How The Playlist got it wrong

Just finished watching The Playlist, i.e. Netflix's miniseries about Spotify and it stirs emotions in a Swedish veteran music streaming entrepreneur like myself.

I liked the first episodes and even if some things felt a bit twisted, I liked the feeling. For example, I liked the geekery around the buffering time, I still remember the huge wow feeling it was when I tested Spotify for the first time and the streaming started immediately (yes or even within 0.2 s) huge difference from the 1-3 seconds we were on. We, who for a time (around 2001-2003) were among the largest audio streaming players in the world (perhaps mostly because the competition looked a little different), did not spend much time at all on reducing buffering, it was what it was and not much we could do about it...

This particular laser-sharp focus was and is enormously impressive. I had some conversations with Daniel Ek around 2007-2008ish and I remember wondering if they wouldn't build in social functionality and build a sense of community since music is the world's best social object. No, it was not relevant at all (then) "We will build the world's best music player, all the focus is on that"

The laser-sharp focus was and is enormously impressive.

Other things I remember being very impressed with was how they built hype. To begin with, they didn't talk to a single journalist for years (as I recall anyway) and that created a huge buzz (although at the time I probably did a lot to not seem so impressed).

One thing I wasn't particularly impressed with, however, was how they handled music rights and what levels of terms they ended up getting. What many people don't know is that record companies' rights are weaker in most Copyright Acts than songwriters' and for that reason we paid, for example, 12% to STIM (Swedish collecting society for songwriters) and often about 10% to IFPI (which represents the music companies). It can be compared to how it looks for Spotify, which I understand is about 10% to songwriters and about 55-60% to record companies.

That's one of the reasons why I'm surprised that 14 years after Spotify was launched, we're still pointing out Spotify as the bad guys and that they don't pay enough to the rights holders. For one thing, you need to keep in mind what an enormous comeback the music industry has made precisely thanks to Spotify:

• In 2002, music sales in Sweden had a turnover of SEK 1.8 billion.
• In 2008, i.e. the same year that Spotify launched, sales plummeted due to illegal downloading and were at just under SEK 800 million.
• In 2021, the market was once again back at 1.8 billion in Sweden and audio streaming accounts for 86% of this.

On a global scale the above also holds true.

What many also don't understand (but which was brought up in a short sequence in the series when Daniel Ek scolds Per Sundin in the last episode) is that the reason why some artists get low compensation is because the contracts they have with the music companies are too damn rotten. At the beginning around 2010, it was even the case that the music companies often had a clause in their artist contracts that royalties only applied to sales of CDs and not digital sales.

So for these reasons it is surprising that we have not come further and that more (artists) have not approached the music companies. But the problem probably is that artists don't dare to bite the hand that feeds them and then they direct their anger elsewhere (i.e. at Spotify). I also have to continue to say that I think it's extremely lousy of the music companies not to stand up more for Spotify in these situations given that they have saved the industry.

It's extremely lousy of the music companies not to stand up more for Spotify given that they have saved the industry.

So in conclusion, sad and downright wrong angle in The Playlist and outright character assassination of Daniel Ek, one of the absolute best entrepreneurs we've had in this country. Especially sad as this series is probably the only image of Daniel Ek most people will have given how few interviews he has done in the media.

PS 1: It was EMI (acquired by Universal in 2012) that first signed an agreement with Spotify, the CEO in the Nordics was the very forward-looking Stefan Blom , who was later recruited to Spotify's management.

PS 2: That Sophia Bendz in the series is portrayed as a party fixer feels, to put it mildly, very tiring and sad...

PS 3: Speaking of the music companies deserving so much more criticism not least from their artists is the fact that thanks to their artists they had the negotiating position that eventually got them shares in Spotify (if they got them for free or if they paid at market valuation). Today, as far as I know, both Universal and Sony remain on the ownership side, while Warner sold their stake for around 500 MUSD a few years ago. How much of this value do you think goes back to the artists?

Both Universal and Sony remain on the ownership side, while Warner sold their stake for around 500 MUSD a few years ago. How much of this value do you think goes back to the artists?

PS 4: Per Sundin deserves credit for being out spoken and rather transparent with his and the companies he represented views, along the way.