That will be when the current private equity owners have finished building up their acquisitions and start looking to sell them, enhanced and transformed for the new market dynamics. Perhaps Spotify will return to the space 3-7 years from now. Besides, the sheer volume of creator tools M+A activity is such that Spotify may well feel that it would not be able to get good value for money if it was to go on an acquisition spree. But, for now, podcasts are where the energies are focused. Spotify can still be, and may yet be, a powerhouse for music creators.
The sale of SoundBetter is a clear implication that podcasters are now the centre piece of Spotify’s creator strategy. It even rebranded its creator strategy to encompass podcasters. Since that point, Spotify has focused its investments, with a raft of acquisitions of both companies and talent.
When the labels pushed back against Spotify’s artist ambitions, Spotify had to find a new big bet, which was – of course – podcasts. But not only that, 2020 started the unprecedented process of large institutional investment into creator tools companies, such as Native Instruments, Splice, Output and iZoptope. BandLab is most of those things ( with 30 million people signed up to its platform), while AVID (maker of ProTools) launched distribution last year, as did Canadian creator tools company LANDR. The assumption remains valid and, indeed, there is much to see in the market today to point to a future where the distinctions are blurring between what is a label, distribution platform, creator tool or streaming service. It was making a bet that the music companies of the future would not simply be on the business of recording and releasing signed artists, but would instead participate in the creation of music further up the chain – just like they currently participate in distribution further up the chain. Spotify’s music creator strategy was both bold and sound. The future of what music companies will be But now, with news emerging that Spotify has just sold SoundBetter back to its founders, it is beginning to look like the strategy was already dead in the water before the original deal. Even after the label enforced volte-face, Spotify additionally acquired music skills marketplace, SoundBetter, in September 2019.
When Spotify launched its artists direct tool, moves had been made on the heels of its 2017 Cloud DAW and collaboration tool, Soundtrap, and formed part of a clear strategy of becoming a music creator powerhouse. They were not about to let their partner disintermediate them. The move came in the wake of fierce opposition from record labels who had let Spotify know, in no uncertain terms, that they were not going to let it compete directly against them. On July 1 st 2019, Spotify announced that it was closing its system that allowed artists to upload their music directly to Spotify.
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