It’s always worth reading the transcripts from Spotify’s analyst calls if you want to get a picture of the true insanity they have in store for all of us. It’s clear that Daniel Ek has focused on being in the “audio opportunity” (whatever the hell that is). Kind of like being in the “water” space, I guess.
But think about what that actually means. Ek has commoditized music already in his monopoly music streaming platform–but music is just part of the “audio” space, don’t you know. And since he’s telling a growth story to Wall Street (the geniuses who brought you the subprime mortgage disaster, quantitative easing and the dot bomb bubble, just to name a few highlights), how’s he going to grow the “audio” space?
That’s right. Audiobooks.
Ek intends to apply the lessons he’s learned about how to screw over artists and songwriters to book authors. How do we know? Because he told us this week (Feb. 2, 2022) on his earnings call.
Audiobooks in our view is a subset of the overall audio opportunity, but obviously, it touches a very important creator group which is authors. So we’re very excited about that opportunity. And long-term, I think you can look at markets like China, for instance, to look at just the innovation that’s happening in audiobooks there. For me it’s strange to imagine why not more of that type of innovation have come to many of the Western markets as well.https://news.alphastreet.com/spotify-technology-sa-spot-q4-2021-earnings-call-transcript/
What lessons does Ek want us to learn from China and that “innovation”? He’s not talking about innovative ways for authors to sustain themselves, he’s talking about innovative ways for Spotify to make bank by “innovating” how books are sold. Books are, you see, just another part of the audio opportunity. Let’s see what his partner Tencent, the government surveillance “company” is doing in China with audiobooks.
Tencent recently acquired Lazy Audio, a Mandarin audiobook company which sells audiobooks on a pay-per-title basis, but also subscriptions and–wait for it–advertising. Because books, like lyrics, have a lot of words or as they are known in Silicon Valley, keywords.
And once you know the keywords that attract people you can serve them more targeted ads with your algorithms. Because that’s why authors use those keywords to create those audio opportunities.
And don’t forget Ek’s Law, derived from Moore’s Law. Every 18 months royalties are cut in half.