March 13, 2012 at 4:28 pm

Interview: Spotify’s Ken Parks on Artist Holdouts, Apps, the Car, and the Future

ken parks spotify interview sxsw 2012

Spotify chief content officer and managing director of North America Ken Parks

AUSTIN, TEXAS — caught up with Spotify’s chief content officer and managing director of North America Ken Parks at the Austin Convention Center during SXSW 2012 to hear his latest thoughts about the artists and labels who refuse to license their music to Spotify; the company’s burgeoning app ecosystem; and the possibility of an open API for cars that would help put music apps in more dashboards. Spotify launched in Germany today, bringing its total number of supported countries to 13.

This interview has been edited for length and clarity.

Eliot Van Buskirk, I heard there was some interesting talk at your panel today about windowing [releasing content to different types of services at different times]. Some people in the music industry seem to be inspired by what they see happening with movies, where stuff gets released on different platforms — theaters, pay-per-view, pay cable, basic cable, broadcast, etc. — at different times.  I was wondering what the latest is regarding Spotify and music windowing, as well as on bands and labels that prefer to withhold their music from Spotify.

Ken Parks, chief content officer and managing director of North America, Spotify: The interesting thing about what’s happening in the movie industry is that it’s actually going in the opposite direction. There’s a movement away from windowing. We were lucky enough today to have on the stage with me David Draiman, the lead singer from Disturbed, who has sold millions of millions of records, and he brought his perspective to this issue. He thought it was a sort of counterproductive idea. What Spotify has done is brought millions and millions of people from the the world of piracy and platforms that don’t monetize so well, to a platform where they can be monetized, and ultimately be shown the way to a subscription service that pays to the industry, at a retail level at least, $120 per year.

So that’s a good thing for everybody. I guess the ultimate message around windowing is that it’s a great thing when somebody 20 years old wants to spend $120 a year on music. On behalf of artists and labels, we’re trying to get people to stop stealing music. To do that, we kind of need the cooperation of the artist community, and it is counterproductive to withhold your music from a platform like that. If someone’s spending $120 a year on music, that’s exactly the kind of person that everyone needs to be embracing, rather than putting off by withholding content. Thankfully, this is a very small number of acts right now, and we do have broad support from the industry, which is really gratifying. So basically, if the window is closed, people will break it and take the stuff anyway.

Parks: Well, it’s a fallacy to think that you’re creating any kind of scarcity or windowing when you withhold from our free service. Take, for example, a record like “Someone Like You,” yet another amazing track from the Adele album, that has been viewed hundreds of millions of times on YouTube at the same time that it was withheld from the free service on Spotify, so it’s not like you’ve withheld it at all — you’ve just caused people to go searching for it on some place that doesn’t monetize as well as Spotify.

Look, this is a complex model compared to the old unit-sale model. It’s new. It’s not surprising that there would be some who are taking a pause, but ultimately, we think that logic, common sense, and business sense will prevail, and this small number of cases will dwindle even further over time. And now, if they’re staying out of Spotify, they’re staying out of this whole app ecosystem, with that shocking number — 1500 years of listening in three months. That starts to feel like YouTube, how they talk about 60 hours of video uploaded every minute. It’s a huge number. I would imagine that might strengthen Spotify’s negotiating position. It’s like, ‘You’re not just staying out of our thing, you’re staying out of all this other stuff too.’ Right?

Parks: Let me give you a real-world example of the kind of thing that happens within the Spotify ecosystem. Someone who’s not a Spotify user will see on Facebook that a friend is listening to a track. That person will click, and in one click, will download the Spotify client and become a Spotify user. That user will be on the Spotify client and see that there’s something like Songkick, which is an app available on our platform.  As that person is listening to the same track as their Facebook friend, he or she will see that the artist is going to be playing in their town next week, and will click on a link to buy a ticket.

I mean, those are real-world loops and scenarios that are occurring thousands and soon millions of times every single day. I think artists are going to want to be a part of that. Songkick just got a big investment, and I feel like that had to have something to do with its Spotify relationship.

Parks: Well, it was great — they were a launch partner in the U.S., and we think they’re a great company — they’re doing some pretty amazing things. Can you hint at all about what Spotify apps might be coming next, or what kind of theme there is? It seemed like the second round was sort of fan curation, and the first one was sort of everything across the board, and Pitchfork and Rolling Stone. Is there a way to discuss what the next batch might be?

Parks: The really cool thing about the platform, and I’m not trying to be cheeky here, is that we don’t actually know how this thing is going to evolve. Part of the thing about a platform play is that it’s up to third parties to decide how they’re going to utilize these tools. We don’t have a crystal ball to see where this is going to head in two years. We do know that users increasingly need a way to navigate 16 million tracks in a catalog. It’s a daunting thing to face, as a user.

So we think curation and editorialization is going to be a big part of this. We also think that artists and labels are going to want to have their own presence on the platform. This is just a very attractive place for people to be, but we can’t pretend to know how it’s going to evolve. We’re as excited as everybody else to see where it all heads. That’s pretty much the opposite of what I heard from Rhapsody earlier this week. They said, ‘Well, we think we design a better interface than anybody else can for our stuff.’

Parks: We think that we’ve done a couple of things really well, but primarily, we’ve made all of the music in the world available in a fraction of a second, in a deeply-socially-integrated way — and we’ve made that available for free, as a way for people to move away from piracy in a way that doesn’t cost them anything. We think we’ve accomplished that really well. We know what we’re good at. We also know what we’re not so great at, and that is all these other things. But we do know we can create a set of tools using our technology and platform, that enable third parties who those great things to come in, and we’ll provide the soundtrack to whatever they’re doing. We think that’s probably the best strategy for us to pursue right now. Changing gears, I’ve come to the conclusion that we need a dashboard API for at least pause, fast-forward, play, rewind, and next playlist, so that Spotify, Pandora, MOG, and every other service doesn’t have to go to try and integrate with each car company, and then each car model, and then wait two or three years for that to show up in the dashboard. Does that sound good to you? Spotify’s big enough that I feel like it might be able to pressure, or talk to enough car companies to make something like that happen. Am I nuts? Does that sound like a possibility?

Parks: Uh, you might be nuts, but I don’t know if that’s the reason why you’re nuts. (laughs)

Parks: Probably not crazier than I am. But that sounds like a great world. We are talking to all the car companies. We think the key to our model is ubiquity, and certainly the car is a very important place to be. We have a good discussion with the automotive and consumer electronics industries to try to create these kinds of standards so these things can proliferate. We know one thing for sure: At scale, this is going to take this [music] industry from the size it is today and make it larger — multiples of this size within ten years. And that’s ultimately our goal. But I think you’re right.