SXSW: Spotify’s Ken Parks talks about the future of music consumption

It’s a favourite topic of discussion in these new-frontier times — the future of music and how it’s consumed by fans. Spotify, the digital music service, is driving this conversation forward by providing a music discovery and sharing platform that has resonated with both artists and fans. According to Spotify’s Chief Content Officer Ken Parks, we’re only just getting a glimpse now of how those two elements fit together and can be mutually beneficial.

Parks says there are 10-million active users on Spotify, and having just launched in Germany on Tuesday, the company is expecting that number to increase. The model that Spotify has created, he maintains, has given much back to the music industry, in the time of its arrival on the music scene in Sweden in 2008.

Parks says the numbers have shown them — in the millions — that a huge percentage of users are pirates and that Spotify has given them a better reason not to pirate. He explains the rationale behind Spotify was always to offer an alternative and that they want to “cannibalise piracy” in a big way. “We think it’s a scandal that the industry has shrunk the size that it has,” he says.

Parks says the majority of users are in the 18-24 demographic and they use Spotify to give them easy access to carry the songs they like on their phone. This is partly why it has resonated so well with people. “The enormity of the catalogue on offer and also the simplicity of use, that’s why people like it.” But he says a major factor that has also driven the number of users up is Facebook integration, making using Spotify an even more engaging medium where people can share their own curated playlists. Parks says Facebook users are three times as likely to buy a paid subscription, without adverts, and so now they have made linking to Facebook as a pre-requisite for signing up.

This impact, says Parks, has in turn reflected on the music industry, and Spotify has been able to pump money back into it, helping bands face the challenging future. Spotify, he says, returns 65-70% of its profits back to the rights holders, and operates with small margins. It has generated a quarter of a billion dollars this year so far. When asked about the bands that are not on Spotify, for example Coldplay, Parks says that they are always trying to engage them but that it is a rare number of artists, even if they are high-profile ones, that don’t make use of the service.

Frontman for the metal group Disturbed David Draimen, who joined in the conversation, believes that any band not utilising Spotify is missing out on an extremely important avenue for reaching fans and exposing them to new music. “Just being able to drive the car before you buy it is a beautiful thing. Most people like to listen to music before they buy it. The people who are going to buy it, will buy it, those who are going to steal will steal, but if you give them another option — this whole catalogue and the ability to share it with friends, you fatten the kitty and it becomes very inviting for them to switch over,” says Draimen. “For artists, if your fans are sharing that with their friends, it’s spreading virally among all those people — it really is an incredible network.”

As Spotify continues to grow, Parks said that Africa is a continent very much on its radar, although he couldn’t give a time-line for when a launch would happen. But whenever it does, if it has the impact it’s had in other music economies, then surely it would be welcomed with open arms on this continent too.