Interview with Will Page, Former Chief Economist – Spotify

As the author of Tarzan Economics: Eight Principles for Pivoting Through Disruption, Will Page is a music and economics expert who gives advice on how to pivot businesses and swing to the next vine when the current one is withering. In this article, we cover some of the insights that Will shared with us through his experiences as the former Chief Economist at both Spotify and the Performing Rights Society.

The problems faced by the music industry from 1999-2009

Before the rise of streaming services such as Spotify and Apple Music, the music industry was facing a large problem concerning copyright. Between 1999-2009, the presence of music piracy sites was prevalent, as millions of people would illegally download and conveniently steal music through these sites. This resulted in a 10-year war over copyrights, with endless litigations and suing of consumers and websites, in an attempt to end the problem of piracy.

However, music and economics expert, Will Page, exercised pivotal thinking and started to look at the problem differently. By taking a step back, he soon realised that people had been looking at the problem from the wrong perspective. The problem was not that people were stealing music through these piracy sites, but rather, the demand for music was higher than ever before but was not being addressed and monetised properly.

Spotify, which eventually went public on the NYSE in April 2018, successfully addressed this problem by offering its music streaming services to consumers all over the world. Consumers who wanted to listen to their favourite songs and artists could now conveniently search and consume music to satisfy their demand. This effectively ended the problem of music piracy as a business model was developed that monetised music so that musicians and artists were paid, whilst giving consumers a convenient way to consume music. This has undoubtedly revolutionised the entire music industry, causing immense growth and development.

Will Page’s book, Tarzan Economics, revolves around the idea of the fictional character, Tarzan, using vines to keep moving forward. He explains that it is very important to know when to let go of the current vine and move on to the next one. The music industry’s journey through disruption during the 1999-2009 period serves as an excellent case study. Their old concept of ownership essentially held them back and caused a huge legal war with numerous piracy sites and consumers. However, by letting go of that concept and reaching out to the new model of streaming, the industry was able to continue moving forward.

The effects of the COVID pandemic on the music industry

Similar to how the prevalence of piracy posed significant challenges which eventually changed the music industry, the COVID pandemic has also introduced new obstacles to the industry.

Interestingly, the impact of COVID was asymmetric, as various parts of the music industry were affected in different ways. Music streaming service providers such as Spotify and Apple Music benefited from the lockdown, as people stayed at home and consumed even more music than ever before. However, the live music sector – the main breadwinner for artists – was completely silenced as numerous tours all over the world had to be cancelled or delayed. To put this into perspective, consumers spent £2.5 billion on UK gigs and concerts in 2019, however, this fell by c.90% in 2020, and was still in recovery mode in 2021.

For artists that lived off their live tours and gigs, the effects of COVID posed a significant threat to their livelihood. As a response, there was a massive increase in popularity in live streaming technologies (e.g. Twitch, YouTube) where musicians could own and monetise their individual channels to reach hundreds of thousands of fans worldwide, without the need for articulated lorries, travel visas and flights.

As an example, Billie Eilish hosted a live stream event – a huge animated performance – which allowed her to reach fans all over the world. Through this, she was able to learn more about her fans, not just the ones that could afford the luxury of going to her live gigs and tours, but also the fans throughout the world. Similarly, Dua Lipa claims that she was able to reach 5 million fans through her live streaming events.

The effects of COVID have quite clearly led to another advancement within the industry as another vine was used to overcome the COVID lockdowns. It is clear that live stream musical events will not be going away even after live music returns; however, the question that remains is how both of these will co-exist in the future.

The challenges and changes brought about by COVID

The COVID pandemic has introduced many challenges that triggered the acceleration of positive changes within businesses and public bodies in general.

For example, local authorities were forced to pivot and embrace the power of technology for the first time. Unlike before, schools throughout the UK are now embracing online education which has expanded the options of many throughout the country.

Another example of significant changes during COVID is within the restaurant trade. Before the pandemic, the revenues and profits of restaurants would be correlated with the number of tables filled inside the restaurant. However, during the pandemic, several restaurants were practically empty but were doing more business than ever before! How? Food deliveries such as Deliveroo and Uber Eats.

The introduction of these disruptive innovations has certainly challenged and questioned the business models of many. Business owners have had to ask themselves what they actually need.For example, restaurant owners may ask themselves whether they really need table space, or whether they only need a kitchen – how do they balance that out? If these changes are not going away, then the important question to ask is how these will all co-exist in the future.

Main business trends in the 2020s

Smart money will often be one of the first to identify the main upcoming business trends. Will Page explains that one of these business trends will probably revolve around convenience for users and consumers. He explains that attention is a form of currency for our time, and thus, is valuable to businesses.

Consumers all have a limited time to consume content (e.g. Spotify, YouTube, Instagram, LinkedIn etc.), thus, it becomes increasingly important to be the winner in capturing attention. Will explains that attention can be either:

  1.  Binary – either you have the attention or you don’t;
  2.  Stackable – you can pay attention to different sources simultaneously e.g. consuming Spotify and Instagram at the same time

Will explains that it will be important to identify which forms of attention are complimentary to one another, as this could play a key role in offering the most convenience to consumers – possibly, one of the big trends in the 2020s.

Another big trend is the use of data – specifically, the use of consumption data over transaction data. Referring back to the music industry, Will discussed how the industry had to let go of relying on transactional data (i.e. how many CDs were sold) and switched to consumption data (i.e. which songs/artists are commonly listened to, how often and how long). This transition has enabled businesses to better tailor to their consumers, and again, offer more convenience for them.

To effectively use data, businesses should be migrating from the use of Microsoft Excel and reaching out to new vines in platform-based data tools, such as Tableau and Google BigQuery, which makes it easier to deal with larger data sets than Microsoft Excel can handle.

However, Will cautions not to overdose on data as it will not be able to explain everything. Correlation and causation questions will not go away no matter how much data is used, thus, businesses must be prepared to pivot and question data with some basic common sense.

Progressing with disruptive innovations

Events such as the COVID pandemic have greatly accelerated disruptive innovations, which have forced businesses to adapt and embrace change to stay afloat. Will explains that businesses must be able to continually adopt pivotal thinking, and reiterates the importance of competing for conveniency.

The ‘Browser Wars’ between Google and Yahoo in the late 1990s is a good example that illustrates this. Yahoo’s intention was to keep their consumers on their browser page for as long as possible, offering different services such as Yahoo Finance, Yahoo Mail, and Yahoo Chat to optimise time spent – a KPI metric they viewed as a positive.

On the other hand, Google viewed the optimised time spent as a bad thing, thus, focused on decreasing the time spent by consumers on their product. Essentially, they had reversed the traditional KPI, as they recognised that by doing so, they are providing value for consumers in the form of conveniency.

Will Page explains that pivotal thinking essentially allowed Google to win the ‘Browser Wars’ as they were able to analyse and reframe their KPIs to compete for conveniency and provide value to their customers.

Getting these insights from Will has been very helpful in suggesting how businesses can continue to stay relevant to their customers.

With thanks to Will Page, Former Chief Economist at both Spotify and the Performing Rights Society