The Exchanges

Q Yeah, why? That's, that's the question. And, and did you expect that it would be That fast, given that you were so methodical and working so long to launch it.

A We, we don't always know how fast this will be, but I think we had a pretty good sense that we could sort of iterate and improve our way and sort of held climb from the mountain we were on when we saw the sort of initial traction. But I think the, the contrarian that we did, unlike many others did, was, you know, at the time when we launched, it's, uh, it was sort of viewed that you needed to have a different app for everything, right? Like you had to have a separate podcasting app and podcasting music were very different. And for us, it's just listening. And what we realized is we should use this base of what was then several hundred million people and today's way north of half a billion people and just serve them more stuff. And it turns out that like what we saw all the time, it wasn't like our music listeners weren't listening to podcasts. So why not use this experience and also recommend them great other stuff. And we went from there and then a year ago, We also added audiobooks, because that turned out to be another way to increase people's listening and that they were also spending time doing.

AI assessment note: “We, we don't always know how fast this will be, but I think”

Q uh, have recently realized that Acquired is the canonical episode, uh, uh, NVIDIA episode, or TSMC, or Taylor Swift. These are more like conversational audiobooks between David and I than they are podcasts. Yeah. They're four hours long. They drop infrequently. How does that kind of fit into, uh, what you imagine is the job to be done by audio? And is it an audio book? Is it a podcast?

A My view, I guess, is the boundaries are from a format side is definitely being blurred quite a lot and, and for right reasons. But the better way to think about audio books and podcasting is it's, it's really around a business model mostly. So one way to frame it instead would be Podcasting is ad supported audio and audiobooks is paid audio. So for you guys, I mean, I also happen to know you spent so much time and effort on the research of that side. You could imagine that in the future you have the, um, ad supported side of your podcast be certain types of episodes and, and you'd have for your subscribers, um, The unlock where they get access to, um, you know, these kind of deep dives, et cetera. And obviously the subscription thing could be as simple as like, hey, you're part of our other network and it doesn't cost money, or you could pay gate it all the way through. But I think it's more of a business model that's the big format differentiation, because as, as we said, like the quality, the mics we're using relative to an audiobook, there, there's no difference here. You're using like high quality camera equipment. Um, also very similar to more professional style than sort of do it yourself kind of equipment, editing, all these things. It's getting more and more blurry.

AI assessment note: “the better way to think about audio books and podcasting is it's, it's really around a business model”

Q you're looking at the data all the time or other podcasters, I think it's easy to underestimate how seismic of a shift has happened in the podcasting ecosystem since you guys dove in. And I just wanted to sort of acquired style, go to a moment in time and say, how did that happen? And how did you guys decide to become an audio company instead of a music company?

A I like to say that there was probably this genius insight at some point in moment, but that's certainly not in the case of Spotify true. Uh, it is often quite serendipitous. And for a long time, you know, I was kind of fighting the urge on this, but we were oftentimes trying to Not think of ourselves as the users and customers, because once you got through kind of a hundred million users, you're kind of like, well, obviously I shouldn't be the target demo. I need to kind of listen to what the actual users are telling me. And there, there's some part that's true with that, but then, uh, more and more what I've, I've realized, uh, is also that actually internally, we probably have the best sounding board of a quite representative Spotify user and what they might like. And so, uh, one of my favorite topics is how often people game our platform. For instance, in Germany, unbeknownst to us, but one of the, the sort of crazy things that ended up happening was just people started uploading audio books because it turns out that, um, these music labels actually own a bunch of audio book rights. And so as the platform was taking off, they realized what else can we put on this platform that gives us a leg up and creates more revenue for us. And they realized that They have this catalog of audiobooks sitting on there. So I think that was kind of one realization where we kind of realized, h…

AI assessment note: “we kind of realized, hey, this platform, it doesn't seem to matter all that much”

Q In retrospect now, you know, God, how long, 15 years later, Was it almost like a benefit that you had to launch geographically specifically because of the label negotiations, like that you could really saturate Sweden, the UK before moving?

A Oh yeah, for sure. We all believe that these like sort of internet companies that go global day one, that's like the right approach. I, I actually think. 99.9%. This is just untrue and false. The entrepreneurs have to revise. We all, all are benefited from constraining ourselves To finding what our first audience is. And it could be geographically niched. It could be, uh, that it actually is, um, you know, again, a subset of, uh, uh, uh, demographic or, or, or whatever, but, but, but more often than not, it's actually geography helps limiting yourself to a city, to a state, to a country, whatever it might be. And so that was a huge part. I can tell you definitively Spotify would not have been alive today had it not been that we Couldn't launch in the US as our first market, huh? And, and if you ask me at the time, it was like a huge kind of step back to say, well, I can't launch in the most, uh, biggest market in the world. And I'm, I'm running an internet company like, come on.

AI assessment note: “Spotify would not have been alive today had it not been that we Couldn't launch”

Q Did you contribute code to the Spotify code base?

A No, they won't let me do that yet. So I, I got a little bit more work, um, to do before, before they allowed me to do it. Yeah. I think out of spite, they probably won't let me do that anyway. They pride themselves on, on not, um, I don't have any access to any of the actual systems. Um, but it was, it was such a liberating feeling because it made the re-entry for me, um, so much easier, uh, and so much more enjoyable. And so I think about that. So if you think about the world of music now, there are tens of millions of people, uh, in the world that probably are recording stuff, but there's a hundred, Two hundred million, something like that, that's playing some kind of instrument and expressing themselves musically. There's nothing that says that it wouldn't be possible for those hundred million plus people to make something that actually sounds pretty good. Now, again, um, what is that going to do with the music industry? And is it really going to be that all of a sudden everything becomes commoditized? I don't believe so, because we've seen time and time again the quality rises to the top and actually becomes even more valuable, um, in that world. Photography being the sort of key reference point. When Instagram came, oh, no, no one's gonna want photography, but Price of fine art photography actually increased, not decreased. So my view is you're going to see both extremes. …

AI assessment note: “No, they won't let me do that yet.”