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‘Spotify Untold’ Authors Reveal Secret Alliances, Internal Paranoia and Near Acquisitions

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.

One of the many illustrative insights from “Spotify Inifrån” (currently only available in Swedish), journalists Leijonhufvud and Carlsson, tech reporters for Stockholm’s Di Digital, culled material from more than 70 interviews conducted in London, Los Angeles, New York and Spotify’s home base in Sweden. Their sources included former top Spotify executives and investors, record company heads and competitors speaking on and off the record.

Among the revelations: How close Spotify came close to acquiring Tidal, and even closer to buying Soundcloud; How Microsoft, Google and Tencent all offered to buy Spotify at various points; How Ek scored a valuable partnership with Facebook’s Mark Zuckerberg just ahead of Spotify’s U.S. launch; And Spotify TV, the streamer’s failed attempt to topple big guns Netflix, Hulu and Apple TV (read a translated excerpt of that chapter).

At the core of the book, say the authors, is “a character-driven story of Spotify’s rise from a tiny start-up to the biggest music streaming company in the world.” Carlsson and Leijonhufvud recently sat down with Variety.

Let’s start with your opening scene: Spotify’s CEO confiding in a colleague that he believes Steve Jobs was, essentially, prank-calling him. How can you know if that’s true?
Sven Carlsson:
We have that from a trusted source. Whether Steve Jobs actually called Daniel Ek is something we can’t verify. To us, Ek’s claim is as a reflection of how paranoid and anxious he must have felt in 2010, when Spotify was being denied access to the U.S. market, in large part due to pressure from Apple. The major record companies seem to have been quite loyal to the iTunes Music Store, and to Jobs personally. Apple had roughly 80 percent of the market for digital music distribution in the U.S. at the time. Jobs saw music downloads via iTunes as a comparative advantage in his ‘holy war’ against Google’s Android platform.

What ultimately allowed Spotify to break through the American armor?
Jonas Leijonhufvud: Secret deals between Spotify and Universal Music Group, and Spotify and Sony Music. Because Spotify was hindered by Steve Jobs, it forced the company to sweeten its deals with the record companies. That finally allowed Ek to enter the U.S.

Did you have participation from Spotify for the book?  
Leijonhufvud: No. Ek seems to have chosen to close the shutters completely. Personally, I can understand that. Spotify is challenging Apple on a legal level right now. We address Spotify’s constant struggle with Apple in our book. If Ek were to talk about such sensitive topics in book form, [Spotify would] do it in their own way with full control.
Carlsson: Spotify is known the world over, but so much of its story has never been told before. So while we haven’t been able to interview the founders, we’ve talked to so many former senior executives, board members and colleagues. This is a fast-paced, character-driven book that tells the story from the inside of the company.

In your reporting and ultimate findings, what were you most surprised to learn?
Carlsson: I think we both felt a rush of adrenaline when we unraveled the details about the conflict between Apple and Spotify. After several months of research, we could finally account for how Jobs actively worked to oppose Spotify’s establishment in the U.S., and what he may have been thinking. It gave the story an edge. And it was of course exciting to dig into all the secrets surrounding how the record companies got rich on Spotify, how Ek almost bought both Tidal and SoundCloud, and how the stock trading in the most exclusive of global financial circles set the stage for Spotify’s listing on Wall Street.

You traveled some distances to sit down with sources…
Leijonhufvud: Sven went to Berlin. We were in London twice and both traveled to New York. Then we wrote a large part of the book in a house near Santa Monica in Los Angeles, where many of the American record companies are located. This is truly an international story and it’s been exciting to fit the puzzle pieces together. But a lot of people have been nervous about talking to us, too. We’ve promised anonymity to many sources, which makes the really interesting moments tricky to talk about.

Pictured below: Daniel Ek at age 16.

Daniel Ek at 16
CREDIT: Courtesy of Jonas Leijonhufvud

How do you view Spotify’s push into podcasting? 
Leijonhufvud: Music streaming is becoming a commodity, so Spotify needs to find new unique selling points. Competitors like Apple, Amazon and Google are all investing in TV and film, but Spotify knows it can’t win that race. Ek is instead spending hundreds of millions of dollars on podcasting companies and original podcasting content. He says 20 percent of the consumption on Spotify will be non-music in the future. Apple is countering by investing in their own podcasts, but that won’t stop Spotify. Ultimately, I think Ek would like to be a kind of Netflix for audio, with music as the backbone and exclusive content in other areas.

What challenges lay ahead for Spotify?
Carlsson: They need to work on their offering to tweens and teenagers, especially in terms of music discovery. I’m sure they are looking closely at Asian services like TikTok. Young people want to interact with music. They want to like, comment, interpret and share.

How is Spotify regarded in Sweden? Is it the country’s greatest export? (Besides ABBA and Max Martin, of course.)
Leijonhufvud: Swedes are proud of Spotify. It’s Europe’s largest tech company by market cap. Many Swedes see it as a symbol of the country’s success in both music and tech. Others are kind of tired of the hype and view the founders as aloof divas, hiding their wealth in tax havens.
Carlsson: Spotify used to be paired with Skype and the Minecraft makers Mojang as the Swedish success stories within tech. These days, it’s mentioned in the same breath as H&M and Ikea. All three have gone global and remained independent companies. People widely credit Spotify with inspiring many other Swedish tech startups to go global. To Swedes, Spotify carries itself like a U.S. company, with a large spend and a lavish corporate culture. Ek wants to compete for talent with Google, Amazon and Apple – not with regional players in Europe.

Spotify Untold book

What would you say to Spotify’s top brass if you had the opportunity?
Carlsson: That we like them! We think they’ve created something completely unbelievable. Their actions have had such significance for so many people’s lives and careers. They would probably rather tell their story themselves than have us do it for them, but I think they understand our role as journalists.
Leijonhufvud: I would want to hear what they think about our craft. My reading of the situation is that they’ve felt inhibited by the press for all these years, that they’ve been fueled by this. Maybe that’s how it is — when you’re successful at something, you’re scrutinized for the sake of scrutiny. We’ve tried to give a balanced picture in this book. We feel a great sense of responsibility, especially because the founders aren’t available to respond to how we describe them. It would be interesting to hear if they’ve read it and what they thought. Spotify is their company. But the story has become so much larger than that. Their company is a part of society today, of the culture we all share.

Will the book be available in English?
Leijonhufvud: We hope a U.S. publisher will pick it up! It’s an exciting David-and-Goliath story — how a young hacker from Rågsved grows up to build the world’s biggest company for music streaming, and beats Apple at their own game.

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