I'm Daniel James and you're listening to seven AM. Recently, the founder of Spotify, Daniel Eck, announced his stepping back from running the company. He leaves us one of the richest men in his home country of Sweden, with Forbes estimating his wealth at nine point six billion dollars. In a departure note, the staff, Xody wants to focus on creating more Europeans supercompanies, companies he's described as developing new technologies to tackle some of the biggest challenges of our time.
The move comes months after x involvement in the global defense industry was revealed, facing an artist backlash, with some pulling their music from the platform. Today, we're bringing you an episode we recorded back in July which exposes x investments in AI based military technology and Spotify's embrace of AI in music, which with author and journalist Liz Paley. It's Sundai October twelve. Liz, thanks for speaking with me.
Spotify is fan that Daniel Lick has just invested. I have a one billion Australian dollars into an IR military company. You've been tracking Spotify and Daniel k fiyis, so can you tell me about X history when it comes to investments like these.
Yeah, so, Daniel X first invested in this company called Helsing, which is a AI military tech company, in twenty twenty one, but not only invested in it, he also co authored an op ed for Politico where he was advocating for
increased investment into AI military technology. This latest tabline, I think, you know, it was really interesting to me because not only of the dollar amount that was attached to it, but you know, they also announced that he'd become the chairman of the board of this company, And Daniel Eck and Spotify have really become embedded in the defense industry. In addition to Eck. Also last year, Spotify announced that their new CFO was someone who had previously worked at SOB,
which is another Swedish defense company. So you know, there's there's some deeper ties between Spotify and the military industrial complex, even beyond just Daniel Eck.
Daniel k has become very rich off the back of Spotify's a brilliant name many times, Iva, can you tell me about his rise and what he first visached for the platform.
Yeah, So, Daniel X's background before Spotify was in the advertising industry. In two thousand and six. He started this company with Martin Lawrenson, who also had a background in the advertising industry too, and their original idea was for a company that would pair advertising revenue with free streaming media. It wasn't even necessarily one hundred percent clear that this was solely going to be a music company.
I do think that, Like, you.
Know, over the years, it seems like there have been attempts to kind of rebrand the co founders of Spotify as music guys. You know, if you look back, you can find press photos of Danie lackholding and guitar. There also was an attempts to sort of shape this narrative that you know, Spotify's goal was to save the music industry.
So early on, like nineteen ninety nine and naps Are changed pretty much the whole world for me. I mean, it's the internet service that changed my life the most, I would say it. But the enfortunate part was obviously they didn't pay artists. So really at that point when naps Are shut down, I started thinking about how can you make it better?
And and you know, Spotify was leveling the playing fields for independent musicians or contributing to democratizing music and culture.
You know, these creators are really spectacular individual people who want to connect, want to grow, and we want to create that platform for them where they can thrive.
And those are kind of like buzzwords that we heard associated with a lot of tech companies and platforms in the mid twenty tens. But it was important to kind of like interrogate those those ideas a little bit and look into like, you know, okay, what's actually behind this company, who's behind it, who serves to benefit from the rise of streaming.
We live in an age of streaming services. Headed Spotify become the biggest music streaming service in the world, Can you talk me through the business decisions that led to that happening.
Yeah, it's a good question, because you know, they weren't necessarily the first. But one of the things that is unique about Spotify is a rise of the Spotify playlist. It's a cultural phenomenon and the strategic thinking that informed the prioritization of a playlist as a way of growing
their subscriber base. Twenty sixteen to twenty nineteen was this sort of time where the Spotify playlist playlists made by in house editors, had this really kind of unique cultural wait over how people discovered music, and just in the music industry was considered like a really important part of the promotion process for a new record, for example. So artists were being convinced that these editorial playlists were going to be an important part of how they connected with
and sort of gained new fans in some ways. Around twenty fifteen twenty sixteen, you started to see headlines in the music business press claiming that Spotify was filling its playlists with music by artists who didn't exist, with fake artists in order to pay out fewer royalties. You know,
the public had been calling me as fake artists. There actually was an internal term at Spotify perfect fit content, which is this phrase that they used to describe music commissions to fit certain moods and playlists with improved margins. So it's clearly it costs saving initiative in order to kind of squeeze value in some ways out of listeners
but also musicians. There are so many different ways in which processes of algorithmic recommendation and automated decision making have shaped not just the sound of music, not just the type of music, not just the reality of generative AI music on these platforms, but shapes the way people think about meaning in music and the way music is contextualized
and recommended. Spotify and other streaming services allow generative AI content onto their platforms, and the generative AI question, you know, only continues to be more urgent, and it says a lot I think about the reality that you know, not just Daniel Eck, but a lot of people who end up in positions of power in the music industry, like aren't super interested in music. They're interested in growing their wealth. So yeah, definitely not music, guys, after.
The break, your favorite middle of the road old country band and even real least we know Spotify uses AI to keep you listening on their platform, So what do we know about their plans for using generative II further?
Yeah, so it's hard to like speculate about what they might do when it comes to generative AM music on the platform. But you know, what we do know is that there's like tens of thousands of generative AI tracks being uploaded to streaming services every day, and there's been this, you know, story of this viral generative AI band called the Velvet Sundown.
If you've been on Spotify recently, you might have seen a band called The Velvet Sundown on your feed now. At first glance, it seems like any other indie rock group, but none of their members actually exist. The Velvet Sundown has now amassed almost one million monthly listeners, with songs including Dust on the Wind and End the Pain among their top hits. Take a listen those.
Us from you know. One of the big threats of generative AI material is the way in which it could potentially undercut the creative labor of artists and users should be able to make informed decisions about what they're listening to. And you could say, well, you know, people should listen
more closely or do their own research. But I think that if the technology is there to label this material, it should be it should be labeled because there are so many different concerns that people in the artist community have about generative AI, about their music as being users, training data, how it will be credited, how they'll be compensated, how compensation might be driven down by the existence of generative AI music on these streaming platforms.
More than a thousand musicians are releasing a silent album to campaign against the British government's plans to change copyright laws which could allow tech funds to train artificial intelligence models using real performers.
Voices.
Artists including Annie Lennox, Kate Bush, and Andrew Lloyd Webber back the campaign. They say the changes would reverse.
The right now. What we're seeing is a lot of the discourse that has sort of played out around generative AI music has been around deep figs.
At first, it's quite convincing. Creator Ghostwriter nine seven seven claims the song is AI generated, artificial or not. It quickly generated real numbers over six hundred thousand streams on Spotify before Drake's label had it pulled.
And that's important. It's important that you know if someone's likeness is being used, that they have the ability to get that work removed. But in reality, like the types of artists that are going to have the legal muscle to actually be able to do anything about that are pop stars, people who have really big legal teams behind them.
There's also all sorts of ways in which generative AI undercuts the labor of indie artists and DIY artists and smaller artists who might not have the same name recognition or legal team behind them to be able to take action against situations like that.
Sorry for the myriad of reasons, many of which we've touched upon. People have deactivided this Spotify accounts honest to remove their music from Spotify, but the lightest Ioli military investment was the last straw for many people. What does that tell you?
Well, you know, I think that because the economic model is the same across the board for most streaming services, I think people are going to start looking into these other things like, well, does this streaming service have ties to the military industrial complex? Does the streaming service use
generative AI music and not label it. I'm not someone who is really in the business of like putting the streaming services side by side and saying, well, this one pays a few penny fractions more than this one, so like, so you should be subscribing here was there? Like, I don't really like playing the role of consumer guys, because the vast majority of streaming services operate under the same proada model that is really I think an unfair model.
You know.
I think that a better way of doing streaming economics would be something called user centric, which is basically like I pay ten dollars to a streaming service, they take their thirty percent cut the remaining money goes to the artists I stream.
And finally is what would you say to people who are stocking the convenience of using Spotify or rather streaming services? How did I break free?
Well, if as a music fan, you are concerned with making sure that the money that you spend on music doesn't accidentally end up in the military industrial complex, doesn't accidentally end up going to a generative AI band, your best bet would be buying music directly from from the artists, whether it's through band camp or through their website, or through their record label, or through supporting an independent record store.
Yeah.
Like, the combination of buying music directly plus listening to independent community radio, for me is kind of like a winning combination. Like, I understand that music is vast. People listen to music for different reasons, and people engage with music for different reasons. So I don't expect every single person who really cares about music to start building an MP three library again and to buy an FM radio, even though those are the things that I would totally.
Suggest me too.
I do think though, that like that's kind of like our best bet in this moment, remembering that, uh, it's never been super convenient to be a fan of independent music, and that you know, being our participant in independent music culture like does require a little bit of friction.
In many ways, it's the inconvenience that Mike's are cool. Lise, thanks so much for speaking with us.
Thank you so much for having me.
Liz Pelly's book is called Mood Machine, The Rise of Spotif and the Costs of the Perfect Playlist. Thanks for listening to this episode. At seven am tomorrow, I'm speaking with Walkley Award winning journalist Monshafter about a decade's old study that showed transgender children could be counseled out of wanting to transition.
Back then, the children were described as gender disordered and it was basically suggesting that psychotherapy could be used to treat this behavior. These kids were hospitalized because they were displaying what the report describes as cross gender behavior, and it's clear that the intention was to stop that. And we now know that such practices are very dangerous, they don't work, and they cause long term psychological harm.
That study is still being used as an argument to stop children getting gender affirming care. Have spoken to one of the children studied to find out how their life unfolded, and that conversation reveals a lot about the fault of science underpinning our current debate on transgender healthcare. It's a fascinating episode and it will be out tomorrow. See you then,