Business

Spotify's Land Grab Extends to Executives, Just Ask New Hire Tom Calderone

Tom Calderone 2016
Evan Agostini/AP Images for VH1

Tom Calderone at the VH1 Save the Music Foundation 2010 Gala held at Cipriani Wall Street on Nov. 8, 2010 in New York City.

Spotify’s hiring of music veteran Tom Calderone is the latest example of the new music industry tapping the old music industry for top talent.

Spotify has lost hundreds of millions of dollars giving growth priority over profitability. In a quest to grow the music streaming market while taking its biggest share, it has expanded around the globe, built a top-of-the-class product and hired lobbyists to promote its agenda to legislators. It has also hired people from record labels, radio and television to deepen its connections to the music industry.

Its latest hire is Tom Calderone, the president of VH1, svp at MTV, television producer, radio consultant and radio programmer (he was an early adopter of the guitar-driven alternative rock format while at WDRE in Long Island in the early '90s). As head of content partnerships, Calderone will direct Spotify’s original content and relations with artists, publishers and labels. There are few potential hires with as much experience or as many relationships.

High-profile hires have come in rapid succession. Last year, Spotify brought aboard country programmer John Marks and EDM program director Austin Kramer from SiriusXM Radio, BBC head of music George Ergatoudis and music television veteran Tuma Bass. Apple Music hired four producers from BBC Radio 1 in addition to famed BBC Radio 1 DJ Zane Lowe. Pandora hires have included Columbia Records vp Lars Murray to lead its artist relations team and Tommy Page, a former executive at Billboard and Warner Bros. Records.

Digital music hiring is reminiscent of Silicon Valley. Tech companies must compete for, obtain and retain top talent that’s in short supply. Sometimes they’re willing to overpay to prevent a brain drain to their competitors. While Spotify or may not may be paying more for talent, every music industry hire it makes is a hire its competitors won’t be able to make. Top talent is a zero-sum game in this competitive business.

But the hiring of Calderone isn’t just game theory -- it reflects the importance of building bridges to the traditional music industry. An interesting aspect of the new hire is Calderone’s oversight of relationships with music publishers. Spotify has not hired from the worlds of music publishing and performing rights organizations to the same extent it has tapped record labels, artist management companies, satellite radio and broadcast radio. Given its problems with music publishing rights and royalties management, Spotify could stand to improve its relations with music publishers.  

It’s often said that content is king. That statement made less sense when digital distribution shifted the balance of power from content creators to technology companies. But power is shifting back, as technology companies have realized relationships with content creators are key to their success.