The latest news from the music and tech industries
Hi there -
It looks like pressure is about to mount on Spotify with the news that activist investor ValueAct Capital Management has come on board.
If ever an investment vehicle was aptly named, it's these guys, who are known for pushing businesses they invest in to cut overheads and drive up prices where possible.
In Spotify's case the former is arguable underway with workforce layoffs in line with the broader tech sector. On the latter point however, the company remains perplexingly resistant to price increases, despite most competitors (arguably all the ones of note) having raised prices worldwide already.
I'm not sure why Spotify haven't yet made this move, and searching around I was unable to find any comment defending this position from either Daniel Ek or any other C-tier exec.
One thing is for sure though: if their latest investment partner has its way, that will be changing, and soon.
Have a great evening,
D.
🎶 dedicating this issue to the Dave Jolicoeur, aka Trugoy The Dove, who passed away over the weekend. I think we've had untold reminders in recent times as to just how cruel life can be, and this is sadly the latest example.
With all De La Soul's back catalogue on the cusp of reissue, it is painfully tragic that Dave won't now be there to see them finally get their moment in the sun, as they've long deserved. I was so excited to have MU work on these reissues, and not because it meant Three Feet High & Rising would finally get unlocked for kids to enjoy. For me, the real gem in the pack is the album Buhloone Mindstate.
Arguably the most slept-on De La gem, it saw numerous tracks take a more introspective tone. Nowhere is this better exemplified than on the phenomenal "I Am I Be". If you've never heard it before, I envy you the sheer joy of hearing it now.
"It's just mind over matter And what matters is That the mind isn't guided by the punished shade I keep the walking on the right side But I won't judge the next who handles walking on the wrong"
Anyway, Spotify now has one of those: ValueAct Capital Management, and according to the Financial Times it’s the first time an activist investor has publicly taken a stake in the streaming service. The company’s CEO praised Spotify but hinted that cutting costs is what it will be lobbying for. “Spotify’s superpower was combining engineering breakthroughs with organisational abilities — it organised creators and copyright owners to build an entirely new economic model that benefited everyone involved,” said Mason Morfit in a speech on Friday.
👆🏻Hot take: keen to see if this will push Spotify to raise prices. TBH I am still baffled why this is even a debatable topic; it should have happened a long time ago.
Three, and this is a biggie: “Regardless of user gender, music streaming platforms appear to predominantly recommend white male artists to users at a significant rate,” claims the report. It notes that a “low share of music by female artists, both on platforms and in the industry more widely, and music critics’ recommendations” are also factors here, and points to some studies showing that “recommendation systems may increase the number of women’s songs listened to” (our italics).
👆🏻Hot take: if you read the whole piece it isn't all as bad as this final point - but I'd argue that final point is pretty damning and should prompt DSPs to review their algorithms.
"This threatens the entire music economy. I think that is pretty clear,” he told a meeting of the Association of Independent Music Publishers (AIMP) according to Billboard, which reported his speech. And yet Israelite also offered a warmer take on what creative AIs could mean for songwriters and the industry which moved away from the ‘threatens’ rhetoric. “I don’t have many answers for you today, other than what I’m hoping is that as an industry, we approach these AI issues with the mindset of this is not necessarily bad. It doesn’t matter anyway, because we’re not going to control it,” he said.
👆🏻Hot take: I found it quite refreshing to see this more pragmatic take on AI.
Alliance Entertainment is set to become a public company, listed on the Nasdaq Capital Market, after completing its merger with blank check company, Adara Acquisition, on Friday (February 10). The US-based distributor and wholesaler of music, movies, video games, electronics, arcades and collectibles, said Chairman Bruce Ogilvie and CEO Jeff Walker will continue to lead the combined entity following the merger. The merger valued Alliance at $480 million.
👆🏻Hot take: I find these types of mergers rather hard to understand. It strikes me that this simply opens up a lot more capital for Alliance, right?
“The Super Bowl halftime show is probably the most valuable 12 minutes of media in the world,” says Myhren. “What we wanted to do is take that 12 minutes and stretch it out into many weeks in terms of the excitement around it. And clearly, in Rihanna, we had the perfect partner.”
👆🏻Hot take: a good summary of Apple's sponsorship of the halftime show.
Some insiders speculate that Rogan could choose not to renew his deal when it ends later this year and go independent or sign with another audio company. His ties to the company have frayed: Courtney Holt, the executive who recruited Rogan, is no longer with Spotify. And although he reportedly has a strong clause in his contract protecting his ability to say whatever he wants, Rogan said publicly that the vaccine comments nearly prompted the company to end their relationship.
👆🏻Hot take: a fine summary of how Spotify's podcasting strategy came unstuck. Could they lose Rogan soon too? I'd imagine shareholders hope not.
Fast-forward to January, and Neeva formally launched NeevaAI to the U.S. market, pitched as “authentic, real-time AI search.” While it was technically possible for users around the globe to access NeevaAI before now, it required a little jiggery-pokery in the account settings, involving changing language and location preferences. Today, however, NeevaAI is officially rolling out internationally to logged-in users, including Canada, the U.K., Germany, France, and Spain. Additionally, the Neeva search engine itself (not NeevaAI) will be rolling out to Australia and New Zealand.
👆🏻Hot take: another AI contender enters the search engine market. A quick tests already shows it to be preferable to Google for me - worth a look. Telling just how different/better results are, too.
The full report offers plenty of ammunition for those on all sides of the piracy debate. For the optimistic, roughly three-quarters of the most dedicated consumers of content in all categories never pirate anything. Of the remainder, the majority are buying something, meaning they can be encouraged to buy more. Even the estimates relating to fewer content categories aren’t that bad. When 61% of consumers exclusively use legal content and 39% are reported as having obtained pirated content once or more, that doesn’t mean 39% pirate everything.
👆🏻Hot take: as the report suggests, there's potentially ammo for both sides of the piracy debate here. Interesting to see updated insights on this though.
“Liquid” neural nets, based on a worm’s nervous system, can transform their underlying algorithms on the fly, giving them unprecedented speed and adaptability.
👆🏻Hot take: both fascinating and terrifying in equal measure.
When I die, I’ll be buried in a casket made from melted Quo records
👆🏻Hot take: I think it's easy to sneer at this because it is Status Quo being talked about and not, say, Harry Styles, but actually this is a fine love letter to fandom and what it is to truly love your band of choice.