Until Spotify disrupted the music ownership model, the music industry was under siege from piracy. Now revenues are growing again, and the landscape has changed for both artists and fans. Clarissa Dann reports on how the Swedish audio media phenomenon has applied its corporate treasury infrastructure to support this incredible growth story
“For a start, you can throw out all those CDs that are taking up that shelf space,” said Daughter Number Two. “Nobody listens to music that way anymore.” She then proceeded to download an app onto my phone in the form of a green blob with soundwaves, and quickly demonstrated with carefully chosen samples that my entire music collection – from David Bowie, Pink Floyd and Dido through to the complete set of the Monteverdi Choir’s Bach Cantatas (in church year order) – could be Bluetoothed across from my iPhone to a portable speaker.
In fact, it was annoyingly easy to get going, and I have never looked back. Nor, it would appear, have 100 million other paid subscribers of this Swedish audio streaming platform that provides digital rights management-protected music and podcasts from record labels and media companies where almost 70% of revenues are paid back to the music industry in royalties.
The Spotify story was one of the main points on the agenda at a recent Global Treasury Leaders Summit staged by The Economist Events; part of a treasury engagement programme supported by Deutsche Bank that won a World Media Award. Presenting at the event, Spotify’s new Treasurer, Patrik Hallerström, shared with delegates how enabling innovation and adapting technology in small steps supported Spotify’s rapid growth from its formation in 2006 through to its listing on the NYSE in April 2018, and onwards to the €5.98bn revenues reported for 2018. Before he joined Spotify, Hallerström had spent 15 years in various positions in treasury departments in the manufacturing and telecoms industry. It was the perfect preparation for navigating this particular industry disrupter.
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