Spotify CEO Daniel Ek Live at D: Dive Into Mobile
Spotify’s Daniel Ek, who heads up the most talked about streaming music service in Europe, continues to promise a U.S. launch this year.
But the company has been unable to strike deals with U.S. music labels, which fear popularity of the service could cut back on sales of CDs and digital downloads. In Europe, the popular service offers unlimited tracks for free, or users can subscribe for an ad-free version.
With three weeks left in the year, will the Swedish entrepreneur keep his promise? Stay tuned as Ek takes the stage with MediaMemo’s own Peter Kafka at D: Dive Into Mobile.
10:06 am: Peter takes the stage to welcome Daniel Ek.
10:08 am: Peter: Spotify is the most awesome music service that you can’t get in the U.S. It’s Dec. 7; can you get it in the U.S.?
Daniel: No, you can’t. There are more complexities. We have to do deals with music labels, etc. It’s hard, he says. “It’s a business problem and a product problem at the same time.”
10:09 am: Daniel is still eluding the question.
10:09 am: We are definitely going to do the U.S., you’ll see. I’m here today.
Peter: You can’t commit to launching in the U.S.?
Daniel: I can’t commit to a specific date.
10:10 am: With no news on a launch date, Peter asks Daniel how it works.
Daniel: You download it to your PC, and it’s also supported on a host of mobile phones. The general idea is that you can access music for free, with adverts, or if you pay, you can take it with you. The limit is 20 hours of music a month.
10:11 am: Daniel: There’s not that many ads; the fee is 10 euros. It will be $10 in the U.S. (Whenever it comes, I suppose.)
10:11 am: Peter: This sounds like a lot of products–Rhapsody, Napster, Thumbplay, etc. What’s different?
Daniel: The concept isn’t different, but more people now are consuming more music than ever. You aren’t just a punk rocker, but you may also be listening to old-school blues, etc. Music has to adapt to a consumption model.
10:13 am: Peter: Do we no longer value music because of Napster 10 years ago?
Daniel: Yes, that’s part of it, but people also want to have access to everything on every device. In the past year, we’ve seen the adoption of smartphones. Pandora has been very successful because of smartphones. People are consuming a lot more of it.
10:14 am: Peter: It’s all free, so this is a problem for the producers who aren’t getting money from anyone.
Daniel: That’s a problem, but we’ll figure out ways to provide value that people are willing to pay for.
Peter: How many subscribers do you have in Europe?
Daniel: 750,000 paying customers, who pay about 10 euros a month.
Peter: Okay, that’s up from half-a-million earlier this year.
10:15 am: Daniel: What’s unique about Spotify and why we are growing so fast…
How fast? Peter asks.
Daniel: We launched on mobile in September 2009, so it’s been about a year.
The value is convenience and accessibility and packaging it in a good way (i.e., some of the stickiness comes from users creating lists and building their libraries).
10:17 am: Daniel: Another thing helping our growth is social networks, he says. They have a huge impact on people sharing content. It’s getting to become the primary way of how I find out what’s going on.
10:18 am:( It’s demo time! For all of those who have special access, or have hacked it, you know what this looks like already.)
10:18 am: Daniel is showing off his playlists, some of which come from Spotify and some from tracks he already owns. He’s showing this offline (because he doesn’t want to incur roaming fees), so he can’t demonstrate how you’d search for new music.
10:20 am: Peter: Are people comfortable with renting songs now, and listening to music in the cloud?
Daniel: This is something the industry needs to work on to make it 100 percent reliable, but it lets people have access anywhere.
10:21 am: Daniel says he wants to provide music to users “super fast.” But he sure is dragging his feet when it comes to providing it to U.S. consumers…ho hum….
10:22 am: Peter: People are still buying CDs.
Daniel: People are always asking me why. Is it because they want to own it? I don’t think so.
10:23 am: Daniel: Everyone expects things for free on the Web, but Apple is showing that people are willing to pay for apps.
10:24 am: Peter: I hear about how Apple might be working behind the scenes, telling music labels not to work with Spotify. Have you heard that?
Daniel: I read the news, so I’ve heard about it. I don’t actually try to focus on what Apple is doing, or what others are doing. I am, first and foremost, a user.
10:26 am: Daniel: China has 400 million Internet users, and one of the top things they do on the Internet is music. For me, it strikes me as odd, the value of the entire music business is $15 billion.
Peter: It used to be $40 billion. What’s the holdup with the labels?
Daniel: It just takes time. There are a bunch of companies that say they want to do it this year. But at the end of the day, you can only do so much that’s in your control. We believe in our model.
Peter: Which is to give music away for free. Would you change your model here?
Daniel: We would not just launch a subscription service here. Right now you can pretty much access any music for free. YouTube is one of the biggest sources in the world.
10:30 am: Peter: Are you raising money now in order to pay more to get the music deals done?
Daniel: No, but I wouldn’t rule it out in the future, though.
10:31 am: What’s it like to work with Sean Parker, who was from Napster and Facebook.
Daniel: I just saw “The Social Network.” I’m not sure if it’s true, but I really liked it. Sean wrote me this really long email about all the flaws in Spotify. He’s so great at product, so for me, this is someone who has been thinking about the product since the beginning of Napster.
10:32 am: Peter: Any audience questions? Jokingly, he asks, “How about from Rob Glaser (former CEO of RealNetworks)?”
10:33 am: Next question from Glaser! He asks about the music label deals he signed in Europe.
Daniel: It’s a really interesting time. If this is going to be the next big thing, that’s why they are taking their time. Is it going to be a la carte, or subscription?
10:35 am: Peter: Google has been talking about music, and Facebook is thinking about it. Would you link up?
Daniel: We are a developer on both Facebook and Android.
Peter: I mean deep core integration.
Daniel: We would never do any exclusive deals. We want to get music to become like water. We think it’s the most social object in the world. If music could flow freely on the Web, it would surpass the popularity of photos. People are paying by looking at ads, buying tracks or subscribing.
10:37 am: Last question from the audience, about Nokia-bundled music with smartphones through a service called Comes With Music. “Do you think those kinds of integrations can work?”
Daniel: I do. Our whole strategy is around the platform. I don’t know how well the integration worked with the phones, but it wasn’t playing nicely with the Web, or with the iPhone. Like the Kindle. It works on the Kindle, but you can also read books on the iPad. Whether people pay for the device and it’s bundled in, or whether it’s part of a TV package, it doesn’t matter.
10:39 am: That’s it folks–thanks for tuning in!