These should be the good times for Spotify.
After all, it successfully negotiated the biggest potential hurdle in its near 10-year history to emerge from its IPO with a market cap of over $30 billion (£22.9bn) and its position as the worldwide No.1 streaming service considerably enhanced.
And yet, since that deftly-handled private listing back in April, little else seems to have gone to plan for Daniel Ek’s company.
True, its shares have steadily risen in price. But, while its Q2 earnings report on July 26 initially saw its stock spike to a new closing high of $196.28 (£149.63), they dropped around $10 (£7.62) per day on the two following trading days to $175.31 (£133.64), suggesting Wall Street wasn’t too impressed, and wiping a cool $3.51bn (£2.68bn) off its market cap.
Shares rallied to $183.02 (£139.52) at close of Tuesday, and it’s hardly the recent Facebook plunge, so this is not a company in freefall. But more worrying – certainly for the music business – is the exodus of staff.
Not just any staff, either, but some of the people who’ve helped make the company what it is: Kevin Brown, Angela Watts, Mark Williamson.
And more recent hires too: rainmakers such as George Ergatoudis, Dave Rocco, Tuma Basa, Rob Harvey and Stefan Blom have come and gone. And, yesterday, they were joined by Troy Carter, a key artist-friendly figure and probably Spotify’s most high-profile executive as the company increasingly follows the typical technology ‘no comment’ approach to, well, pretty much everything.
Some of this is inevitable, of course. Long-term employees may need new horizons and have post-IPO share options to cash in. And any company as successful as Spotify is likely to have some of its star performers poached, particularly in a market as competitive as streaming.
In contrast to its previous way of doing things, Spotify’s response has been to promote from within (new chief content officer Dawn Ostroff aside), rather than go out and hire some big names of its own from rivals.
Carter, for example, has been replaced by VP, global head of shows & editorial Nick Holmsten. And Ergatoudis, now at rival Apple Music, seems to have effectively been replaced by two, highly-capable execs. Ex-Vevo exec Tom Connaughton is in the new role of UK MD, mere months after joining as UK head of artist & label marketing, while Austin Daboh is now UK head of shows and editorial, where the biz will hope he can recreate the success of the Who We Be and Grime Shutdown playlists.
This is good for continuity, of course, but with Apple Music snapping at its subscriber numbers lead and making some high-profile hires, YouTube Music making waves and Amazon Music taking command of voice control, the No.1's new team will want to get back on the front foot. Especially as some label partners are known to be disgruntled about its attempts to directly licence artists (a tactic played down by Ek on yesterday’s earnings call). And it’s even misfired on the music at times lately, its much-mocked Drake takeover failing to deliver bigger numbers than Apple Music.
Talk to insiders at the company and there’s a lot of chatter about things “getting very corporate, very fast” as more financially-oriented Americans begin to play a more prominent role than groovy, music-loving Swedes. That’s to be expected post-IPO (and indeed may need to accelerate if the company’s future earning calls are to play better on Wall Street than the first two). Others talk of tightened controls on Spotify’s famously unrestricted approach to spending money internally – again, perhaps inevitable, but at odds with Spotify’s pledges to not just be another corporation.
None of which may add up to a hill of streams should Spotify maintain and extend its status as the world’s No.1. And, lest we forget, Daniel Ek has been in far tighter spots and emerged victorious.
But the digital retirement home is full of former star performers who lost their way, often when big money got involved. Spotify’s nowhere near that stage yet. But it could certainly use some good news fast in order for it to change the momentum and – to borrow a phrase from its old frenemy Taylor Swift – to be excluded from that particular narrative.