Spotifty Changes

Neil Young is back!

You may have missed yesterday's Joe Rogan story:

"Joe Rogan Says He Will Quit If Podcast Becomes Place Where He Has to Walk On Eggshells": https://bit.ly/3LNQUlt

This is a result of the Young deal. There was a Zoom call with Daniel Ek, Young and Rogan wherein Ek told Rogan to cool it. You see Ek realizes his bread and butter is music, and that without music there is no Spotify. You have to know which side your bread is buttered on, and Ek finally got the message.

So Neil Young will be back this weekend, but here's the next surprise: his music will be in hi-def! Not Atmos, Young thinks that is b.s., but Young's songs will stream in beyond CD quality. Spotify has been behind on high definition audio, and this is a way for them to catch up. I've heard that Young has secretly been recording a track with David Crosby for release when he comes back to Spotify, but I'm not sure that's true. Yes, Young decided to bury the hatchet with everybody, and by recording with Crosby, he believes his image will be enhanced and...Live Nation and AEG are fighting over the CSNY reunion tour. No, it is not happening soon enough to be a benefit for Ukraine, but there will be a charity component, since Crosby's involved it's going to be opioid related. As for the tour, it's the end of the summer. The website will be up at the same time as Young's music on Spotify, so register early if you want tickets, there's going to be a lottery, a la the Grateful Dead. Only if you're registered will your letter be accepted. I know, it's complicated, but the belief is it's scalper proof, but I won't go into the details.

As for Ek... He's making further moves to solidify Spotify's position with the music community. He's appointed Tom Gray as an advisor. Not David Lowery, just Tom Gray. And Ek plans to also bring on éminence grise Doug Morris too. Daniel wants to build good will, and by courting the naysayers, he believes he will achieve this.

Ek is also going to stop challenging copyright payment amounts for songwriters. And, he's going to increase their payments. And, he's going to take it out of Spotify's end. Wall Street analysts are apoplectic, with Spotify's margins so thin to begin with, but Ek said without songwriters there is no music, and writers need to be compensated.

As for increasing the payment per stream, that is not going to happen. Giving more money to songwriters was enough, Ek doesn't want to bankrupt the company. So, if you don't have a hit, you still ain't gonna make s__t.

But there is the new bonus pool. For certain markers you get an additional payment. These start at ten million streams and go up to a billion. Because if you don't have ten million streams, you're not really in the recording business, even though you might think you are. This is addressing the wannabe problem. Just like Amazon no longer hosts all films for purchase, Spotify is closing the door on access. This is how it's going to work: you can put your track on Spotify, but if you don't have 10,000 streams in a month, your song is removed. So now "artists" will think twice about throwing up any old ditty, they'll work harder on each tune, at least that's the theory. And, if a song was taken down, it can never go back up, unless it reaches ten million views on TikTok.

That's right, at first Spotify was tied in with Facebook, but after that heinous story yesterday...did you see it?

"Facebook paid GOP firm to malign TikTok - The firm, Targeted Victory, pushed local operatives across the country to boost messages calling TikTok a threat to American children. 'Dream would be to get stories with headlines like "From dances to danger," ' one campaign director said.": https://wapo.st/3qRBwfs

Spotify gets enough bad press, they don't want to be dragged down by Zuckerberg, who is flailing. Belief is "Meta" ain't gonna make it, virtual reality is not going to become a big thing soon, and the metaverse will be controlled by the crypto crowd, buying land in cyberspace. Yes, Zuckerberg was late, a crime in technology, he's been disrupted, karma's a bitch!

As for TikTok... Spotify is going to buy ten percent to draw heat away from the Chinese company.

And there will be synergies. Now the top TikTok tracks playlist will be featured on Spotify's homepage, permanently. TikTok delivers hits, and Spotify wants those hits streamed. Right now, they're talking exclusives, but Lucian Grainge is up in arms. Then again, how much power does the conventional record business have anymore, many of these TikTok tracks are originals. As for Apple and Amazon, are they really in the music business or is it just an afterthought? Like I said above, Ek wants to send the message that Spotify is a music company, and unlike Zuckerberg he's not going to change the name of the company to try to distract the public from the truth. Yes, Ek is owning the bad publicity and dealing with it, as opposed to obfuscating.

But the truth is all the money is now in live. Did you see Jay Penske, featured in last Sunday's "New York Times"?:

"You Don't Know Much About Jay Penske. And He's Fine With That. - A quiet Hollywood power broker with a famous name goes on a buying spree that has given him Rolling Stone, South by Southwest and a private island. What more does he want?": https://nyti.ms/3iTVUbE

Ek is not going to buy ancient individual assets, he's going straight to the source. That's right, Spotify is buying AEG Live, from Phil Anschutz. It's an all cash deal, it's not quite the number Phil wanted, but time is going by and Phil ain't gonna live forever and he's always thought the live events business was too risky, with concert promoters putting up all the money.

In truth, at first Daniel was negotiating with Irving Azoff and Tim Leiweke re the Oak View Group, but Ek wanted critical mass now. Also in truth, Oak View Group is going to be bought by Ek's AEG Live down the road anyway. That's the plan. I mean how many times has Irving Azoff sold the same assets? And what a victory lap it would be for Leiweke to be back in charge of AEG. Well, AEG Live, as for the rest of the operation, that's too big a pill for Spotify to swallow, and like I said, Ek's all about the music.

No one foresees any antitrust issues, there is no barrier to entry by third parties. And, Spotify is a great competitor to Ticketmaster re tickets. Yes, you're going to be able to buy your ducats directly from Spotify. And if you're not on Spotify, you're going to the back of the line. And all tickets will be digital, Spotify is fighting the scalpers, the company has no legacy relationships with them.

So this is quite a lot of change. Steps in the right direction. There will still be naysayers, but Daniel Ek has addressed everyone's concerns except for those living in the past, who still believe in the old model, that they should be entitled to make a living making music. More people are making more money via Spotify payouts, but a line has to be drawn somewhere. And streaming won. As for vinyl, Spotify ain't taking that step. Yes, Ek was planning to purchase presses, he's been advised by Jack White, and open physical stores to sell them, just like Warby Parker, having a storefront for your virtual business is the new thing, but then Amazon pulled back from retail and Ek cashiered his vinyl/retail plans. You see a techie is not beholden to the past, he (or she!) only looks to the future!

There are more ideas brewing, like a VC fund for acts, but Ek doesn't want to bite off more than he can chew, especially since Spotify is short-handed since contrary to conventional wisdom, Sweden was devastated by its Covid policies:

"Did Sweden beat the pandemic by refusing to lock down? No, its record is disastrous": https://lat.ms/373zamG

So other plans are on the back burner.

But for now, there's this Neil Young deal, which is consumer-facing. There'll be further changes down the pike, since Daniel Ek knows you evolve or you die, unlike the record companies, trading on their legacy assets, doing a piss-poor job on new music.

Spotify's changes may not impress you, but they will impress the majority of people, and the acquisition of AEG Live has Wall Street salivating, so...

The future's so bright I gotta wear shades!

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