Seventeen years after its founding and 600 million users later, audio streaming platform Spotify is embracing the challenge posed by a phalanx of music streaming platforms seeking to take a piece of the Sweden-based company’s success.
“Everybody loves this idea of Spotify versus another company and it makes for an interesting story,” said Dustee Jenkins, Spotify’s chief public affairs officer.
“But really, creators everywhere benefit when there’s a lot of competition. Why? Because it gets more people streaming,” Ms Jenkins told The National at the 2024 World Governments Summit in Dubai.
There is indeed a lot of music streaming competition out there. Apple, Amazon, YouTube and Tidal are a few of many companies seeking to capture monthly streaming fees from customers who want instant access to music and other audio content.
Ms Jenkins, however, pointed out that it is the single app-centric approach that differentiates Spotify from its competitors.
“There are some companies that look to have different apps for different use cases, but we don’t want to confuse our listeners,” she said.
That approach, she stressed, made it possible for Spotify to add more content and more value on to the app in a seamless manner that benefits both users and creators.
Spotify had a presence at this year’s World Governments Summit, featuring more than 4,000 delegates from the public and private sectors, including 200 speakers from 80 international, regional and intergovernmental organisations such as the UN, the World Bank, the International Monetary Fund, the World Health Organisation, the International Atomic Energy Agency and the Arab League.
The promise and potential problems posed by artificial intelligence reverberated throughout the summit.
“Rather than dictating things by algorithms, what we seek to do is couple humans with algorithms to get the best end result,” Ms Jenkins told the panel focusing on how governments can harness talents and cultural identity.
“In this region [Middle East and North Africa], we have individuals who go all around and they're listening to talent … going to local music establishments and schools and universities, and they make sure that talent gets the opportunity to be playlisted.”
AI has proven to be a potential game-changer for musicians and streaming services, but it is also not without ample concern that it could fuel content theft from creators, potentially creating an economic content creation chasm.
Spotify already has precautionary measures in place to protect musicians and content creators, Ms Jenkins told The National.
“You can't pretend to be someone you're not,” she said, referring to the plethora of AI tools making it possible to duplicate voices.
“We're focusing on enforcing the rules we have in place around copyright.”
Spotify, Ms Jenkins said, has long made it a point to use AI in areas that enable and help the creator, and that the company used AI for various tools that help users discover content and remind those same users of the content they enjoyed in the past.
“I think this debate will continue across the industry in terms of how far is too far,” she said, referring to the seemingly endless discussions about AI ethics.
“The reality is, a lot of our creators are using AI tools to help with their creative process, whether it's helping to fill a lyric, or getting inspired by other instruments,” she added.
“We're not going to say to a creator that they should or shouldn't use AI, the creator can make that decision on their own.”
Ms Jenkins said DJ, a personalised AI guide that seeks to learn user music tastes and deliver a curated line-up of music, was an example of the company's efforts to use AI to enhance the listening experience.
“It’s essentially AI based on an individual who works at Spotify, and that individual helps you discover content,” she said.
What's next for Spotify?
While music put Spotify on the map, in recent years the company has put a lot of resources behind the podcasting boom, forming partnerships in the Middle East and hosting events bringing together prominent podcasters.
Those efforts to bolster the podcast boom show no sign of slowing down, and Ms Jenkins said the company was also excited about its recent entry into the audiobooks sector.
“This is a space that's largely been held by one company,” she said, referring to Amazon's Audible.
Ms Jenkins, however, noted that a lot of Spotify's success revolved around remembering the company's roots.
“We're always in the realm of audio, and that's the core of what we do,” she said.
“It was music first, then we added podcasts, and now we're off to audiobooks, so we'll see what comes next.”
At the heart of Spotify's efforts is continuing to make sure that the right creator finds the right listener, Ms Jenkins said.
She also reflected on Spotify's decision five years ago to establish a physical presence in Dubai.
“It's incredibly important to us,” she said. “We've seen an explosion of content and talent from the region.”
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Avatar: Fire and Ash
Director: James Cameron
Starring: Sam Worthington, Sigourney Weaver, Zoe Saldana
Rating: 4.5/5
Company profile
Name: Thndr
Started: October 2020
Founders: Ahmad Hammouda and Seif Amr
Based: Cairo, Egypt
Sector: FinTech
Initial investment: pre-seed of $800,000
Funding stage: series A; $20 million
Investors: Tiger Global, Beco Capital, Prosus Ventures, Y Combinator, Global Ventures, Abdul Latif Jameel, Endure Capital, 4DX Ventures, Plus VC, Rabacap and MSA Capital
Company Profile
Company name: Fine Diner
Started: March, 2020
Co-founders: Sami Elayan, Saed Elayan and Zaid Azzouka
Based: Dubai
Industry: Technology and food delivery
Initial investment: Dh75,000
Investor: Dtec Startupbootcamp
Future plan: Looking to raise $400,000
Total sales: Over 1,000 deliveries in three months
PROFILE OF INVYGO
Started: 2018
Founders: Eslam Hussein and Pulkit Ganjoo
Based: Dubai
Sector: Transport
Size: 9 employees
Investment: $1,275,000
Investors: Class 5 Global, Equitrust, Gulf Islamic Investments, Kairos K50 and William Zeqiri
If you go
The flights
There are direct flights from Dubai to Sofia with FlyDubai (www.flydubai.com) and Wizz Air (www.wizzair.com), from Dh1,164 and Dh822 return including taxes, respectively.
The trip
Plovdiv is 150km from Sofia, with an hourly bus service taking around 2 hours and costing $16 (Dh58). The Rhodopes can be reached from Sofia in between 2-4hours.
The trip was organised by Bulguides (www.bulguides.com), which organises guided trips throughout Bulgaria. Guiding, accommodation, food and transfers from Plovdiv to the mountains and back costs around 170 USD for a four-day, three-night trip.
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