@ashleyrcarman: Spotify will use everything it knows about you to target podcast ads

[Editor Charlie sez:  We often talk about how Big Tech uses our music as a data honeypot that allows platforms to learn all kinds of psychographic data about us.  In fact, Spotify playlists are in buckets based on psychographic segmentation for this very purpose.  Now we see what they do with all this data scraping. Spotify is tying your data it tracked scraped from its music streaming dominance to gain an advantage selling a tied product. Spotify uses the artist’s music as a honeypot to track and scrape your data to boost tracking and scraping your data from the podcast honeypot.]

Spotify is going to start using its copious amounts of user data to run targeted ads inside its exclusive podcasts. Targeted advertising remains new ground for podcasts, and the announcement sets Spotify up to potentially branch out beyond its own shows and begin placing ads in other networks’ content. If it catches on, Spotify could become a full-blown podcast ad network.

With technology it’s calling Streaming Ad Insertion, Spotify says it’ll begin inserting ads into its shows in real-time, based on what it knows about its users, like where they’re located, what type of device they use, and their age, similarly to how the broader web operates. Spotify already automates dynamic ad insertion on the music side of its business, it’s now expanding and improving that tech for podcasts.

Read the post on The Verge

@waltmossberg Pans Spotify’s Data Scraping Using Podcasts as Privacy Invading Honeypot #irespectmusic

“This planned violation of privacy by Spotify is a huge reason to stick with @Applefor podcasts. Ads in podcasts are fine with me, and I’ve even bought products advertised on some of my favorite shows. Ads based on vacuuming up my private info aren’t OK.”

Is Streaming a New Shadow Economy?

…there was lunch in the larger, first floor cafeteria where, in the corner, on a small stage there was a man, playing a guitar, who looked like an aging singer-songwriter Mae’s parents listened to.

“Is that….?”

“It is,” Annie said, not breaking her stride.  “There’s someone every day.   Musicians, comedians, writers….We book them a year ahead.  We have to fight them off.”

The singer-songwriter was signing passionately…but the vast majority of the cafeteria was paying little to no attention.

“I can’t imagine the budget for that, ” Mae said.

“Oh god, we don’t pay them.”

The Circle, by Dave Eggers

The New York Times teased their reporting today by Andy Newman on “canning” entitled “Making ends meet, five cents at a time.”

In New York City, a shadow economy has sprouted up around recyclable bottles and cans. Dionisia Rivera, above, sells the items she collects on the Upper East Side.

Our reporter takes you inside the world of “canning,” which provides a lifeline to thousands as stable low-skill jobs disappear in the city.

“Five cents a time”?  Really?  That’s at least 10x more than a Spotify stream.  Maybe we’re in the wrong business.  In fact, maybe we should be in the business of canning at Spotify’s palatial offices in the World Trade Center.

It’s kind of amazing that Spotify doesn’t have “Cans for Musicians” as part of their extensive recycling program.  You know, help them musos get their side hustle on.

It may be the only thing green about streaming.

Photo by Andrew Seng for the New York Times

@variety: New Netflix Original to Tell the Story of Spotify’s Creation

Variety reports that the Spotify corpcomms book “Spotify Untold” is getting an order from Netflix for a series telling the story of Spotify’s “creation” featuring–guess who?  The levitational awesomeness of Daniel Ek.  No word on who will play David Lowery, Melissa Ferrick, Bob Gaudio or Brownlee Ferguson.  So Netflix–which screws songwriters–is promoting Spotify–which also screws songwriters.  And joins into Spotify’s lawfare campaign against Apple.

Perfect.

According to Variety, it’s not a question of astroturf writ large, it’s “a case of one disrupter [Netflix] telling the story of another [Spotify], Netflix has boarded a series about the creation of Spotify, the Swedish startup that’s become one of the world’s leading music services.”

So where’s what’s not mentioned in the Variety story on the Netflix deal is the Bergman-esque cheap shot at Apple the “authors” of “Spotify Untold” take at Steve Jobs on his death bed.  This one is just bizarre and is the kind of thing you could imagine oozing from the mind of Daniel Ek.  Maybe instead he should have been styled in a badminton game with Jobs.  (I drill down on the loose ends in this storyin another post.)

As reported in an earlier story about the book in Variety:

Barely a page into the book “Spotify Untold,” Swedish authors Jonas Leijonhufvud (pictured at left) and Sven Carlsson paint an odd scene. The year is 2010 and Spotify co-founder and CEO Daniel Ek is facing a succession of obstacles gaining entry into the U.S. market — or, more specifically, infiltrating the tightly-networked and often nepotistic to a fault music industry. As stress sets in, Ek becomes convinced that Apple’s Steve Jobs is calling his phone just to breathe deeply on the other end of the line, he purportedly confesses to a colleague.

Which aspect of this story got them a Netflix deal?  Was it the heavy breathing?  Or maybe the corporate funding.

There’s a saying, “don’t speak ill of the dead.”  That’s probably a bit superstitious for the Spotify Untold authors, but is good advice.  It’s unbecoming and Spotify should denounce it.  There’s also a saying, “don’t mock the afflicted,” so before you laugh hysterically at the story, realize that Steve Jobs caring enough about Daniel Ek to do such a thing (which assumes Steve knew Daniel Ek existed) was something that was very important to Daniel Ek

One thing I can tell you is that the Steve legend (a competing hero’s journey myth–a real one) has some choice tales of voice mails.  None of them involved heavy breathing, and Variety reports that the authors were not able to confirm this rather insulting and perverse allegation.

So why bring it up in their book or in press interviews?

@kingthor: Personalization Has Failed Us

Behind every “you might also like” recommendation is an algorithm built on data you’ve provided. This includes the obvious stuff, like your viewing or listening history, but it may also factor in your age, location or gender. These algorithms are all a little different.  Spotify builds its recommendations by logging what you listen to, funneling that through a genre classification system, then pulling in songs from playlists from other users with similar tastes.

Spotify’s complicated algorithm struggles to push the boundaries of your own habits. Listen to a track from Nine Inch Nails and you’ll get more Nine Inch Nails on your algorithm-generated Discover Weekly playlist. Maybe it’ll toss in something similar sounding, but it’s just as likely to throw in a random pop song from the ’90s. If you go too off course and listen to a jazz playlist followed by some metal, the whole thing breaks down and you’re served up a nonsensical playlist for a week. Even in the best-case scenario, the experience is transactional, and without the thrill of self-discovery — part of the appeal of seeking out new media — the recommendations feel cold.

Read the post on the New York Times Privacy Project

@musictechsolve: Is Spotify Stock Quietly Tanking?

UPDATE:  This post originally appeared on 9/24 in MusicTech.Solutions before reading that on 9/23 Wells Fargo initiated coverage of Spotify at “Underperform” with a $115 price target.  (The stock touched $115 during the trading day on 9/24).  As of this writing, the consensus price target is $159 according to NASDAQ’s Marketbeat.  And of course, streaming’s massive consumption of electricity is becoming an issue faster than you can say “data center.”

Analyst Mark Hake has developed three different scenarios for where Spotify’s stock price will be in 2021:  $125.68, $61.42 and $38.39.  He assigns a $114.89 price based on a probability analysis.  About where it is at the close today, in other words.  His post in Seeking Alpha (“Spotify Has A Valuation Problem”) is a must read if you’re interested in financial analysis.  (I predicted about a year ago the stock would retrace to the $120 to $130 range before dropping below $100 and that it would happen sooner than later.)

As analyst BNK Invest noted after the close last Friday (9/20):

In trading on Friday, shares of Spotify Technology SA (Symbol: SPOT) entered into oversold territory, hitting an RSI reading of 26.8, after changing hands as low as $120.63 per share. By comparison, the current RSI reading of the S&P 500 ETF (SPY) is 56.4. A bullish investor could look at SPOT’s 26.8 RSI reading today as a sign that the recent heavy selling is in the process of exhausting itself, and begin to look for entry point opportunities on the buy side.

This chart is from today’s trading and it reveals a couple interesting patterns–they may mean nothing, but then again they might.  It’s not so much that Spotify is now trading about $20 below its self-assigned private company valuation of $135.  That’s not a comfortable feeling as it says that investors would have been $20 a share better off if the company had never had its controversial direct public offering (or “DPO”) and just stayed private.

Spot 9-24
Intraday Trading on 9/24/19 Only

What’s interesting about this chart is not so much the price but rather the volume.  Spotify is a very thinly traded stock that typically has relatively low volume.  When you see larger volume around the opening and the close of trading it may indicate certain motivations of sellers.  Particularly if there are holders of large blocks of shares that want to slip out of their position when nobody is (a) noticing or (b) can do much about it.

Because of the nature and “rules” of the DPO, Spotify doesn’t have the typical underwriting syndicate that helps to keep the price somewhat stable to allow the stock to establish a trading range with support levels.  Instead of the underwriters selling to the public, Spotify insiders are selling their shares to the public, which then of course can be resold.  In an underwritten public offering, insider shares are usually subject to a “lock up” period where insiders cannot sell their shares for a period of time, say 90 to 180 days after the first public offering.

Spotify had no lock up on insiders.  So who has an incentive to sell their shares relatively quickly?

It’s hard to know who is doing the selling unless you’re a transfer agent with access to the master shareholder list, and they probably wouldn’t disclose that information for anyone under certain thresholds.  But it is odd and it’s been similar patterns for a week or so.

Spot 5 days 924

@musictechpolicy Podcast: Eight Mile Style Sues Spotify Under Music Modernization Act — Music Technology Policy

Chris Castle discussion of Eight Mile Style lawsuit against Spotify under Music Modernization Act (driving with dogs series, a One Take Wonder Production)

Eight Mile Style v. Spotify Complaint