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

I look at what's happening with the Internet now as the single biggest thing since the industrial revolution," CEO Daniel Ek further adds.

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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."

15 comments sorted by best / new / date

    I have nothing really to say about the content of this article, since I neither subscribe nor plan to. But the article picture had me thinking "when did Billy Corgan become CEO of Spotify!?"
    we pay out 70 percent of the money we make. I think that's fair Seems totally fair considering 100% of the money spotify makes comes from other people's work. He's just mad that his idea is easy to replicate. CDs until the end.
    So the store you buy your CDs from shouldn't get any cut of it either since the artists made all the music they sell? Spotify's job is not to create music. It is to facilitate it and send to to as many places as possible. Lets be honest here...they are doing a darn good job when it comes to that.
    I do, to listen to no new music is living a sheltered life. I love the discover option, plus it gives unsigned artists a chance too.
    Unsigned artists a chance? $0.007 a play isn't a chance for an unsigned artist. Use that $10 or whatever it is a month to buy a guy's CD or a local gig or something like that. It'll go wayyyyy further as far as supporting smaller guys go. And by the way your subscription isn't evenly split and given to the artists you listen to, most of it still goes to Kanye West and Nickelback
    "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" So you're telling me that I'd rather listen to 20 million unfamiliar songs over the 1000 I actually want to hear? Like I get what he's saying, but who really enjoys listening to new (unfamiliar) music SOOO much that they'd pay $10 a month to do that at any given time without going on youtube
    Well, I do. YouTube is not meant for complete album streaming, even though for some albums it is possible. Spotify is a cheap solution and almost all the music is on there.
    My point is most people's tastes in music is the music they're familiar with - that's a fair statement, yeah? I just think it's a bit weird to pay a monthly subscription for music that you don't deem good enough to directly support nor put on your ipod. And sure, I love finding new music but I don't particularly want to pay money to have my time being potentially wasted by artists that I don't end up liking
    I think you are implying, and I might be wrong, that you can't access any song in the Beats catalog at any time. You can switch, stop, or play any song you want at any time. They are marketing the discovery aspect of it because that is how it differentiates itself from services like Spotify.
    I wasn't saying anything about beats - just the concept of listening to music on a subscription. Spotify or beats, there is absolutely no reason to pay to discover music in 2014. We live in a world where paying for music is completely a choice - and people are choosing to pay for the music they haven't heard yet - and for the music they do like, they're giving amounts of money totally insignificant to their careers. Money can be put to better use in the industry
    Sure, but music fans will want to discover new music. If you're not looking for new music... ever... then there's no point in paying for Spotify, I agree. However, if you are surrounding by people saying "Hey, check this" or "check that", it is very convenient if you can just access all that music on a service you are already paying for. It's only 10€ a month. Normally I would buy a new album once a month (at least). If I now discover one really good album each month, it's worth the cost a lot. And I'll tell you I discover way more good albums per month than just one.
    I'm always finding new music. I can also tell you that 9/10 artists on my ipod's playlist has received money directly from me of a much larger profit - and it hasn't costed me any more than a music subscription would. Give your money to artists you actually like rather than an artist you're about to gamble 40 minutes on.
    You have a valid point, absolutely. Aside from Spotify, which I'm just using for a month or two, I always buy albums of artists I really like. But for discovery, Spotify is a great tool. Especially if you're not working a full job (yet).
    So if I were to pay the $10 per month, do I get to select whatever song I want to listen to at any time out of their database, or does it just stream random stuff in the genre or from the band I select?