With Spotify's financial results coming up on Tuesday, let's look at the flood of news from the company over the past week or so. I'll break it up into sections: A new podcast strategy surfaces As part of its layoffs in January, Spotify restructured its podcast organization. Dawn Ostroff, the chief content and advertising business officer, left, and Sahar Elhabashi stepped up to VP, head of podcast business, reporting to Alex Norström, co-president. What wasn't clear at the time was what exactly would change strategically. Last week, Elhabashi updated her staff on her new priorities, which include (1) growing on-platform consumption, (2) creating more monetization opportunities for creators, (3) earning greater creator loyalty by helping them make more money and find new fans and (4) capturing more ad dollars by expanding the reach of the company's own shows outside of the platform. As part of the latter objective, Semafor reports, Spotify will start distributing some of its previously exclusive shows from Gimlet Media onto other podcast apps. None of this sounds revolutionary, necessarily. But it's clear Spotify sees a business opportunity in being able to more successfully sell ads not just for its own shows but also those of other networks. This is why I previously highlighted the company's deal with NPR. These types of arrangements with large networks provide Spotify with more inventory and more money-making opportunities. This strategy is also at work with a partnership the company just announced with Jellysmack, a digital creator-centric media organization. The company will bring some of its creators' video content to Spotify, which will sell ads against the programming and share the resulting revenue, according to a Jellysmack spokesperson. A shake-up in audiobooks Nir Zicherman, co-founder of the Spotify-acquired Anchor and VP, global head of audiobooks, announced he's leaving the company at the end of September. David Kaefer, VP and global head of business affairs, will continue to oversee the audiobooks business. At the same time, another employee on the audiobooks team, Sara Lerner, head of business strategy and operations for audiobooks and gated content, announced on LinkedIn that she left the company earlier this year. Another employee assigned to the vertical tweeted that they were laid off as part of the restructuring within the division. This week, CEO Daniel Ek traveled to Washington, D.C. in an effort to shore up support for the streaming service's ongoing battle with Apple over App Store fees and, particularly, Apple essentially nuking the company's audiobooks product. Apple told my colleague Emily Birnbaum that Spotify's app had previously been rejected for "not following the guidelines regarding including explicit in-app communications to direct users outside the app to make digital purchases. We provided them with clear guidance on how to resolve the issue, and approved their app after they made changes that brought it into compliance." My sense is that some of this could be solved if and when Spotify releases new subscription tiers that include an all-you-can-eat audiobooks model. A Spotify spokesperson tells me the company's audiobook strategy hasn't changed and that it's dedicated to building a "great listener experience and developing new, innovative business models." A brewing, Swedish union battle Earlier this month, Swedish Spotify employees went public with an effort to unionize. CEO Ek responded internally, pushing back against the union's narrative and questioning the need for a collective agreement because, he argued, it'll make it harder for Spotify to compete for talent and also wouldn't have prevented recent layoffs from happening. "The unions' central questions about continuous skills development, annual salary revisions and salary increases in relation to the 'brand' are obvious to us at Spotify," he wrote. "In the tough competition for Swedish and international talent, we must offer salaries, benefits and staff options that allow employees to share in the value Spotify creates." A spokesperson declined to comment. More purchase shutdowns I wrote a couple weeks ago that Spotify was shutting down its Live app. Last week, Spotify announced it would also shut down Heardle, a game it acquired less than a year ago that challenged players to identify a song from just a snippet. With layoffs, budget constraints and bigger questions about Spotify's podcasting efforts, I read these decisions as a moment for the company to focus on its core businesses. About the live audio app shutdown, a Spotify spokesperson said it has seen "promising results in the artist-focused use case of 'listening parties,' which we will continue to explore moving forward to facilitate live interactions between artists and fans." As for Heardle, the spokesperson said Spotify will focus on other music discovery methods. About that Drake and The Weeknd "collaboration" Over the past weekend, some of you might have seen the mysterious song Heart on My Sleeve from a poster named @ghostwriter977 blowing up on TikTok and social media. It's a track designed to sound like a collaboration between Drake and The Weeknd. But it was allegedly actually created through artificial intelligence. (There are still open questions about which portions were AI-produced and how it all came together.) Universal Music Group, whose Republic Records label works with both artists, issued a statement calling for streaming partners to prevent the "use of their services in ways that harm artists." Days later, the song was officially taken down and unavailable on streaming services, including YouTube and TikTok. Copies keep springing up online, however, including one on YouTube I spotted today that had garnered over 50,000 plays in just a day. Ghostwriter also put a link on their TikTok profile offering to text people the song. I wrote last week about UMG's particularly strong stance against AI products that infringe on copyright, including the use of UMG-owned music to train the software. This incident, I suspect, is only the beginning of the types of fights we're going to be seeing a lot of in the music industry involving AI. |
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