Spotify Jab at Beats Music: 'We're Not Just Slapping Some Celebrity Brand and Hoping It Will Be Good'

artist: Spotify date: 01/23/2014 category: music news
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Spotify Jab at Beats Music: 'We're Not Just Slapping Some Celebrity Brand and Hoping It Will Be Good'
As the latest launch of Beats Music service is shaking up the music streaming domain, Spotify CEO Daniel Ek addressed the company's latest competitors, giving them both kudos and a mild jab.

"It's a competitor, for sure," Ek told Hollywood Reporter about Beats Music, "but my way of looking at it is, if it gets people to understand the value of streaming, it is ultimately good. Our way of doing this is not just slapping some celebrity brand on it and hoping it will be good. We are a social service; we are a product company. People have tried to put a brand on it and thought that's enough, and they have failed: Microsoft, Nokia - many big companies."

Speaking of competition, Daniel compared his company to iTunes, describing Spotify as obviously superior. "iTunes is more of a competitor because it is 'your music' for a lot of people. But it is so obvious that Spotify is much better because you can put more than 20 million songs in your pocket and access at any moment. You just pay your $10 per month or even use it for free. The benefit of being on Spotify as opposed to iTunes is huge."

Focusing on the current state of affairs, Ek shared the company's vision for years to come, putting long-term profitability as top priority. "We're a young company, and this journey is just starting," he noted. "If you ask an average American how they get their music, none of them are really streaming. People here have just figured out Pandora in the last 12 months, and that service has been around for 13 years."

Further asked about the number of users required for Spotify to become profitable, Daniel explained: "We must be one of the most transparent companies that is not public. We have paid out over $1 billion to artists - we pay out 70 percent of the money we make. I think that's fair."

CEO continued with a question: "So why are we not making a profit? It's very simple: We are growing. We are putting Spotify in more places, on more devices and in more countries. We have been in 35 countries, and as of December we are in 55. We don't care about profitability short-term; we care about long-term.

"I look at what's happening with the Internet now as the single biggest thing since the industrial revolution. When in history have you had this opportunity, with 1.6 billion people now connected to the Internet?"

Finally, Daniel addressed Thom Yorke and his Spotify protest, saying, "This is the single biggest shift since the inception of recorded music, so it is naturally going to draw criticism and speculation. [Yorke] looks at this and says over a million streams gives me a few thousand dollars, and he says if I had a million downloads [which pay higher royalty rates], that would mean $1 million - so Spotify is not good.

"But the difference is, he would not have had a million downloads because they are not comparable," Ek added. "In fact, with 24 million users - and Apple has 500 million users - we already have billions of streams today."
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