← The Digital Executive
Loading summary
Transcript16 lines
- [00:00]
A
Foreign.
- [00:09]
B
Welcome to Coruscant Technologies, home of the Digital Executive Podcast. Do you work in emerging tech? Working on something innovative? Maybe an entrepreneur apply to be a guest at www.corazon.com brand welcome to the Digital Executive. Today's guest is Ola Sars. Ola Sars is a Stockholm based serial music tech entrepreneur and 2024 Billboard International Power Player. He is the founder and CEO of Soundtrack Technologies, the leading music streaming service for businesses. Originally founded as a joint effort with Spotify, Sars has transformed Soundtrack into the only global B2B streaming service of its kind, servicing over 80,000 businesses across 74 countries with a music catalog of more than 100 million tracks cleared for commercial use. Before Soundtrack, he co founded Beats Music which was acquired by Apple for 3 billion and transformed into Apple Music and Pacemaker, the world's first pocket size DJ system. Well, good afternoon Ola. Welcome to the show.
- [01:13]
A
Thank you Brian.
- [01:15]
B
Absolutely my friend. I appreciate it especially making the time out of Stockholm, Sweden today. I'm in Kansas City, so there's quite a bit of a time traverse difference here. I know jumping time zones and calendars is hard, so thank you so much. And Ola, if you could. Here we're going to jump into your first question. You've built multiple category defining music tech companies from Beats Music to Soundtrack Technologies. What reoccurring insight about the music business has guided your entrepreneurial decisions across these ventures?
- [01:47]
A
I've been doing it for 20 years and I'm still working on the same thesis as when I started. And that thesis is quite simple. It's a thesis based on the change of the music industry, basically. So 20 years ago I kind of observed as a music lover, but not working in the music industry, just a fan, and that everything was changing at the same time. Basically digitization was occurring in the music industry, production of music was going digital, distribution of music was going digital, and consumption of music was going digital all at the same time. Meaning kind of a massive tectonic shift in the industry which obviously provided some opportunities in the future. So I changed from a previous career and jumped in and since then I've been building technology companies within the music industry.
- [02:40]
B
Really love your story. Obviously you've done some great things working with some great celebs like Dr. Dre, Spotify, et cetera. You know, 20 years in this business, a lot has changed as you know. And I love what you said. Your thesis is the change, that evolution of the music business. So I appreciate your contributions to the industry. Ola Soundtrack started off as a Joint effort with Spotify and has since evolved into the world's leading B2B music streaming platform. What made you realize that businesses needed a fundamentally different solution than consumer streaming?
- [03:14]
A
Well, first of all, I previously I worked in the consumer markets, so I was kind of in the forefront of what we take for granted today in music streaming for consumers. Right. So today there's multiple options for us as consumers. Spotify, Apple Music, Amazon and I can keep going obviously. So this transformation of the music industry happened, started in the consumer markets and now it's everywhere. And the industry has kind of concluded that music streaming is the forward model for music consumption. That did not occur in the business to business markets, which is cafes, restaurants, retailers playing music to create an atmosphere and maybe sell more coffee or whatever business they're in. That part of the music industry is, I would say, less developed and 10, 15 years behind what's going on in the consumer market. The MIC thesis Now more than 10 years ago was what happened in the consumer markets for music, meaning streaming becoming the core model would also happen in the business to business market, meaning what you guys in the US refer to as background music. So I started building a thesis around that and I started looking at what does a business or a brand need in order to deliver the right music at the right place at the right time to add commercial value. And that was a completely different use case or product requirement than what we're using in our phones and our consumer service day. So I started building on that thesis and we've now rolled out soundtrack worldwide and we're the fastest growing in kind of the leading the category leader within business for music. Music for business start.
- [04:59]
B
Yeah, no, thank you, I appreciate that, that's awesome. You do. You certainly have some incredible growth there. Fastest growing in this particular vertical, which is amazing. As you mentioned earlier too, lots of options for consumers in the music streaming you just mentioned some examples, you know, there's Spotify, Apple, Audible, Pandora, etc. However, you saw a need in the business side of things. Things were less developed. You even highlighted that it might be about 15 years behind, but you saw that business needed to deliver the right music at the right time to the right consumer. So I really appreciate your insights.
- [05:35]
A
Ola.
- [05:36]
B
Having co founded Beats Music which became Apple Music, how do you view the current state of music streaming economics for artists, platforms and businesses? What still needs to change?
- [05:47]
A
Well, sometimes there's a misrepresentation of this reality. The music industry actually in terms of size of consumers that are paying for music, has never been bigger it's actually twice as big as it was before the streaming revolution. So in terms of market growth and consumer reach and monetization and compliant usage, it's never been healthier than it is now and it continues to grow. Then usually what people get wrong is like, let's just take an example where I worked previously with Beats and Apple. Like we redistribute around 70% or more of the revenues we take from consumers on a subscription basis, right? So if I we bring in 100 million, we share 70 million with music creators of that. And I think as a digital service provider, keeping 30% is fair given that we need to build the technology, market the product and distribute worldwide and everything. But 70% is passed through towards the music creators. But the path towards the music creators goes through music Rainbow, both through publishers. There's a lot of middlemen in the equation and that's usually where most of those revenues either go, they distribute to certain artists more than others and so forth. So as the digital service providers in the world, we actually have a very fair model. Having said that, the redistribution backwards into the music industry sometimes turns out to be unfair. Last comment. But also remember today there's like almost a hundred times more artists and music creators being published into the music industry. So there's more people and artists that need to share the pie than before when we were distributing CDs and only a fraction of the artists actually got published.
- [07:49]
B
Wow, amazing. And I appreciate the stats. Streaming is definitely stronger than ever. It's a bit, a lot more beneficial than it was years ago. As you know, in the traditional way. There's a lot of market growth, reach monetization in the streaming business and it continues to grow. What I really liked and I'll highlight is you way the way you redistribute the revenue, about 70% goes back to the creators or the artists, which I think is amazing. Obviously there's a certain amount that you need to reinvest and build the new technology. And I totally get that, but love those insights, really do. And Ola, the last question of the day, as we look ahead, how do you see AI, artificial intelligence, personalization and new licensing models reshaping the future of music in physical spaces, retail, hospitality, fitness over the next decade.
- [08:36]
A
Yeah, I mean everyone's talking about AI left and right, up and down and yes, it's very relevant, of course. And the music industry, there's a couple of huge cases. One is music creation, which is mostly what people talk about when they refer to the AI revolution in music Meaning that actual computers are producing songs rather than humans. And that's happening as we speak. I mean, there's a bunch of services out there where you can go and you can tell a prompt what type of track you want and they will create that for you. And that's interesting. But in the music industry, or kutch, my perspective is that we already have, I mean, just that soundtrack. We distribute around 150 million tracks. We have. There's no need for additional supply. We still have Fleetwood Mac and Bruce Springsteen and all the beautiful art that has been created for the last century to distribute. And so there's so much beautiful music out there, there's really no need for more music or the actual user. So I think it's interesting that AI is creating music now, but there's really no need for in terms of the customers buying, and in my case, that's the retailers and the restaurants and hotels in the world. And then the other application of AI that we've been working with, and I've actually been working with almost for 20 years now. So for me it's nothing new, is how do you use AI to create the best playlist for a specific context? So previously when I was in the consumer markets, it was for new Brian, when you're opening your streaming app, what music can we recommend to you that will kind of save the day for you? And where I am right now, it's for the brands and the businesses. How can we help these businesses to curate, meaning, create the perfect playlist for that hotel in Kansas City today for breakfast so that they can sell more smoothies? So we're just applying AI in terms of music selection and playlist creation in one use case. And then there's also AI used for music production. And we just see that as another source of content alongside all the beautiful music that we already have on our platform from humans who've created through the years.
- [10:57]
B
Thank you. Really appreciate that. And you're right, there's a lot of people out there and I've seen it where AI is doing some music creation. And I would agree with you, I'm a little bit old school. There's really not the need for really more music creat created by AI. We do have a lot of music out there that has been created by humans, beautiful artists that are still being listened to today, I mean, by millions every day. So I appreciate that perspective. But AI is useful in music curation, playlists, depending on the environment, the business, et cetera. And I think that's really creative and that's a great place for AI to be in this part of the business, so I appreciate that. And Ola, it was such a pleasure having you on today, and I look forward to speaking with you real soon.
- [11:40]
A
All right, thank you, Brian. Thanks for having me.
- [11:42]
B
Bye for now.