The Law
Episode 3 of The Playlist starts with us shifting perspective over to Petra Hansson. Trying to bring Spotify to life was no easy task and navigating the law is a tricky minefield of lawsuits and messy conflicts of interest. Petra’s life is hectic and she works hard. She’s recruited to work on behalf of Sony Music, as Maxine Silverson has phoned and decided she should spearhead this messy Pirate Bay case. Martin Lorentzon from Spotify shows up at her office. They had a meeting scheduled and although that was rearranged, he’s not taking no for an answer. He makes the same pitch to her regarding Spotify that Daniel has to his investors, but she brings up it would be a conflict of interest. So naturally, he goes all in and decides she should leave one of Scandinavia’s top law firm and come to work for Spotify. When she rules it out as incredulous, he hands over his business card and tells her to think about it. The thing is, Petra is about to make partner at the firm so it’s not exactly a great time to be jumping ship. Well, she’s not an official partner but she’s “Junior partner” which is basically just another title for “not quite partner but you’re getting there.” Petra is not in the mood for carrot on the stick games and instead heads off to see what Martin and Spotify are offering. It’s quite the culture shock, with a frat-boy feel and a very different work environment to what she’s used to. I say work, lot of the people are playing games and messing about! After listening to Daniel Ek, Petra joins the Spotify team in the boardroom as they meet with Sony executives. Among them is Ken Parks, their “attack dog” who knows every inch of the law and will likely work to intimidate and undermine them. In order to get access to the music, they need to pay upfront. Ken is convinced this isn’t a viable and sustainable business enterprise. Daniel has heard enough and storms out, calling them all dinosaurs. Petra stays behind and listens as Ken hits the hammer blow and tells Petra and her team that they have no choice. They have to pay to see this through. Petra realizes that the law Ken and the others are using is outdated from 1998 when Britney had her first smash hit. This means that the current wave of digitalization has not been factored into their sums. Unfortunately the team hit another snag. They’re running out of money thanks to Martin overspending with his other business which is keeping them afloat. They only have weeks left of funds and they need to launch in in that time, otherwise everything will end in disaster. Petra reminds them they need to stop acting like children and actually begin approaching these places with some tenacity and restraint. Given how hard Warner have been hit lately with the piracy, Petra suggests they start there. Petra tries to compromise, playing the role of middle-man and working out how they get around the licencing. She suggests a paywall. The algorithm and statistics behind Spotify allows the team to see what’s trending, how many plays different songs are getting and which artists are doing well. Although this data is only for the users, Petra suggests they share this with record labels and investors. Daniel is adamant that they keep it for themselves. The others in the room – including Martin – are much more open to this idea. Unfortunately, Daniel’s stubbornness almost tanks the whole thing, as Petra heads back to her law firm she walked away from. This time the firm are much more serious and offer her the position of senior partner. The offer is only on the table for a limited amount of time. Petra’s heart isn’t really in it anymore though, wanting to instead find a way to try and make Spotify work. And then, a breakthrough. After spilling pearls all over the floor in the board meeting, she shows up to see the group and demonstrates exactly what she has in mind using said pearls. User-generated playlists. Spotify is free but they can have the best of both worlds with Spotify Premium. They want to try and make Spotify Premium the must-have part of the business model and it also means it’ll be sustainable as a business too. Eventually Daniel concedes and believes this is the right way to go. Petra shows up to see Sony again, but this time we have Tom, the senior partner she turned down, rather than Ken. Before Petra can even speak, he tells her the answer is no. It seems like some sort of petty vendetta against her so Petra decides to take a risk and find someone from the inside who knows his way around the law. Someone like Ken Parks? Well, the pair decide to work together, but the deal will come at a steep price – 50% of the business to be precise. Although the pair of them can negotiate it down to around 15%, this would give Spotify a foot in the door and work to their favour if they can tip the balance of power. Thanks to their combined efforts, they manage to get every record label to sign up to Spotify. Everyone gets their happy ending right? Well no, because apparently that’s not the whole truth of the matter, which we find out from coder Andreas.
The Episode Review
This is the episode that really helps elevate The playlist above a simple biographical drama into a wholly engrossing and insightful venture. There’s a lot of different parts to this show, and the constantly changing perspectives works really well to highlight how monumental Spotify was to riding that wave of digitalization we now occupy on a daily basis. It’s fascinating and inspiring to see how hard everyone worked to get it off the ground. Seeing things from different angles like this is arguably the best way of showcasing the rise of Spotify, although it seems like we’re going to be seeing things from the coder’s perspective next time out which will make for an interesting change of perspective – especially if the tone darkens a little.
