if they didn't make the changes

they wanted like removing features from

the free version of the app to make sure

more people joined the paid version

which was much more profitable for

spotify engineers it was incredibly

annoying to have to deliberately make

their free product worse but the record

companies held so much power over them

they had no choice

another example was when the record

companies heard about spotify securing

more funding from investors and so they

tried to negotiate an even bigger cut of

the money for themselves even though

spotify still wasn't even profitable

however it wasn't just a record label

spotify would be in a constant battle

with many individual artists spoke out

against the company too and some

completely pulled their music catalogs

from spotify including metallica pink

floyd the beatles and bob dylan over the

years several other musicians would come

out to publicly criticize spotify for

how much it paid artists taylor swift

was a notable example who in 2014 stated

that spotify was devaluing music and

withdrew all her songs from the app the

thing is it wasn't actually down to

spotify how much money individual

artists got that was down to their own

private deals with the record companies

but it is true that artists were

probably worse off the record labels at

least owned shares in spotify so they

benefited from spotify's growth but

artists themselves didn't they just saw

spotify as hurt in the amount of sales

their music was getting the problems for

artists were made even worse by the

amount of fake streams happening where

forwardsters use streaming farms to

replay certain songs on repeat to

increase their share of spotify's

revenue which takes money away from

genuine artists

it's estimated that fake streams could

be costing artists 300 million dollars a

year

but because spotify keep their 30 either

way they initially didn't seem to do

much to deal with this issue but no

matter how unhappy artists were those

who quit spotify normally returned when

they realized it was better to at least

get some royalties rather than nothing

at all because the reality was that

streaming was here to stay users seemed

to love the service and spotify began

growing incredibly quickly this growth

only increased when spotify made a deal

with facebook to integrate spotify on

their platform and then they did deals

with broadband providers to bundle in

spotify trials with their internet

subscriptions causing sales to rise even

further also spotify had a clever

marketing trick when they expanded into

new countries they'd often require an

invite to initially join which created

scarcity and hype around the launch

even though there were so many invites

that they weren't really limited at all

but the marketing worked and by 2011

spotify had a million paying subscribers

however there was still one big problem

spotify wasn't actually profitable and

some were starting to question if it

ever would be

sure it was clear spotify was popular

but the bigger looming question

was whether spotify was actually a

viable business

[Music]

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[Music]

the game of thrones quote winter is

coming but came widely used by spotify

employees because they knew a brutal war

was just beginning as an ever-growing

number of similar streaming services

popped up the launch of apple music was

a particularly huge threat and it

certainly didn't help that apple held a

lot of leverage over spotify for example

apple seemed to be deliberately making

it very difficult and slow for spotify

to get updates of their app approved on

the app store plus apple takes a 30 cut

of in-app purchases meaning when someone

upgraded their spotify account apple was

taking a huge chunk of the profit which

is certainly not ideal when apple was

one of spotify's competitors but there

were other contenders in the streaming

wars too like tidal who had strong ties

to music artists and so several big

artists started listing their music

exclusively on tidal and then you had

tech giants like google and amazon

getting into music streaming as well

even youtube launched youtube music and

yet despite their fierce competition

spotify retained their lead largely

helped by their free ad funded option

they were actually losing money on this

free tier as 90 of revenue came from

paid subscriptions but the free option

was very efficient at bringing in new

users who later converted to the monthly

subscription but the overall problem was

still clear if all these streaming

services offered basically the same

music or spotify's unique selling points

and not just that but what happened if

the record companies had a change of

heart and pulled spotify's licenses

spotify needed more leverage and

differentiation

the good news for spotify is that daniel

eck had two solutions

the bad news is that both of these would

end up causing a lot of controversy

[Music]

number one is that around 2019 spotify

began investing heavily in podcasts

they spent well over a billion dollars

to acquire contents including exclusive

deals with obama dc comics and joe rogan

they also bought the podcasting platform

anchor for around 100 million dollars

the idea was simple spotify wanted to

start owning content itself

this not only meant that spotify would

have some exclusive content people

couldn't get anywhere else but it also

meant that spotify would pay out less

revenue to record companies and

musicians if users spent more time

listening to podcasts on their app

instead but then the second solution for

spotify to differentiate itself from

competitors and gain more leverage over

the record labels was that spotify began

focusing much more on offering a

personalized music experience

initially the main purpose of spotify

was making it easy to find the music you

want that you already know

but increasingly spotify shifted its

focus to personalization and discovering

new tracks which is why it started

investing heavily in machine learning in

2015 they released discover weekly a

personalized playlist that updates each

week with music recommendations tailored

to each user this proved to be

incredibly popular so spotify then went

on to introduce multiple other

personalized playlists like release

radar for new music

but here's the thing by controlling the

playlists spotify suddenly had a lot

more power

and that they subtly began to move

listeners slightly away from music owned

by the major labels and towards songs

that were less expensive for them to

license the personalized recommendation

algorithms were biased towards music

that was cheaper for spotify to license

or music which they kept a higher

percent of the revenue share things got

even more controversial when music

business worldwide published a list of

50 unknown artists whose music was

trending on some of spotify's biggest

playlists altogether the tracks have

been streamed over 500 million times

but here's the problem the artists

weren't real you'd search their name and

they had no social media or online

presence just a few songs on spotify

with huge amounts of streams articles

started popping up about spotify having

fake artists it only later became clear

spotify had licensed music from epidemic

sound who sell access to a huge library

of royalty-free music

it's a service commonly used by

youtubers in fact i use it myself but by

spotify adding these tracks to playlists

and clearly artificially boosting their

prominence on the spotify app it meant

spotify would have to pay less money to

the record labels and musicians

some people strongly condemn this as

they said spotify was taking away spots

in playlists from genuine artists who

had earned the right to be there and

diluting their streaming revenues even

further plus the whole thing was made

even shadier by the fact that one of

spotify's early investors also owned

part of epidemic sound but there's

reports what if i want to take this even

further with some articles suggesting

spotify could soon replace real artists

with ai music

basically the idea is that hit songs

will be able to be created through

artificial intelligence which for

spotify would be another way to own the

rights to the music themselves they

didn't have to pay artists so much and

thus massively increase their profit

margins by sprinkling some ai music into

their popular playlists

but the whole point here is that since

over a third of the music listened to on

spotify is now coming from spotify's own

recommendations and playlists they

suddenly have a lot of influence over

the music industry if they decided to

kickstart a certain new unknown artist

career they could literally catapult

them to success immediately by adding

their songs to certain playlists and on

the flip side they can suppress the

reach of other artists for example they

started reducing the reach of songs

containing hate speech and essentially

shadow banned certain artists from their

playlists who had been involved in

controversies such as r kelly we know

about this speaker's spotify made it

public but most of the time we have no

idea who spotify or artificially

promoting or reducing the exposure of so

it may not seem like it at first glance

but spotify has changed drastically from

when it first began

[Music]

daniel originally wanted to build a free

library of music funded by ads but now

daniel describes the company as a

technology driven layer between fans and

artists he sees it as a two-sided

marketplace where spotify gain revenue

from both listeners and artists

themselves listeners pay for access to

music artists pay to reach their

audience

for example labels are now paying

spotify for inclusion in playlists and

paying more money for higher rankings in

those playlists spotify are also

allowing musicians to promote their

merch and ticket sales through spotify

basically spotify moved from being just

a distributor of music to a platform

that controls the music in fact in 2017

billboard named daniel eck as the most

powerful person in the music business

of course even though spotify have

regained some leverage that doesn't mean

spotify's problems are over

spotify's acquisition of joe rogan's

podcast has already created several

different backlashes firstly artists got

angry that spotify were paying a hundred

million dollars for a podcast despite

the fact they received just fractions of

a cent for each stream of their music

then some people got angry that spotify

was sent from joe's podcast when spotify

took down several episodes from his back

catalogue but then other people got

angry when spotify didn't take down

certain episodes of joe's podcasts that

they said were anti-vaxx causing yet

more artists to pull their music from

the platform basically people on all

sides were angry but ultimately no

matter what you think of spotify it's

clear what a huge impact it's had when

we think of the history of music we can

see the transition from vinyl to

cassette tape to disk to mp3 player and

now to streaming streaming has become

the largest revenue source for the music

industry and so some would say spotify

really has succeeded in its initial goal

of saving the music industry from piracy

then again others would say it's done

more harm than good artists get less

money and spotify now have a growing

amount of control over who succeeds in

the music industry and who doesn't

what's really interesting though is

spotify's new goal of becoming a central

online hub for podcasts was actually

tried almost two decades ago by a little

company called audio which went on to

become twitter to see the crazy full

story of what happened there just click

this video right here

i'll see you there cheers

[Music]

you