Daniel Ek Talks Apple, Taylor Swift, Spotify’s Direct Listing In New Interview
In an interview with CBS This Morning on the day of the company's direct listing, Spotify's Daniel Ek spoke about competition from Apple Music, ironing out issues with Taylor Swift and his views on…
Spotify officially debuted as a public company today (April 3), with shares having opened for trading on the New York Stock Exchange at 12:30 pm EST this afternoon at a price of $165.90 per share. And unlike many tech darlings with splashy IPOs and CEOs working the floor the day of their public launch, Spotify’s Daniel Ek chose to go with the more unusual, understated route of a direct listing, prioritizing long-term stability over making a big statement out of the gate.
So it follows that Ek, who has largely avoided giving interviews over the last few years, eschewed the Wall Street insanity in favor of giving a single, five-minute interview to CBS This Morning, where he discussed the decade-long road to Spotify’s public offering, his hiccups involving Taylor Swift and artist payments along the way and his competition in the field of streaming music. And, as he wrote in a blog post published on Spotify’s web site yesterday ahead of the big event, he sees the public listing as just an early step in what will be a long road ahead.
“We started this company when I was 23 years old,” Ek, Spotify’s co-founder/chairman/CEO, told hosts Gayle King, John Dickerson and Norah O’Donnell. “Now we’re a decade into that journey, and I really just feel like we’re in the second inning. While this is obviously a big day and I’m very proud of my employees, I really feel like we’re in the early days, not celebrating the end days as so many other companies are doing.”
Ek noted that Spotify’s data indicates that access-based streaming that gives music listeners the ability to listen to 30-million-plus songs by 3-million-plus artists via its platform not only leads to them listening to more music, but more artists and at more varied times. New Yorkers, he said by way of example, listen to the most music between the hours of 10pm and 11pm at night, according to the company’s data, while he also said that mood- or situation-based playlists — like for the gym or a barbecue — are big among listeners.
Still, Spotify, with 71 million paid subscribers around the globe, is facing stiff competition from the likes of Apple Music (36 million global subscribers) and Amazon Music Unlimited, the latter of which told Billboard yesterday (April 2) that the rapid adoption of its voice-activated smart speakers has contributed to more than 100 percent growth in subscribers over the last month alone, equating to “tens of millions” of paid customers. That, as well as Spotify’s financials — despite earning approximately $5 billion in 2017, the company still posted a $1.5 billion loss — has some potential investors wary of the world’s biggest streaming service.
In the past, Spotify has had to deal with some songwriters and artists who were wary about the effect that Spotify — and streaming services generally — were having on the ability of artists to make enough money from their work, given that per-stream payouts often amount to fractions of a penny. One notable holdout from the service was Taylor Swift, who kept much of her catalog off Spotify for an extended period of time due to her concerns about fair compensation. Ek addressed the Swift backlash head-on.
“First off, I should have done a much better job communicating this, so I take full ownership of that,” he said about the messaging around royalty payments. “I went to Nashville many, many times to talk to [Swift’s] team, spent more time directly explaining the model, why streaming mattered. And the great news was I think she saw how streaming was growing, I think she saw how fans were asking for it, so when the new album came up she came to Stockholm and spent some time with our team there figuring out a way that made sense for her.”
When asked about a Wall Street Journal report from February that predicted that the number of Apple Music subscribers in the United States could outstrip Spotify by July — neither company breaks out subscriber numbers by country or region — Ek played down concerns and said that the company welcomes the competition. (In a humorous and semi-ironic observation, the hosts noted that Ek was wearing an Apple Watch on his wrist.)
“We are about twice the size of [Apple] so I think we’ve still got some room and I’m very happy with the growth that we’re seeing in our business. I can’t speak for them, but I feel pretty comfortable,” Ek said. “When you have something like music that billions of people around the world care about, you’re never gonna be alone. This is too big and it matters for too many people. So what we’ve found is when we’ve got competition, it actually grows the market, because more people are now talking about streaming. It’s easy to forget that just three years ago, even in the U.S., streaming wasn’t really a thing — it was still downloading songs. So this helps educate the market, and that’s equally true across the world.”
Check out the video below.
Ed. Note: This story has been updated to reflect the correct time and opening price of Spotify’s public listing.