There isn’t much about Spotify‘s explosive growth over the past ten years that Sachin Doshi can’t tell you about in great detail.
Doshi was working in business development at Universal Music Group in New York in early 2008, when Daniel Ek left him with an early demo of the platform.
As Doshi explains on this Music Business Worldwide Podcast (supported by Voly Music): “Both from a pure concept perspective, and the execution that Spotify was bringing to the market, I genuinely believed it would scale… I was pitching internally at Universal this idea that music subscription should become a household utility, like cable.”
He was right, of course: now, 13 years on, there are over 500 million paying subscribers to music streaming services worldwide.
Doshi was such a Spotify acolyte that he not only played a key role in the service’s launch in the US in 2011 while working at Universal Music Group – he then left UMG to join Daniel Ek’s company as Spotify’s VP of Content towards the end of that year.
Doshi eventually departed Spotify in 2016 to co-found the ad-free news subscription app, Scroll, which grew to the point it was acquired by Twitter last year (2021).
This month (January 2022), Doshi was unveiled as the new Chief Content Officer (CCO) at Podimo, a Denmark-based podcast and audiobook subscription platform that competes with other providers such as Spotify, Apple, and Luminary.
Podimo has been making serious moves in this fast-growing space, including a raise of $78 million in a Series B round last year.
On this podcast, MBW quizzes Doshi about the rise of Spotify, the stagnation of music streaming pricing, the potential of Podimo to rival some of the world’s biggest tech companies – and whether the music business should be scared of the rapid growth in podcasting’s global reach.
He also has some killer advice for entrepreneurs – whether in music or otherwise – who have a great idea they’re keen to scale.
Take a listen to MBW’s podcast interview with Sachin Doshi above, and/or read an abridged transcript of our discussion below.
At the end of 2011, Spotify had 15 million active users worldwide and 4 million brave souls were pioneering enough to actually pay for it. That was the year you joined Daniel Ek’s company. Did you have any idea how massive the potential was for Spotify at that time?
It’s easy for me to say yes now! But I sincerely believe I did. I was a subscription evangelist even before Spotify came around. Since the days of Rhapsody, I thought that the second the [music] medium moved to bits, effectively, that subscription was the natural model for it, especially at that time.
The second side of that was Daniel [Ek] and Nicholas had come in, when I was at Universal, in late 2007. And in early 2008, they left me with a demo of the product.
“I was pitching internally at Universal this idea that music subscription should be like a household utility, like cable – that every household should have a music subscription.”
It felt like a fairly significant leap forward, both from a concept perspective, and then the execution that Spotify was bringing to the market – I genuinely believed it would scale.
I was pitching internally at Universal this idea that music subscription should be like a household utility, like cable – that every household should have a music subscription. I believed in it from the beginning, and I’m gratified to see it [now]. At least I was right about something in my life!
You helped lead the launch of the Spotify in the US in 2011 from the Universal side, and then obviously joined Spotify that same year. amazingly when you look back at that period, Spotify kind of saw off this challenge from Apple Music; it remains the global market leader as we stand today. What do you think the key ingredients were in Spotify being able to outstrip the might of even Apple for such a sustained period in music?
There’s a lot of factors. Being in the market and establishing a brand before Apple had a chance to really aggressively enter the [music streaming] space was hugely valuable. Spotify had become synonymous with music subscription, and with music streaming, by the time Apple Music launched.
“Spotify had become synonymous with music subscription, and with music streaming, by the time Apple Music launched.
Also Spotify just has a better product. On some level, it’s just [down to] execution: the product is better, it’s more widely available, meaning it’s accessible across more platforms. And I think they’ve just constantly out-executed [Apple].
I have friends at Apple so this isn’t like to say that they’re not [good], it’s just a different ballgame when this is existential for you [like for Spotify] versus a side revenue play.
Podimo is a subscription platform doing battle with other standalone subscription podcast apps, as well as Spotify itself. Why are you confident that a subscription-based podcast app can work in a market where podcast listeners have grown used to getting their favorite podcast for free?
To some extent, the through-line of the last 10 to 15 years of my career has been answering that question: how do you how do you get people to pay for an experience they’ve gotten used to getting for free, because you think that, actually, paying for it is going to be beneficial to everybody involved in the long run – both creators and consumers?
Part of the rationale in terms of what Podimo has been able to build today is to really focus on markets where ‘free’ [ad-supported models] already has some challenges. It’s really focused [to date] on markets that the [podcasting ad] business isn’t that strong.
“To some extent, the through-line of the last 10 to 15 years of my career has been answering that question: how do you how do you get people to pay for an experience they’ve gotten used to getting for free”
It’s one thing to say people have gotten accustomed to listening for free, but that’s not supporting a strong podcaster and creator community. It’s not easy in Denmark, in Spain and Norway, etc. to really generate significant revenue [as a podcaster], even with a large audience, from the ad-supported business.
That was part of the mission right out the gate. In lot of these markets, not all of them, there is a willingness to pay for media experiences that are unique and different – [that’s true] even in some cases in the US. Starting from that perspective makes it a lot easier to imagine why a subscription version of this makes sense for everybody involved.
There’s a lot of talk about price points in the music industry at the moment, because we’ve just seen Netflix raise its subscription price in the States. Are you surprised that the price of Spotify at that classic $9.99 per month price point has resolutely stayed put?
You’re asking this question at a moment of inflation panic in the US and maybe everywhere. One obvious reason music pricing hasn’t increased is the way that the business is structured.
I know this is sort of verboten, but the labels effectively dictate pricing by setting the rates – the subscriber wholesale rates – that they do.
“If I’m Spotify, I’m going to reject raising my price to $12.99, unless I’m sure that Apple and Amazon and whoever are effectively being forced to do it at the same time.”
To be able to raise the price is tricky, because the labels need to find a way, if they want to raise it, to work with every platform to do it effectively at once.
If I’m Spotify, I’m going to reject raising my price to $12.99, unless I’m sure that Apple and Amazon and whoever are effectively being forced to do it at the same time. Those negotiating and market dynamics have been one of the key reasons why it’s been hard for the price to raise.
Last question: We’ve reported a lot about how podcasts are eating into music streaming’s ‘share of ear’: the amount of hours we spend listening to different types of content on these services. Do you think that’s a threat to the music industry in any way?
No I don’t. Yes, music streaming has exploded in terms of time spent, but you [have to question] what’s the engagement within that listening?
I think part of the reason [music streaming] exploded is because the product, Spotify, has done such a good job of driving streams in the background that you probably wouldn’t have listened to otherwise. It’s very different than putting a CD in the player, or taking your iPod out of the pocket and hitting play on a playlist.
But are you getting linearly more value out of [listening to] all of those [passive] streams? I would say no.
“Spotify has done such a good job of driving streams in the background that you probably wouldn’t have listened to otherwise.”
So if non-music audio listening – podcasts, audio books, whatever – eats into some of that more passive music listening, I don’t think that really hurts the value of music, because I don’t think the value of music has increased commensurately with the amount of listening.
So much of [music] listening [today] is just driven by product features, rather than, ‘I actually wanted to listen to these 100 more songs every month’.
