Gustav Söderström
speaker
294 appearances
1 recordings
1 series
first heard May 2025
last heard May 2025
Gustav Söderström’s voice in public audio — every appearance, attributed to the second.
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Appearances
And if you just look at the numbers... You just have to keep going and it's going to get to billions of users paying and then several billions. Then the music industry is absolutely massive. I just think the music industry is undervalued. Terminally, it's going to be much bigger than it looks.
I'm curious how you're thinking about the podcasting world. This is something that... we're sitting here doing right now, I've been doing for a long time. Now it seems we've entered this interesting new era where when I started doing this, I remember it was quite, I would call it low status. When I told people about it in 2016, they either didn't know what it was or thought it was silly.
And now, especially in the US with what happened around the election and the importance of podcasts in the election, it seems as though it's hit some tipping point where Basically, anybody that might make sense to have a podcast now has one or is launching one. And it's the corporate marketing strategy is to get a podcast and it's the communication strategy is to go on them.
So it's really exploded in importance and visibility. What role has and will Spotify play in all this? And just what do you think about podcasting and its importance?
The reason we went into podcasting, one thing that I'm very precious about when it comes to Spotify, and so is Daniel and the other co-president, Alex, who's my closest partner, is that there are many ways we could go as a company. And I think your business model, to some extent, steers you. If you're an advertising business model, mostly you're going to be steered towards marketing.
any additional engagement. Fortunately for us, we're mostly a subscription-based business model. So we focus more on retention and you're going to vote with your wallet every month if you want to keep paying for us. We're not as steered towards engagement at any cost. So having been at Spotify for a long time when this happened, one of the things that made me feel very good about Spotify was that
When people used it, when they lost an hour on Spotify, they felt very good about it. If you lost an hour on music, you come out feeling like that was a good hour. One of the reasons I really pushed quite hard for podcasting in the company was that I was using it myself and a lot of our developers were using it. And I saw it being hacked into the product at Hack Week every year.
People wanted them there. And we just said, our developers is like a small sample of the world. What if they're a good sample of the world? So that was one push. We saw people using it internally and hacking it. But what made us decide on it was that it was this format. Everything in the world was getting more and more short form. People were bite-sized, and attention spans were going down.
And there was this counterforce, which was long-form discussions, deep. People spoke in full sentences about quantum physics or whatever. And that just felt like something very important and good for the world. And so we looked at it. We saw that it seemed to be growing from a small base. We saw the biggest competitors being asleep at the wheel.
We did basically the Peter Thiel idea of it's better to go after small markets early and bet on organic growth and try to take a small share of a mature market. It looks less risk in the mature market to get 1%. But the thing people miss is the customer acquisition cost in a mature market is just massive. Whereas the customer acquisition cost in a new market is usually small.
So we decided to go for it because we thought it was something that was in line with music. If you lose an hour in a deep podcast, you come out feeling like you learned something. And this is the reason we also went into books, because it's in line with that. We want to be this nutritious service. There are two litmus tests for this.
One is if you lose an hour on Spotify, how do you come out feeling versus if you lose an hour doom scrolling in the bathroom? How do you feel about that? In one case, you feel like you ate a lot of candy, like you had a lot of energy in you, but it's bad calories. In the case of Spotify, you feel like you learned something. The other litmus test that we have is see a lot of parents.
restricting screen time for their kids and saying, go to Spotify instead, which means that expresses how they feel about it and how we feel about it. So that was one of the reasons to go into podcast. It was part philosophical, but we also saw the market opportunity of a small market that was poised to grow. And we saw need in early adopters trying to hack it in.
And then we did this bet on leveraging our own distribution, combining it with music, saying that The market is this big right now, but what if we could expose podcasts to people who listen to music? Could we grow the market? So that's the bet we did. And the truth is, audiobook is something similar. In the US, audiobooks was a very niche behavior.
10, 11 million or something people who paid for them a la carte. And the idea was that's a limitation because of the business model. When you pay a la carte, you're not going to explore new books at $15 per book cost. Just as in music, when you pay $0.99 per song, you're not going to soundtrack your sleep. It's too expensive at $0.99 per three minutes.
But what if we have no marginal cost model where you can just explore? Is audiobook much bigger than it looks? Is the business model that is wrong? So again, it was seeing a market that looked pretty small, but you can see in the Nordics where you have the access model that it's getting very mainstream. So a bet on the market, but it was the same philosophical discussion. Are these good calories?
Is this nutritious? Is this in line with Spotify's mission of being the place where you go when you want to feel good about yourself instead of when you want to feel bad about yourself.
I remember the very first time I ever talked to Daniel walking along the West Side Highway here many years ago, he talked about this notion of Spotify needing to be better than free. It was a cool idea. If you think about podcasting, it's very different than music. When someone listens to this show on Spotify, you don't owe me anything.
How do you think about the way that podcasting and then obviously books is a little bit maybe more like music and I'd like to hear how you think about it. How do you think about if that's the supply of the stuff that people are listening to on Spotify or watching on Spotify, the ways in which that affects your business model and the bundle?
We didn't know before we started if podcasting and later audiobooks would be cannibalistic to the other media types or not. But it turns out it's not. So the easiest model to think about it is Spotify is a bundle now. You pay some price or you have the advertising based here and you get a bunch of value. And our job is to try to increase the value you get so you value it more.
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