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Steve Boom · The Bob Lefsetz Podcast

• 0:04
  Speaker 1: Welcome, Welcome, Welcome to this week's edition of the Bob
• 0:07
  Speaker 1: Left Sets podcast, not recorded live at the tune In
• 0:11
  Speaker 1: studio in Venice, California, but if the Music Media Summit
• 0:15
  Speaker 1: in Santa Barbara, California, back in May. My guest this
• 0:18
  Speaker 1: week is Steve Boom, who's head of Amazon Music. The
• 0:22
  Speaker 1: fact that you may not be familiar with his name,
• 0:25
  Speaker 1: you're certainly familiar with the Amazon Music. You should check
• 0:29
  Speaker 1: this out because it's a stealth operation and it's got
• 0:32
  Speaker 1: a lot of customers. You should know what's going on. So,
• 0:34
  Speaker 1: without further ado, Steve Boom is the Music Media Summit.
• 0:39
  Speaker 1: Last time I got together with Stevie was so formal
• 0:42
  Speaker 1: that I thought that was his image. Now we's so
• 0:44
  Speaker 1: relaxed after we evaluate my perception. Anyway, we were at
• 0:47
  Speaker 1: lunch and a friend of ours, the Worse for Concord Music,
• 0:51
  Speaker 1: which now owns Razor and Tie, said that the number
• 0:54
  Speaker 1: one streams music on your service is kids Bob. Is
• 0:59
  Speaker 1: that correct? No? Uh, because I said it was Garth Brooks. Uh.
• 1:08
  Speaker 1: Kids Bob's pretty up there. Okay, Uh, so's Garth Um.
• 1:14
  Speaker 1: I think our service the number one artists I have
• 1:17
  Speaker 1: to check, but most recently was Bruno Mars. Okay, stop
• 1:20
  Speaker 1: is up there. We have a lot of people, you know,
• 1:23
  Speaker 1: when you have an inexpensive device. A lot of people
• 1:26
  Speaker 1: have put Echo dots in their kids rooms, and we
• 1:29
  Speaker 1: family has always been a really important part of the
• 1:31
  Speaker 1: Amazon customer base. So UM, I think we make up
• 1:36
  Speaker 1: the converse of that, though, is true. I'm sure that
• 1:39
  Speaker 1: we're the number one streamer four kids bop. If I
• 1:42
  Speaker 1: looked across the different streaming services, I think that would
• 1:45
  Speaker 1: be a runaway. Well. If you look at Spotify, where
• 1:49
  Speaker 1: all everything is totally you can see the Spotify Top
• 1:52
  Speaker 1: fifty very dominated by urban music. Okay, and Apple does
• 1:57
  Speaker 1: not stop trumpeting how they're breaking records with their urban streams.
• 2:02
  Speaker 1: Rumor has it that the complexion of music on Amazon
• 2:07
  Speaker 1: that people listening to is different. Is that correct? That's
• 2:10
  Speaker 1: not a rumor, that's fact. Absolutely. Um. If you look
• 2:13
  Speaker 1: at if you just look at our charts, you would
• 2:15
  Speaker 1: see a much greater diverse profile of listening. Um. Urban
• 2:21
  Speaker 1: is important to our streaming service, like every other streaming service.
• 2:24
  Speaker 1: It's kind of strange to kind of cran my neck
• 2:26
  Speaker 1: here a little, but you'd see a much greater blend
• 2:29
  Speaker 1: you'd see a lot of country songs, you te rock,
• 2:31
  Speaker 1: you t pop, um, if you go down past the
• 2:34
  Speaker 1: top fifty you might even see a classical track or
• 2:36
  Speaker 1: two after Really yeah, Um, so you know it's it's
• 2:41
  Speaker 1: it is very different. I think when we see who
• 2:44
  Speaker 1: our customers are, you know, and we compare that to
• 2:47
  Speaker 1: the charts and the other services, we feel pretty confident
• 2:50
  Speaker 1: in saying that, you know, we're reaching new segments of
• 2:52
  Speaker 1: the of the of the streaming addressable market and bringing
• 2:55
  Speaker 1: those people into paid streaming. And a lot of people
• 2:58
  Speaker 1: don't know a lot about Amazon, you zick. So if
• 3:01
  Speaker 1: you have the Amazon Prime, what can you listen to?
• 3:05
  Speaker 1: If you listen? If you have Amazon Prime, you get
• 3:08
  Speaker 1: a catalog of about two million songs, But you get
• 3:11
  Speaker 1: two of the three major companies for all three majors.
• 3:13
  Speaker 1: Or you get all three majors. Now, when did the
• 3:16
  Speaker 1: third major come on board? Oh gosh, two and a
• 3:18
  Speaker 1: half three years ago, Yeah, quite a while ago. Um,
• 3:21
  Speaker 1: you get all three majors most indies. Um, but it's
• 3:25
  Speaker 1: a limited catalog. So you know, we launched Prime Music,
• 3:30
  Speaker 1: and the whole premise back then was you have to
• 3:33
  Speaker 1: remember dial back right. Spotify was much much smaller. Apple
• 3:37
  Speaker 1: Music didn't exist. There was a bunch of startups who
• 3:41
  Speaker 1: were offering ten dollars a month, and we knew we wanted,
• 3:44
  Speaker 1: we needed to be in streaming. But we also knew
• 3:47
  Speaker 1: from our own music store that back in very very
• 3:51
  Speaker 1: few people were actually spending anything close to twenty dollars
• 3:55
  Speaker 1: a year, which is what ten dollars a month adds
• 3:57
  Speaker 1: up to. In fact, the bottom of our customers, we're
• 4:01
  Speaker 1: spending about fifteen dollars a year a year, right, So
• 4:04
  Speaker 1: our idea behind Prime Music was, let's put out let's
• 4:07
  Speaker 1: give these people a lot of music. They're more casual
• 4:09
  Speaker 1: music listeners, but let's take out all that friction that
• 4:13
  Speaker 1: we talked to people. What do you not like about
• 4:15
  Speaker 1: the free music services. I don't like the ads, I
• 4:17
  Speaker 1: don't like the fact that I can't take it offline.
• 4:19
  Speaker 1: I don't like the fact that I can have limited
• 4:21
  Speaker 1: on my limited skips and all that stuff. So the
• 4:24
  Speaker 1: idea behind Prime Music was, let's make a music service
• 4:27
  Speaker 1: for everybody else because at the time, the only people
• 4:30
  Speaker 1: who were interested in ten dollars a month. And the
• 4:32
  Speaker 1: market has totally moved since then, um, but back then
• 4:35
  Speaker 1: it was it was very It was a small sliver
• 4:37
  Speaker 1: of people who wanted ten dollars a month, probably everyone
• 4:39
  Speaker 1: in this room, but you guys aren't representative of the
• 4:43
  Speaker 1: average consumer. And you know, out of the gate, the
• 4:47
  Speaker 1: whole industry misunderstood it, um, but consumers didn't because it
• 4:51
  Speaker 1: was adopted really really quickly. And yeah, so that and
• 4:56
  Speaker 1: there's a lot of curation involved. You know, we have
• 4:58
  Speaker 1: a team so that routine. How would you see the
• 5:01
  Speaker 1: market today, Um, there's definitely been so that that whole
• 5:06
  Speaker 1: segment still exists and is still growing rapidly. Um. And
• 5:10
  Speaker 1: we always got to remember that of the US population
• 5:13
  Speaker 1: or any other population historically hasn't spent anything on music
• 5:16
  Speaker 1: Lettleon ten bucks a month. Um, there's two. There's just
• 5:20
  Speaker 1: there's There's always been tress or radio, There's always been
• 5:23
  Speaker 1: almost always been cable music choice and YouTube and all
• 5:27
  Speaker 1: these other alternatives. Um. So that's still growing. But what
• 5:30
  Speaker 1: seems to have happened in the last three years is
• 5:33
  Speaker 1: a shift in mentality among consumers. I don't know if
• 5:36
  Speaker 1: there's this greater awareness of how what a great value
• 5:39
  Speaker 1: ten bucks a month really is for all that music.
• 5:43
  Speaker 1: I think I think Netflix and Hulu and all these
• 5:46
  Speaker 1: other services have helped. Right, people are used to subscribing
• 5:49
  Speaker 1: to things and not thinking that as I'm paying for music,
• 5:52
  Speaker 1: but I'm paying for entertainment. I think devices like the
• 5:55
  Speaker 1: Echo UM lower the barrier because it's something you use
• 5:59
  Speaker 1: so frequently and it's frictionless. And so we see that.
• 6:03
  Speaker 1: You know, the projections that existed for the size of
• 6:06
  Speaker 1: the ten dollar month market, um, you know those were
• 6:11
  Speaker 1: those are wrong now. I mean, it's clear that the
• 6:13
  Speaker 1: market's grown more quickly than anyone anticipated. And if the
• 6:15
  Speaker 1: percentage is on your service you have baked into Amazon
• 6:20
  Speaker 1: prompt you're not being charged per month you have are
• 6:24
  Speaker 1: to listen on an Echo, you have essentially a ten
• 6:27
  Speaker 1: dollar program to listen to Alla, Spotify, Apple Music. How
• 6:32
  Speaker 1: do the subscribers or the listeners breakdown amongst those three choices? Yeah,
• 6:38
  Speaker 1: I mean, so the three is really the same. It's
• 6:43
  Speaker 1: we have two services, Prime Music and Amazon Music Unlimited.
• 6:46
  Speaker 1: Prime is a limited catalog unlimited, as the name might suggest,
• 6:50
  Speaker 1: a full catalog service. UM. But one of the innovations
• 6:53
  Speaker 1: that we had was at launches, say, you know, can
• 6:56
  Speaker 1: we we think the Echo is incomplete without a full
• 6:59
  Speaker 1: catalog of music service. If you've ever used one. You've
• 7:02
  Speaker 1: got an intelligent assistant. You want to ask her anything
• 7:05
  Speaker 1: you know. And the analogy I always give people's imagine
• 7:09
  Speaker 1: if you said, hey, Alexa, you know what's the weather
• 7:12
  Speaker 1: in Santa Barbara and she'd say, well, I'm sorry, the
• 7:15
  Speaker 1: weather in Santa Barbara is not included with your prime membership.
• 7:19
  Speaker 1: I only have the weather in San Francisco and Seattle.
• 7:23
  Speaker 1: Not a great experience, and so we are. We've always
• 7:26
  Speaker 1: felt that for that device where it has no screen
• 7:30
  Speaker 1: where you can ask her anything, she's intelligent and always
• 7:33
  Speaker 1: getting more intelligent and you so you expect her to
• 7:35
  Speaker 1: be able to give you what you want. That it
• 7:38
  Speaker 1: demands a full catalog, and we took the approach of
• 7:41
  Speaker 1: saying went to the labels and said, you know, we
• 7:43
  Speaker 1: think there's a real opportunity here. Two for the first
• 7:46
  Speaker 1: time have what a lot of people called a mid
• 7:48
  Speaker 1: tier service, but not a dumb down service. It's a
• 7:52
  Speaker 1: full catalog, has all the features and functionality. The one
• 7:55
  Speaker 1: limitations that you're restricted to that single device. Um, but
• 7:59
  Speaker 1: it is Amazon Music Limit. There's abolutely nothing different about
• 8:02
  Speaker 1: it except that you can only play on that one echo. Uh.
• 8:05
  Speaker 1: That's been really successful for us, and we've seen a
• 8:07
  Speaker 1: pretty significant percentage of people who come on to that
• 8:09
  Speaker 1: on ramp leave and go to the full price plan,
• 8:14
  Speaker 1: whether an individual planks that would listen on their phone
• 8:16
  Speaker 1: or a family plan because they might have multiple echoes
• 8:19
  Speaker 1: and they like to have concurrent streams. Um. So Prime
• 8:22
  Speaker 1: Music has been around. To answer your question more directly,
• 8:24
  Speaker 1: I mean the Prime Music has been around for four years.
• 8:27
  Speaker 1: Next in the month, next month, next in June. Amazon
• 8:30
  Speaker 1: Music and Limited been around for eighteen months. Um. You
• 8:35
  Speaker 1: know it's it's uh, not quite fifty fifty, but it's
• 8:38
  Speaker 1: it's getting close. Um. And so Amazon Music Limb is
• 8:41
  Speaker 1: growing really really fast. Um, and Prime Music continues to
• 8:45
  Speaker 1: grow faster than Prime. So we're pretty happy there too. Okay,
• 8:49
  Speaker 1: let's go back. You don't come from the music business,
• 8:52
  Speaker 1: Uh No, although lass six and a half years I do. Okay.
• 8:56
  Speaker 1: So for we always like to get where someone's coming from.
• 8:59
  Speaker 1: We've discussed before. But for the people who are not here,
• 9:03
  Speaker 1: you grow up a lot of places. I was born
• 9:07
  Speaker 1: in New Jersey, grew up overseas and in New Jersey,
• 9:12
  Speaker 1: um until I was twelve, and then moved to Houston, Texas. Uh,
• 9:16
  Speaker 1: my parents are immigrants from Belgium, and so I spent
• 9:18
  Speaker 1: a lot of time in Europe growing up, and uh
• 9:21
  Speaker 1: then came out to California for college. And you know
• 9:25
  Speaker 1: my adult life, have lived a bunch more places, so
• 9:28
  Speaker 1: a bit all over. But after college you went to
• 9:31
  Speaker 1: law school, yep, I did. And when you went to
• 9:34
  Speaker 1: law school, what was your intention relative to practicing. So
• 9:39
  Speaker 1: my original plan, because I was an engineering guy. I
• 9:41
  Speaker 1: was an electrical engineer in college as well as a
• 9:43
  Speaker 1: history major. And you know, the life plan was, oh,
• 9:47
  Speaker 1: go work as an engineer for a few years, go
• 9:49
  Speaker 1: get an m b A and do that. And I
• 9:52
  Speaker 1: did work as an engineer for Compact Computer. If anybody
• 9:56
  Speaker 1: remembers that brand, um, yeah, there's enough people my agent here,
• 10:00
  Speaker 1: I certainly remember. Was I mean, I just was addressing Uh.
• 10:03
  Speaker 1: I was Amazon's got a small offense in Santa Barbara,
• 10:06
  Speaker 1: and I was going to talk to the people there
• 10:07
  Speaker 1: before coming here, and I was like, I think I'm
• 10:09
  Speaker 1: twenty years older than every single person in this room.
• 10:13
  Speaker 1: But I realized I didn't really enjoy being an engineer,
• 10:16
  Speaker 1: so I decided to go to law school. So the
• 10:17
  Speaker 1: plan was always go practiced for a few years, but
• 10:20
  Speaker 1: just take a different path to the same end point,
• 10:22
  Speaker 1: which is to to get into the business world in
• 10:24
  Speaker 1: one way or another. And what kind of law did
• 10:27
  Speaker 1: you practice? Uh? Corporate law starting in Washington, d c.
• 10:31
  Speaker 1: And that was miserable. And then UM moved back out
• 10:35
  Speaker 1: to northern California and met at my five year college
• 10:39
  Speaker 1: reunion a partner in a very small tech law firm,
• 10:43
  Speaker 1: and UH, by the end of launch, I was ready
• 10:46
  Speaker 1: to come out and started there the day that Yahoo
• 10:50
  Speaker 1: went public and it was in this company. This law
• 10:53
  Speaker 1: firm represented Yahoo. It's a very exciting day at that
• 10:57
  Speaker 1: law firm is one of you know, that was the
• 10:58
  Speaker 1: beginning of the Internet. UM Netscape had gone public six
• 11:02
  Speaker 1: months or year prior, and it was just a crazy,
• 11:05
  Speaker 1: crazy time. So I worked with startups for about two
• 11:07
  Speaker 1: and a half three years. And what did you actually
• 11:09
  Speaker 1: do as the lawyer? UM? A variety of things. So,
• 11:12
  Speaker 1: you know, you do finance work, work with the venture
• 11:15
  Speaker 1: capitalists to raise money, take companies public, two mergers. But
• 11:19
  Speaker 1: the fun stuff that we did was actually we really
• 11:21
  Speaker 1: kind of acted as their outsourced general counsel, you know,
• 11:26
  Speaker 1: because those are small companies. They may have money in
• 11:28
  Speaker 1: the bank from Sequoia or one of these big vcs.
• 11:31
  Speaker 1: But um so when it came to doing partnerships commercial
• 11:35
  Speaker 1: partnerships with people, um we would get involved at a
• 11:38
  Speaker 1: much earlier stage than you would normally associate with the
• 11:41
  Speaker 1: law a legal team. Normally it's like, hey, we've negotiated
• 11:43
  Speaker 1: a deal paper it. Uh, that's not how we worked.
• 11:47
  Speaker 1: We were in there a lot of the guys and
• 11:49
  Speaker 1: this was the early days of the Internet, A lot
• 11:50
  Speaker 1: of the guys that were the busines, dev guys, the
• 11:52
  Speaker 1: business own guys that these companies. I didn't know crap,
• 11:55
  Speaker 1: I don't know anything about the Internet. No one did.
• 11:57
  Speaker 1: But we actually knew more just because you know, we
• 12:00
  Speaker 1: would represent ten companies, you would see ten things. All
• 12:03
  Speaker 1: these people were straight out of business school and they
• 12:06
  Speaker 1: were just in their little lane with their one company.
• 12:08
  Speaker 1: So we got involved very early in hand in hand
• 12:11
  Speaker 1: it was. It was a lot of fun. So you
• 12:13
  Speaker 1: enjoyed that as opposed to working in Washington, d C. Yeah,
• 12:16
  Speaker 1: I enjoyed it until I realized the learning curve started
• 12:19
  Speaker 1: to flatten out, you know, and thinking any job you
• 12:22
  Speaker 1: probably look up and say that the people you work
• 12:26
  Speaker 1: for do I want to be that person? And as
• 12:29
  Speaker 1: people I was would be happy to be them. They
• 12:31
  Speaker 1: were really nice guys, but I didn't want to be
• 12:33
  Speaker 1: in their job. I didn't want to be a partner
• 12:34
  Speaker 1: at that firm. So, so how'd you segue into your
• 12:37
  Speaker 1: next role? I reached out to some clients, and so
• 12:41
  Speaker 1: you were actively looking to get out? Yeah, I decided
• 12:44
  Speaker 1: I had one of those moments. I still remember it.
• 12:48
  Speaker 1: I was at a wedding of a friend of mine
• 12:51
  Speaker 1: back east, and uh, I was flying back with my
• 12:54
  Speaker 1: now wife and we're sitting watching a movie and I
• 12:58
  Speaker 1: just I wasn't watching the movie. My brain was just
• 13:00
  Speaker 1: going a mile a minute. And I remember just out
• 13:02
  Speaker 1: blurting out, I'm done. And she looked at me, she
• 13:06
  Speaker 1: what'd you say? I said, I'll tell you later watch
• 13:08
  Speaker 1: the movie. Um. Yeah, I just had one of those
• 13:10
  Speaker 1: moments where like, I'm I don't want to do this anymore,
• 13:13
  Speaker 1: And so I started reaching out to clients. Now at
• 13:15
  Speaker 1: the time, was your soon to be wife. Was she working?
• 13:19
  Speaker 1: So was there any issue of economic instability or you
• 13:22
  Speaker 1: say I'm not leaving the law until I find another thing. Yeah,
• 13:26
  Speaker 1: I didn't. I didn't leave until I found a job
• 13:28
  Speaker 1: that was a lesson my My father taught me. It's like,
• 13:30
  Speaker 1: I've got more leverage if you're still working. So okay,
• 13:33
  Speaker 1: So you reach out your clients. What do you find
• 13:36
  Speaker 1: a lot of interests, UM and I, you know, I
• 13:40
  Speaker 1: talked to both startups and then I talked to Yahoo.
• 13:42
  Speaker 1: And Yahoo at that time was a newly public startup. Basically, um.
• 13:49
  Speaker 1: You know, it's hard a lot of people here are
• 13:51
  Speaker 1: old enough to remember, but it was the hottest company
• 13:53
  Speaker 1: in the world bar none. Um and UH. They were
• 13:57
  Speaker 1: looking for someone at the time. They're starting to expand
• 14:01
  Speaker 1: in Europe and they Europe generally was a couple of
• 14:04
  Speaker 1: years behind the US from an Internet accepting except in Scandinavia,
• 14:07
  Speaker 1: but in Maine, you know, Big five was kind of
• 14:10
  Speaker 1: behind the US, and so there weren't They've been looking
• 14:13
  Speaker 1: and it couldn't find anyone. And they're looking for someone
• 14:15
  Speaker 1: to run business development, and uh, I have a European
• 14:18
  Speaker 1: background and and and so that helped, and they said,
• 14:21
  Speaker 1: do you want to give it a shot? And like,
• 14:23
  Speaker 1: if you'll give a shot on me, I'll take it.
• 14:25
  Speaker 1: And so we moved to London. And so if you're
• 14:29
  Speaker 1: moving in London, you're you know, eight time zones away,
• 14:32
  Speaker 1: so one would think you're pretty much running your own show. Yeah,
• 14:36
  Speaker 1: you get a lot of autonomy. Um, you know, you
• 14:40
  Speaker 1: you spend a lot of time back in California the
• 14:43
  Speaker 1: company of that age, and doing business to all means
• 14:45
  Speaker 1: like doing partnerships that doesn't mean selling advertising means like
• 14:48
  Speaker 1: product type integrations, right and which means you need engineering support,
• 14:53
  Speaker 1: which happens in California. So you spent a lot of
• 14:55
  Speaker 1: time on Uh just say you get you get a
• 14:58
  Speaker 1: lot of phone calls when you're ready to go to
• 15:00
  Speaker 1: bed from people, right, and then you're bringing his firing
• 15:03
  Speaker 1: and you can't go exactly, So I supposed loved it.
• 15:05
  Speaker 1: It was a great four years in London and ultimately
• 15:09
  Speaker 1: a success or a frustration in terms of executing on
• 15:12
  Speaker 1: your role. Oh it was great. No, there were frustrations,
• 15:16
  Speaker 1: but I haven't had a job that doesn't have frustrations.
• 15:19
  Speaker 1: So but the net, the net output was great. And
• 15:23
  Speaker 1: when you were done four years later, our Yang and
• 15:27
  Speaker 1: his original partners still in charge. Oh yeah, yeah, Well
• 15:32
  Speaker 1: Jerry was there when I left the company. He he
• 15:35
  Speaker 1: had just become CEO. Um, we were at our second
• 15:40
  Speaker 1: CEO and said Tim Coogel was the original CEO of
• 15:43
  Speaker 1: of Yahoo and then Terry Simul had joined while I
• 15:46
  Speaker 1: was based in London. Okay, so how do you decide
• 15:49
  Speaker 1: we're at the end of Yahoo. Well, first they brought
• 15:53
  Speaker 1: me back, got promoted, did a bunch of other things,
• 15:56
  Speaker 1: spent I spent totally ten years there, first forward in London.
• 16:00
  Speaker 1: Then I may maybe I misunderstood, I forgot. So the
• 16:02
  Speaker 1: next six years, when you're back in the valley, what
• 16:04
  Speaker 1: is your role? It evolved to be head of UM
• 16:08
  Speaker 1: Mobile effectively, so I was the s VP of Mobile
• 16:13
  Speaker 1: to date myself. This was mostly in the feature phone era.
• 16:17
  Speaker 1: We did a lot of J two me apps, We
• 16:19
  Speaker 1: used whap browsers. Um. Uh, it's like getting flashbacks. Um.
• 16:27
  Speaker 1: The I left Yahoo two months after the app store launched. Okay,
• 16:32
  Speaker 1: so so we were but we were there on Jerry
• 16:36
  Speaker 1: was on stage with Steve when the iPhone launched. Yeah,
• 16:39
  Speaker 1: who was a big part of that launch. UM Yahoo
• 16:43
  Speaker 1: Mail was embedded in the service and to the Yahoo
• 16:46
  Speaker 1: the stocks and weather apps, though they were called widgets
• 16:50
  Speaker 1: back then by Apple. We're all powered by Yahoo. So, um,
• 16:54
  Speaker 1: what's when we knew the world had changed? Like the
• 16:56
  Speaker 1: first day when iPhones actually hit the market in June
• 17:00
  Speaker 1: two thousand seven. You may remember this, but they went
• 17:03
  Speaker 1: on sale at six pm, but six pm and each
• 17:06
  Speaker 1: time zone. So we sat in California, they were on
• 17:09
  Speaker 1: sale in New York on the East coast, and we
• 17:13
  Speaker 1: just sat with the engineers and just watched the data
• 17:15
  Speaker 1: of people using it, and it just it blew us
• 17:18
  Speaker 1: away because you know, you were like for years the
• 17:21
  Speaker 1: perennial question that someone to ask you. It's probably similar
• 17:24
  Speaker 1: to what was going on streams, Like you could take
• 17:26
  Speaker 1: this story and apply to streaming. But every year, you know,
• 17:29
  Speaker 1: you have your business plan review and Jerry Yang or
• 17:32
  Speaker 1: Terry selling, when is mobile actually finally going to be big?
• 17:35
  Speaker 1: And you're like, it's two years away? Every years, two years.
• 17:39
  Speaker 1: The analogy I always use is digital photography. We heard
• 17:42
  Speaker 1: for ten years the digital photography is going to come
• 17:44
  Speaker 1: in and kill Kodak, and then all of a sudden,
• 17:47
  Speaker 1: one year it happened everything and it's like wow, And
• 17:51
  Speaker 1: when iPhone happened and we and we had you know,
• 17:54
  Speaker 1: we've seen blackberries were the most used devices for mobile
• 17:57
  Speaker 1: internet then, but they were really horrible for mobile internet.
• 18:01
  Speaker 1: You know, they weren't designed for it, but but most
• 18:04
  Speaker 1: people had them were being their companies were paying for
• 18:06
  Speaker 1: their data, so you'd use it anyway. And then iPhone
• 18:10
  Speaker 1: came in and despite their being you know how many
• 18:13
  Speaker 1: few devices actually went online that day is like these
• 18:16
  Speaker 1: spikes and we all sat around like the world changed,
• 18:19
  Speaker 1: changed forever, and that, by the way, it's what changed
• 18:22
  Speaker 1: for music as well. I mean the iPhone smartphones are
• 18:26
  Speaker 1: really the foundation of a streaming of the streaming evolution
• 18:29
  Speaker 1: over the last ten years. Okay, looking at Yahoo which
• 18:33
  Speaker 1: has now been sold, what's it savable? And if it
• 18:38
  Speaker 1: was savable, what should they have done differently? Was it savable?
• 18:43
  Speaker 1: I don't think it was by the time. By the
• 18:46
  Speaker 1: time it got to that point, I think Yahoo suffered.
• 18:49
  Speaker 1: And one of the things that attracted me about coming
• 18:51
  Speaker 1: to Amazon, um it never had the kind of visionary CEO.
• 18:58
  Speaker 1: Jerry is an amazing guy, for he's never the CEO,
• 19:01
  Speaker 1: never wanted to be, and he was only when he
• 19:03
  Speaker 1: was forced to because there was no one else who
• 19:05
  Speaker 1: wanted the job. Um he's an amazing guy, and uh
• 19:10
  Speaker 1: had a good had a really good vision, but he
• 19:13
  Speaker 1: he wasn't the CEO that could just galvanize the whole
• 19:16
  Speaker 1: company behind it. And and yeah, who got stuck. Are
• 19:18
  Speaker 1: we a media company or a technology company? And it
• 19:20
  Speaker 1: was never never land Um had it decided that years before?
• 19:25
  Speaker 1: Perhaps savable, but I think by the time Jerry became CEO,
• 19:29
  Speaker 1: I don't think it was. And you could see look
• 19:31
  Speaker 1: at the succession of CEOs after that, they all followed
• 19:34
  Speaker 1: despite saying they were doing a new strategy, was pretty
• 19:36
  Speaker 1: much the same strategy. And Terry Summel big mistake or
• 19:41
  Speaker 1: nothing he could done. I love Terry, Terry is a
• 19:44
  Speaker 1: great guy. I don't want to I'm not here to talk,
• 19:47
  Speaker 1: you know. No, It's just interesting because we see this
• 19:49
  Speaker 1: in the music business, both famously with Andy lack Now
• 19:53
  Speaker 1: I was back in the news business. Came in and
• 19:56
  Speaker 1: he really didn't understand the business. So we look at
• 19:58
  Speaker 1: Terry Semmel, who came from enter Tinman. Was he a
• 20:01
  Speaker 1: fish out of water and really did not understand the
• 20:03
  Speaker 1: technology business? Um. You know, I think they're probably people
• 20:08
  Speaker 1: who are in better position to answer that than me.
• 20:10
  Speaker 1: To be honest with you, I didn't work that closely
• 20:11
  Speaker 1: with Terry Um. I was off kind of doing my
• 20:14
  Speaker 1: own thing in mobile and he was okay. So you
• 20:17
  Speaker 1: wake up one day on a plane and say I'm
• 20:18
  Speaker 1: done at Yahoo. Uh. It was coming for a while
• 20:22
  Speaker 1: longer than that. You know, the company got bigger, and UM,
• 20:29
  Speaker 1: I don't know, just I kind of had an itch
• 20:31
  Speaker 1: to go do something smaller. I think politics had changed
• 20:34
  Speaker 1: in the company. It wasn't as fun as it once was.
• 20:37
  Speaker 1: Um and uh I kind of waited around, you know,
• 20:41
  Speaker 1: because I remember Microsoft bid for Yahoo and a hostile
• 20:44
  Speaker 1: takeover thing, and then carl Icon got involved. And that
• 20:48
  Speaker 1: was a moment where you like, I never thought I'd
• 20:50
  Speaker 1: worked for a company that carl Icon was making a
• 20:53
  Speaker 1: bid for it. Just it just it was time. It
• 20:56
  Speaker 1: was time to do something different. And the next step
• 20:59
  Speaker 1: was so I went to a couple of different startups.
• 21:02
  Speaker 1: I really wanted to be CEO of something, and so
• 21:06
  Speaker 1: I went to one company that I stayed in the
• 21:08
  Speaker 1: mobile world, and it was a social networking app that
• 21:11
  Speaker 1: had taken off. I was on feature phones and um
• 21:15
  Speaker 1: that was it was called meg thirty three, and you know,
• 21:19
  Speaker 1: Android was almost non existent at this point. This is
• 21:21
  Speaker 1: now fall of two eight, Um and Uh. It had
• 21:27
  Speaker 1: taken off in places like Indonesia, India, Malaysia, a little
• 21:31
  Speaker 1: bit in South Africa, and we ended up moving the
• 21:36
  Speaker 1: company to Singapore because it was just I didn't move
• 21:40
  Speaker 1: with it. Um. Well, it was the motivation. It was
• 21:43
  Speaker 1: impossible to run a company in that part of the
• 21:45
  Speaker 1: world from California. It was just happenstance that the customers
• 21:49
  Speaker 1: were there. The r poo's out of those customers don't
• 21:51
  Speaker 1: support California engineering costs. Um, you're not close. You know.
• 21:56
  Speaker 1: The thing is, none of our engineers are. Probably people
• 21:59
  Speaker 1: really used the product because it was a social networking thing.
• 22:01
  Speaker 1: They're all on Facebook and there, so they don't know
• 22:06
  Speaker 1: their own product in a way that you can only
• 22:08
  Speaker 1: know you in the internet. If you don't, if you're
• 22:10
  Speaker 1: not close to your customer, you're just not gonna have
• 22:12
  Speaker 1: a successful service. And uh so it started to languish
• 22:16
  Speaker 1: in terms of product innovation, so we decided to move
• 22:18
  Speaker 1: it there. It ultimately Um that company ultimately got listed
• 22:21
  Speaker 1: on the Australian Exchange and then got bought out and
• 22:24
  Speaker 1: I'm not sure what's going on with it, and kept
• 22:26
  Speaker 1: up with it, um. And then I went to another
• 22:28
  Speaker 1: company called Looped, which was one of the original apps
• 22:32
  Speaker 1: around social location sharing and social location sharing, which ultimately
• 22:39
  Speaker 1: got sold. Um. You know the name of that was
• 22:42
  Speaker 1: that was looped l O O P T. Yeah, it
• 22:46
  Speaker 1: ultimately got sold. Um mainly that the company had its
• 22:51
  Speaker 1: moment in the sun, like internet companies do or consumer
• 22:54
  Speaker 1: companies do, and they either kind of continue on that
• 22:56
  Speaker 1: trajectory they flat line, it started to flat line, and
• 23:00
  Speaker 1: it got it got bought out, primarily for the tech
• 23:02
  Speaker 1: talent that was in the company. That's an Amazon called.
• 23:09
  Speaker 1: We'll take a quick break and come back with more
• 23:11
  Speaker 1: of my conversation with VP of the Amazon Music Steve Boom,
• 23:15
  Speaker 1: recorded live at the Music Media Summit in Santa Barbara,
• 23:18
  Speaker 1: California this week. I'm speaking with Steve Boom. Over the
• 23:25
  Speaker 1: last couple of months, I've interviewed the lead singer of
• 23:27
  Speaker 1: Free and Bad Company, Paul Rodgers, and social media expert
• 23:31
  Speaker 1: at U t A. Kendall Lostro. We try to provide
• 23:35
  Speaker 1: a balance of entertaining and informative content for you here
• 23:38
  Speaker 1: on the Bob Left Steps podcast. Be the first to
• 23:41
  Speaker 1: hear next week's episode by subscribing to the podcast on
• 23:44
  Speaker 1: tune in, Apple Podcast or your podcast Apple choice. While
• 23:49
  Speaker 1: you're there, please rate and review the podcast. Okay, let's
• 23:54
  Speaker 1: get back to my conversation with Steve Boom, Amazon called
• 23:59
  Speaker 1: you what was the gig they were looking for you
• 24:02
  Speaker 1: to fill. Well, it's kind of a funny story, um,
• 24:06
  Speaker 1: at least for me. Uh. They called said, well, we're
• 24:09
  Speaker 1: starting to invest heavily in digital media. This is two
• 24:11
  Speaker 1: thousand eleven and so um the Prime Video service had
• 24:16
  Speaker 1: only recently launched and the Amazon Cloud locker had just
• 24:22
  Speaker 1: recently launched and I and I remember reading about that
• 24:24
  Speaker 1: because it caused a bit of kerfuffle in the industry
• 24:27
  Speaker 1: because it was unlicensed, and I think that's why it
• 24:30
  Speaker 1: made all the tech news. And they said, look, we're
• 24:33
  Speaker 1: we're investing in digital media. We're looking for some executives
• 24:36
  Speaker 1: to come build this out. And I said, well, you
• 24:39
  Speaker 1: can see from my LinkedIn that I don't have any
• 24:43
  Speaker 1: background in music or video. And the answer was, yes,
• 24:48
  Speaker 1: that's probably that's probably not a bad thing. And their
• 24:52
  Speaker 1: view was, you know, at a company like Amazon, you know,
• 24:56
  Speaker 1: your traditional music industry exactly, the hit rate was going
• 24:59
  Speaker 1: to be low for them to succeed at a company
• 25:01
  Speaker 1: like Amazon. Um, they really wanted someone more with a
• 25:04
  Speaker 1: more tech background because that the roles involved running engineering
• 25:07
  Speaker 1: teams and product teams and someone maybe came from a
• 25:10
  Speaker 1: more data driven background. And so what was your were
• 25:13
  Speaker 1: your responsibilities when you finally got the gig and went
• 25:16
  Speaker 1: into the building. Well before I joined, I thought it
• 25:19
  Speaker 1: was gonna be all of music, including physical music. Um.
• 25:26
  Speaker 1: But I had dinner with my boss a month before
• 25:28
  Speaker 1: I joined, said, Hey, I just won't let you know.
• 25:30
  Speaker 1: There's a re orc coming. The company's gonna split out,
• 25:34
  Speaker 1: split the physical and digital businesses altogether, not just in music,
• 25:37
  Speaker 1: but across the board. Just realize how fundamentally different they
• 25:40
  Speaker 1: are other than the fact that your partners are the same, um,
• 25:43
  Speaker 1: but from a running a business perspective, they're They're just
• 25:46
  Speaker 1: totally different. Uh. And he said, I don't I doubt
• 25:50
  Speaker 1: if you're too upset about not having to run the
• 25:52
  Speaker 1: physical business. And I was like, you know, I'm just
• 25:55
  Speaker 1: excited to be joining Amazon. Whatever, It's fine. So my
• 25:59
  Speaker 1: when I joined, my my my role and was and
• 26:01
  Speaker 1: continues to be to run Amazon's digital music business, um
• 26:06
  Speaker 1: from soup to nuts. And that's the way the company
• 26:08
  Speaker 1: organizes itself. It really has true general managers that have
• 26:13
  Speaker 1: product and engineering and marketing and finance and business development
• 26:17
  Speaker 1: and you know, licensing, label relations. All that stuff rolls
• 26:20
  Speaker 1: up into a single leader and that's the way the
• 26:22
  Speaker 1: company has always organized itself. Now there's a point where
• 26:25
  Speaker 1: you go to Bezos with a pitch. Why don't you
• 26:28
  Speaker 1: tell that story? Well, I mean we, um, you know,
• 26:35
  Speaker 1: we Amazon had been in digital music since two thousand seven,
• 26:37
  Speaker 1: it launched the MP three stores, the first first guy
• 26:40
  Speaker 1: to launch with DRM. Without DRM, I should say, um,
• 26:45
  Speaker 1: but you know, honestly, had had had modest success in
• 26:50
  Speaker 1: in the download business, and um, it was clearly a
• 26:54
  Speaker 1: segment that was being fairly well dominated by one player
• 26:57
  Speaker 1: given the device ecosystem, we knew we needed to get
• 27:00
  Speaker 1: into streaming. And the pitch was when I basically just
• 27:03
  Speaker 1: you know, basically kind of described with Prime Music, which is, um, Jeff,
• 27:09
  Speaker 1: we should get into streaming. That's where our customers are going.
• 27:11
  Speaker 1: And they know Amazon everything is customer first, customer first,
• 27:14
  Speaker 1: customer first. We saw what our customers were doing, and uh,
• 27:18
  Speaker 1: you know, we had seen that Prime the Prime Video service,
• 27:20
  Speaker 1: this is you know, this was now we're in early
• 27:23
  Speaker 1: the time frame that I'm talking about, and and um,
• 27:26
  Speaker 1: we could tell that Prime Video seemed to be getting
• 27:28
  Speaker 1: traction and the company was starting to invest more in
• 27:31
  Speaker 1: the Prime Video service and was really starting to put
• 27:33
  Speaker 1: its weight behind it UM. And you know, Jeff, we
• 27:38
  Speaker 1: we had talked to him before, like how do you
• 27:40
  Speaker 1: consider what do you think about adding things to Prime?
• 27:44
  Speaker 1: And you know, obviously the things you want to add
• 27:46
  Speaker 1: to a service like Prime or things that have broad appeal,
• 27:50
  Speaker 1: and what has broader appealed in music? Really nothing? And
• 27:55
  Speaker 1: people have been speculating for a long time, when is
• 27:58
  Speaker 1: Amazon going to add a music service to Prime? When
• 28:00
  Speaker 1: you know it's got to be coming soon, and so
• 28:03
  Speaker 1: we do what you do at Amazon. We spent several months.
• 28:07
  Speaker 1: We have a certain process that we follow there which
• 28:09
  Speaker 1: is different than another companies. And what we do is
• 28:15
  Speaker 1: we write a press release, one page press release of
• 28:20
  Speaker 1: explain to the consumer what you're about to launch, and
• 28:23
  Speaker 1: you polish that because if you can't do that, then
• 28:25
  Speaker 1: you don't know what you know, you haven't figured out
• 28:26
  Speaker 1: what is you want to do. And then behind that
• 28:29
  Speaker 1: one page press release UM, we call this document a
• 28:32
  Speaker 1: p R f a Q. There's an f a Q
• 28:34
  Speaker 1: Frequently Asked Questions section after that, and you write your
• 28:37
  Speaker 1: own questions and answers, and then we call a meeting
• 28:40
  Speaker 1: UM and there's then financial support and exhibits and all
• 28:43
  Speaker 1: that kind of stuff, and we call a meeting, and
• 28:45
  Speaker 1: we called a meeting with Jeff um with our CFO
• 28:47
  Speaker 1: at the time, um kind named Tom Scoot Tach who
• 28:51
  Speaker 1: is not our Brian. ALSOFSKI is the currency, a CFO,
• 28:54
  Speaker 1: and and a couple and several other you know, senior
• 28:57
  Speaker 1: leaders at the company spent ninety minutes first thirty minutes
• 29:02
  Speaker 1: of that meeting. You know, it's a bunch of middle
• 29:05
  Speaker 1: aged people with reading glasses sitting around staring at this
• 29:08
  Speaker 1: document and reading it because we don't we don't power
• 29:11
  Speaker 1: point at Amazon. We don't believe in it. Except if
• 29:14
  Speaker 1: I were, if I were giving you a speech, I
• 29:15
  Speaker 1: would power point. But then what's the difference. Why no
• 29:17
  Speaker 1: power point inside the building and power point outside the building? Well,
• 29:21
  Speaker 1: because if you're if the purpose of a meeting is
• 29:24
  Speaker 1: to to make a decision, power points are not a
• 29:27
  Speaker 1: good it's not a good meeting is a good way
• 29:28
  Speaker 1: to tell a story and present something, But if you
• 29:32
  Speaker 1: want to make a decision, you know there's two things.
• 29:35
  Speaker 1: One empower point. It's really easy to have bullet points
• 29:39
  Speaker 1: and to b as your way through things, right, It's
• 29:41
  Speaker 1: like try to do that when you have to write
• 29:43
  Speaker 1: complete sentences in a paragraph form and make it a
• 29:46
  Speaker 1: narrative that stretches over six pages. You find yourself testing
• 29:49
  Speaker 1: your your own thinking is refined and refined and refined
• 29:52
  Speaker 1: until it all hangs. The other part is when you
• 29:54
  Speaker 1: give a presentation. If we were to try to decide
• 29:57
  Speaker 1: something in this room, all of us together, some of
• 30:00
  Speaker 1: you would know what I'm talking about before I even
• 30:02
  Speaker 1: got up here, maybe more than I do. And then
• 30:05
  Speaker 1: some of you would know nothing about the topic, and
• 30:07
  Speaker 1: I'd be trying to give a presentation. Hands would be
• 30:10
  Speaker 1: going up, and you'd be asking questions about slide twenty seven,
• 30:13
  Speaker 1: even though on slide seven, and there's someone who's still
• 30:15
  Speaker 1: trying to figure out slide three, and you have a
• 30:18
  Speaker 1: complete mismatch of information. So the conversation is not even handed.
• 30:23
  Speaker 1: And so what happens. The way we do things. You
• 30:26
  Speaker 1: walk into the room, you hand out this, you make whatever,
• 30:29
  Speaker 1: twin copies, twenty copies. However, however, many people are in
• 30:32
  Speaker 1: the meeting, and we all then read. And the idea
• 30:36
  Speaker 1: is when we're done reading, some people will still have
• 30:39
  Speaker 1: more information than others, but everyone will have the same baseline,
• 30:42
  Speaker 1: and that baseline should be sufficient to make the decision
• 30:45
  Speaker 1: that we're asking you to make, UM, and so we'll
• 30:48
  Speaker 1: all sit there and read it ahead of time. And
• 30:50
  Speaker 1: I heard Jeff explain why don't you read it in advance?
• 30:53
  Speaker 1: I think there's two answers, one as no one has time,
• 30:56
  Speaker 1: and the other is and this I laughed when I
• 30:58
  Speaker 1: heard this, because I was just listening to this um
• 31:00
  Speaker 1: in some speech he gave recent. He said, because everyone
• 31:03
  Speaker 1: in the room is really smart, and they won't read
• 31:05
  Speaker 1: it ahead of time, but then they'll b as their
• 31:07
  Speaker 1: way through it and act like they did. And so
• 31:10
  Speaker 1: this way you're forced to sit there and you know,
• 31:13
  Speaker 1: what else are you gonna do? You know, there's this
• 31:14
  Speaker 1: thing in front of you. So we spent ninety minutes. Uh,
• 31:17
  Speaker 1: and so once again, how long are do people spend reading?
• 31:20
  Speaker 1: Thirty minutes? Okay? But I just remember, you know, like
• 31:23
  Speaker 1: being in school, you're always uptight or you fast? Are
• 31:25
  Speaker 1: you slow? You're gonna be ahead of this person. It's
• 31:28
  Speaker 1: almost like you feel a pressure. You know, we're we're
• 31:32
  Speaker 1: all friends and colleagues. So um, you know, you wait
• 31:36
  Speaker 1: if your if it's your meeting, you kind of look
• 31:38
  Speaker 1: around and you say, okay, it looks like does anyone
• 31:40
  Speaker 1: need more time, or sometimes you'll say, look, we're gonna
• 31:43
  Speaker 1: read for thirty minutes and then and we're going to
• 31:45
  Speaker 1: talk after that, and yeah, if you haven't read every word,
• 31:48
  Speaker 1: it's not the end of the world. And then we
• 31:50
  Speaker 1: talked about it for the next I think it was
• 31:52
  Speaker 1: a ninety minute meeting probably, and they asked a bunch
• 31:54
  Speaker 1: of questions, talked about the numbers, etcetera, etcetera. The product
• 31:59
  Speaker 1: that merrily and okay, let's do this. And you know
• 32:04
  Speaker 1: that's for me pre remarkable. I've worked in a number
• 32:06
  Speaker 1: of places and too. It was you know, we we
• 32:10
  Speaker 1: had prepared. So it's not like we didn't come in
• 32:12
  Speaker 1: half prepared, because that could have been a go back
• 32:14
  Speaker 1: and think about this and that and the other thing.
• 32:16
  Speaker 1: But it was, you know, we thought about it, thought
• 32:18
  Speaker 1: it through and uh had a decision taken in in
• 32:22
  Speaker 1: that meeting and lunch. You know, everybody at this point
• 32:25
  Speaker 1: you talk about a CEO with vision at this point,
• 32:29
  Speaker 1: with the death of Steve Jobs, in the retirement of
• 32:31
  Speaker 1: other people, uh, the two people two people people focus
• 32:35
  Speaker 1: on our elon Musk and Bezos. So of all the
• 32:39
  Speaker 1: CEO as you've dealt with, what does Jeff do differently. Um,
• 32:46
  Speaker 1: I think he's just is he very demanding? It's very
• 32:50
  Speaker 1: great clarity. Uh, And I think he he talks the
• 32:55
  Speaker 1: talk and walks the walk. So we we've set out
• 32:57
  Speaker 1: broad principles that we we managed by at the company.
• 33:01
  Speaker 1: He reiterates them, Um, explains them when he feels necessary.
• 33:07
  Speaker 1: But mostly what I think he does that's great is
• 33:10
  Speaker 1: he he lets his leaders lead. So if we were
• 33:13
  Speaker 1: to get him on the phone right now and we
• 33:15
  Speaker 1: were to talk about some details of Amazon Music, would
• 33:18
  Speaker 1: he be familiar with those? He dives down into all
• 33:23
  Speaker 1: the product verticals. So from the time you decided that
• 33:28
  Speaker 1: you wanted to do this until you gotta yes, how
• 33:30
  Speaker 1: long was that? Uh? Well, the time the yes was
• 33:36
  Speaker 1: in that meeting, I don't know when I'm talking about
• 33:38
  Speaker 1: from the time you said months, a few months, don't know.
• 33:41
  Speaker 1: And then you built everything from scratch. You didn't buy anything. No,
• 33:44
  Speaker 1: we haven't bought anything in music. But that's interesting because
• 33:48
  Speaker 1: everybody else is buying services. You know, Apple bought beats
• 33:52
  Speaker 1: and other things to give it leg up. Why do
• 33:55
  Speaker 1: you decide with certain players in the marketplace that you're
• 33:57
  Speaker 1: going to start from scratch. There's lots of reasons. I mean,
• 34:02
  Speaker 1: you know, well, now we already have an infrastructured so
• 34:06
  Speaker 1: if I were buying something, it would be to buy subscribers.
• 34:08
  Speaker 1: I haven't come across other than the biggest of the
• 34:12
  Speaker 1: big I haven't come across companies that can that can
• 34:15
  Speaker 1: really accelerate our growth. We're doing just fine, thank you,
• 34:17
  Speaker 1: um and UM. But in the earlier days, look, it's
• 34:23
  Speaker 1: you can spend as much time trying to integrate their
• 34:25
  Speaker 1: systems into the Amazon systems as it will take you
• 34:29
  Speaker 1: just to build it from scratch. And uh and you know,
• 34:32
  Speaker 1: so we looked, we did look at companies and either
• 34:35
  Speaker 1: the prices didn't make sense for what you were getting,
• 34:38
  Speaker 1: or we didn't think the technology was all that great. Um.
• 34:41
  Speaker 1: That happens a lot a lot of a lot of startups.
• 34:43
  Speaker 1: You know, the biggest thing when you buy them. And
• 34:46
  Speaker 1: I saw this at Yahoo all the time because y'aha
• 34:48
  Speaker 1: yah who operated an incredible scale. UM. And we bought
• 34:52
  Speaker 1: a lot of companies in the in the late nineties,
• 34:54
  Speaker 1: and the first thing you'd end up doing half the
• 34:56
  Speaker 1: time is having to rebuild half the technology because it
• 34:58
  Speaker 1: just couldn't scale. It's a lot for now because everyone
• 35:01
  Speaker 1: runs on Amazon Web Services, so thinks scale seamlessly. But
• 35:04
  Speaker 1: back then that didn't exist. Um, you know some of
• 35:07
  Speaker 1: the technology some of these companies that are trying to
• 35:10
  Speaker 1: sell themselves, maybe their technology is just based on an
• 35:12
  Speaker 1: older technology stack. You know, they've been around for a
• 35:15
  Speaker 1: few years and they're using older technologies that, yeah, we're
• 35:17
  Speaker 1: gonna have to replace that. So what's the point. And
• 35:20
  Speaker 1: do you hire outside people to build it or you
• 35:22
  Speaker 1: have inside engineers the Amazon to build your music service? Yeah?
• 35:26
  Speaker 1: Now we build it in house and we've we've staffed
• 35:28
  Speaker 1: up our team, but we don't use out we don't
• 35:31
  Speaker 1: use third parties. It's all it's all internal. Okay. So
• 35:36
  Speaker 1: from the time you launch it, at what point is
• 35:39
  Speaker 1: the Echo introduced? Um? Five months later? It turns out,
• 35:45
  Speaker 1: so we launched in June two thousand fourteen Prime Music
• 35:48
  Speaker 1: in the United States. The Echo launched on a beta
• 35:50
  Speaker 1: invitation only basis in November or late October, early to
• 35:55
  Speaker 1: mid November, somewhere in that range two thousand fourteen. And
• 35:58
  Speaker 1: at what point did you feel this is the future?
• 36:03
  Speaker 1: Probably March? And what was what was the lightbulb moment?
• 36:09
  Speaker 1: There are a couple of lifebub moments, um, I mean,
• 36:12
  Speaker 1: the first was just being consumers ourselves and being in
• 36:14
  Speaker 1: the music game. So you know, we had echoes those
• 36:18
  Speaker 1: some of us on the on the on the music
• 36:20
  Speaker 1: team during the when no one knew this product even existed.
• 36:24
  Speaker 1: But it's a beta product, it's an alpha product, and
• 36:29
  Speaker 1: you know, it works and some days it works, some
• 36:31
  Speaker 1: days it doesn't work, like any product that's in development,
• 36:34
  Speaker 1: so you don't really get that full customer experience. The
• 36:37
  Speaker 1: magic wasn't happening just yet. Um. But then you know,
• 36:42
  Speaker 1: once it started shipping, then of course we all had them.
• 36:45
  Speaker 1: And what I tell everybody is because we we've given
• 36:48
  Speaker 1: a lot of people echoes, and you know, when we
• 36:51
  Speaker 1: visit the labels like here, you should have one of this.
• 36:53
  Speaker 1: And what I tell people is if I come back
• 36:55
  Speaker 1: and it's sitting in your office, I'm taking it back
• 36:57
  Speaker 1: with me. Put it in your house, because it's not
• 37:00
  Speaker 1: meant to be in your Office's not that's not where
• 37:02
  Speaker 1: I mean you can put on there. It's great, but
• 37:04
  Speaker 1: if you want to understand the magic of a of
• 37:07
  Speaker 1: the voice interface and you have to have it in
• 37:09
  Speaker 1: your home, it has to be in a an area
• 37:11
  Speaker 1: where you're going about your business doing other things, it's
• 37:14
  Speaker 1: in a high traffic area, it's in a communal area,
• 37:17
  Speaker 1: and so we started using them in our homes, right,
• 37:19
  Speaker 1: And so when it was in beta, we weren't really
• 37:21
  Speaker 1: using them in our homes because you never know who's
• 37:22
  Speaker 1: gonna pop into your house that kind of thing. So, uh,
• 37:26
  Speaker 1: part of this, we were just consumers and we started
• 37:28
  Speaker 1: to understand the possibility. The other part was we started
• 37:31
  Speaker 1: to look at data and we could see of the
• 37:37
  Speaker 1: very few people that had gotten echoes in the very
• 37:40
  Speaker 1: early part of two thousand fifteen because they were in
• 37:42
  Speaker 1: very short supply, um, just how much they were being
• 37:48
  Speaker 1: used for music, and the different ways in which they're
• 37:53
  Speaker 1: being used for music, the ways the way people that
• 37:55
  Speaker 1: the ways that people are asking to to have Alexa
• 37:58
  Speaker 1: play music for them, in many cases very different than
• 38:01
  Speaker 1: you would expect them to do if they had a
• 38:04
  Speaker 1: visual app like an iPhone or an Android app. And
• 38:07
  Speaker 1: that's when we kind of realized and put all that
• 38:09
  Speaker 1: stuff together like this is this is profound. And I've
• 38:15
  Speaker 1: been around the block a couple of times and I've
• 38:16
  Speaker 1: seen these platforms shifts happen, and it was Okay, I
• 38:20
  Speaker 1: remember the shift from you know, uh button to touch
• 38:24
  Speaker 1: interface and and the impact that had fundamentally and mobile,
• 38:29
  Speaker 1: and we just started to you know, extrapolate out and
• 38:32
  Speaker 1: dream a little bit and say, you know, is voice
• 38:36
  Speaker 1: that level of of of a shift in platform and
• 38:40
  Speaker 1: the way people compute interact with computers, And you know,
• 38:45
  Speaker 1: we thought it would be, and particularly we thought it
• 38:48
  Speaker 1: would be for interacting with digital media, because we just
• 38:51
  Speaker 1: once you use it, you're like, it's just easier, it's
• 38:54
  Speaker 1: so much better. It's you know, there's so much less friction.
• 38:57
  Speaker 1: The first time. I'm sure all of you guys have
• 38:59
  Speaker 1: have you voice controls at some point, but man, the
• 39:03
  Speaker 1: first time you show someone of any technical background from
• 39:09
  Speaker 1: my mother in law to an engineer. She's not an engineer,
• 39:14
  Speaker 1: by the way, so I mean like she's got the
• 39:15
  Speaker 1: less technical background of those two people, and you just
• 39:18
  Speaker 1: say Alexa play and name a song and it comes out.
• 39:22
  Speaker 1: That's just magic. And the first time, now it's the
• 39:27
  Speaker 1: best innovation seemed commonplace three or four years later, um,
• 39:31
  Speaker 1: and like, well, of course, but I was not. And
• 39:33
  Speaker 1: of course a few years ago and it truly that
• 39:36
  Speaker 1: I remember showing to you know, record label executives. Their
• 39:39
  Speaker 1: eyes popped out, you know, and and that magic. Once
• 39:44
  Speaker 1: we understood that magic, we realized this is this is
• 39:46
  Speaker 1: a great this is just the way that you can
• 39:49
  Speaker 1: interact with digital media. It's just better. And do you
• 39:51
  Speaker 1: think at this point the music industry is up to
• 39:55
  Speaker 1: speed on what a huge breakthrough this is at this
• 39:59
  Speaker 1: point now and the eighteen Oh yeah, totally. Do you
• 40:02
  Speaker 1: think people understand that because there have been historically late
• 40:05
  Speaker 1: to everything, whether it be file trading, digital download streaming. Yeah,
• 40:10
  Speaker 1: I gotta say I, you know you're right, And UM,
• 40:13
  Speaker 1: I have to you know, I I'm not getting paid
• 40:16
  Speaker 1: to say this, but I have to take my hat
• 40:18
  Speaker 1: off to the labels because we went to go talk
• 40:21
  Speaker 1: about Amazon Music Unlimited in the very beginning of two
• 40:24
  Speaker 1: thousand and sixteen, so this is after the very first
• 40:27
  Speaker 1: Echo Christmas, but it was a smallish Echo Christmas. The
• 40:30
  Speaker 1: device was a year old, and you know, we went
• 40:33
  Speaker 1: to go pitch them on the deals and we came
• 40:35
  Speaker 1: with suitcases full of Echoes to hand out to everybody,
• 40:38
  Speaker 1: and I gave my little speech. But what we found
• 40:41
  Speaker 1: was that to a t or two to a person,
• 40:45
  Speaker 1: rather they had all bought them already. They had gifted
• 40:48
  Speaker 1: them to friends over the over the holiday they all
• 40:52
  Speaker 1: were super up to date on it and understood the opportunity, so,
• 40:57
  Speaker 1: you know, very collaborative conversations from the get go. It
• 41:01
  Speaker 1: wasn't It wasn't I think what maybe conversations were in
• 41:05
  Speaker 1: previous generations, and I think that's a lot of streaming
• 41:09
  Speaker 1: obviously was advancing, and the label saw that, um, this
• 41:13
  Speaker 1: was going to be their business going forward. And then
• 41:15
  Speaker 1: they saw this device and I think they used it
• 41:17
  Speaker 1: as consumers and they understood the power of it. Well,
• 41:20
  Speaker 1: I just know this is one of the products that
• 41:22
  Speaker 1: was sold by word of mouth. First of all, there
• 41:24
  Speaker 1: was theoretically limited availability, but yeah, I was liking theoretically
• 41:29
  Speaker 1: I'll tell you know, I'll tell you I So I
• 41:31
  Speaker 1: had one, but I ordered it in November when it
• 41:33
  Speaker 1: first came out in novemb It showed up on my
• 41:36
  Speaker 1: doorstep in May the following year, so it really was limited.
• 41:40
  Speaker 1: It started to be they ramped up production, you know
• 41:42
  Speaker 1: that year at some point, well, Gary Dela bat I
• 41:45
  Speaker 1: was talking to Me's really in the producer of the
• 41:46
  Speaker 1: Howard Stern Show, and he's it was such zeal I
• 41:50
  Speaker 1: had to get one, and it was sort of like,
• 41:53
  Speaker 1: first of all, we're more of a software era than
• 41:55
  Speaker 1: a hardware era. But his excitement made me feel that
• 41:58
  Speaker 1: I wanted to get one same thing. In terms of
• 42:01
  Speaker 1: Amazon Music Unlimited, doesn't seem like there's a lot of
• 42:04
  Speaker 1: advertising outside of the Amazon ecosystem, but talk about the
• 42:10
  Speaker 1: little triggers you have in your system to try to
• 42:13
  Speaker 1: get people to upgrade. Yeah. So, um, you know, one
• 42:19
  Speaker 1: of the things we worked on for the launch was
• 42:21
  Speaker 1: we wanted to make sure the subscription process was as
• 42:25
  Speaker 1: as simple as possible. Um. We obviously, like one of
• 42:29
  Speaker 1: our competitors have you know, customer, lots of customers, credit
• 42:34
  Speaker 1: card accounts. People buy stuff from Amazon, that's what they do.
• 42:37
  Speaker 1: We have a commerce space relationship with them, and um,
• 42:41
  Speaker 1: you know, we wanted to make sure they could just
• 42:43
  Speaker 1: talk to Alexa to subscribe, so you can do that,
• 42:46
  Speaker 1: and um, we're pretty confident that that's the the if
• 42:53
  Speaker 1: this is sounds like an oxymoron, but the most frictionless,
• 42:57
  Speaker 1: the least amount of friction in any subscription that I've
• 42:59
  Speaker 1: are seen. And so one of the things we do.
• 43:02
  Speaker 1: You know, if you were to ask for a track,
• 43:04
  Speaker 1: and say you're a prime member, if you were to
• 43:06
  Speaker 1: ask for a track that's not in Prime Music, so
• 43:09
  Speaker 1: it's not part of those two million odd songs. Um,
• 43:13
  Speaker 1: you would hear Alexas say something like, you know that
• 43:16
  Speaker 1: song is not in Prime Music. It's available in Amazon
• 43:20
  Speaker 1: Music Unlimited along with tens of millions of other songs
• 43:23
  Speaker 1: or something like that. Uh, free trial for thirty days
• 43:29
  Speaker 1: after that as month, should I start your free trial? Yes,
• 43:36
  Speaker 1: that's all you have to say, and music will start playing.
• 43:40
  Speaker 1: And I don't know if it gets an easier than that.
• 43:43
  Speaker 1: And so we do that. And that's that's very effective,
• 43:45
  Speaker 1: you know, because you're it's always more effective to to
• 43:48
  Speaker 1: get someone to upgrade to something when they're in the moment.
• 43:52
  Speaker 1: Then they're already they're already so far down that funnel
• 43:55
  Speaker 1: in consideration that it's it doesn't take a lot to
• 43:57
  Speaker 1: get them over the last hurdle. If if you're having
• 44:00
  Speaker 1: to spend you know, two or fifty million dollars creating
• 44:03
  Speaker 1: a brand for yourself, that's just creating awareness. So once
• 44:07
  Speaker 1: they're on the echo device, you know, we do that.
• 44:09
  Speaker 1: We do things if um, if if you have multiple
• 44:13
  Speaker 1: echoes in your home and say you're listening in one
• 44:15
  Speaker 1: room and your kids listening and wants to listen, well,
• 44:18
  Speaker 1: let's put the other way. Your kids listening in one
• 44:20
  Speaker 1: room and then you're in the other room and you
• 44:21
  Speaker 1: try to listen, and Alex will say, um, you know,
• 44:24
  Speaker 1: because we're limit you're limited to one stream at a
• 44:26
  Speaker 1: time and all these music services, that's that's a condition
• 44:29
  Speaker 1: of the labels. She'd say something like, you know, music
• 44:33
  Speaker 1: is playing on the other device. Um, but if you
• 44:36
  Speaker 1: upgrade to the Family Plan, you can have up to
• 44:37
  Speaker 1: six concurrent streams. And well, it turns out that's pretty effective,
• 44:42
  Speaker 1: you know, um, because if you really want to listen
• 44:44
  Speaker 1: to music and your time, and you maybe didn't even
• 44:46
  Speaker 1: know the Family Plan existed, right, and now he's like,
• 44:49
  Speaker 1: oh cool, well you have four echoes, I got three kids. Great,
• 44:52
  Speaker 1: let's do it. And also, assuming someone's not asking for
• 44:56
  Speaker 1: something that's not in the two million catalog you do
• 44:59
  Speaker 1: have of periodic adds, shall we say them to upgrade?
• 45:05
  Speaker 1: Well we we you know, we communicate with our customers,
• 45:07
  Speaker 1: but Alexa doesn't run ads, so you're communicating saying, hey,
• 45:13
  Speaker 1: this opportunity is here, um through normal like email and
• 45:17
  Speaker 1: push messaging channels, but not there's you know, Alexa's personality
• 45:21
  Speaker 1: is it's very it's it's very carefully guarded. She's not
• 45:25
  Speaker 1: going to be you know, she's not meant there to
• 45:26
  Speaker 1: hawk products, you know, and and she's not meant to
• 45:29
  Speaker 1: be too sales. So if you're just you won't what
• 45:32
  Speaker 1: you won't see is or here I should say. So,
• 45:34
  Speaker 1: if you're listening to a playlist, you're not going to
• 45:38
  Speaker 1: get interrupted in the middle in between songs and say, hey,
• 45:41
  Speaker 1: by the way, there's this thing called am some music
• 45:42
  Speaker 1: on Limit. There's no advertising on Echo and we don't
• 45:45
  Speaker 1: advertise like that either. It's because it's just contextual. There's
• 45:48
  Speaker 1: no pushing of the unlimited service on Alexa unless you
• 45:52
  Speaker 1: ask for something that is not there. Yeah, unless you're
• 45:54
  Speaker 1: unless you're really in the moment of wanting music and
• 45:58
  Speaker 1: we think we can improve your experience. Okay, So, in
• 46:00
  Speaker 1: the world today of selling music, not literally but marketing music,
• 46:06
  Speaker 1: playlists are thought to be king. How does someone enter
• 46:11
  Speaker 1: the Amazon ecosystem and get their songs heard? Um? Well,
• 46:19
  Speaker 1: first of all, we have a team of programmers who
• 46:21
  Speaker 1: are out looking for music and deciding themselves how many
• 46:25
  Speaker 1: people are there? Tensa um and they're out and you know,
• 46:31
  Speaker 1: they're in different cities and assigned to different genres. Um.
• 46:35
  Speaker 1: You know, our country programmers are in are in Nashville,
• 46:38
  Speaker 1: not a big surprise, and um, they're out doing what
• 46:42
  Speaker 1: those guys do. They go out to listen to new
• 46:45
  Speaker 1: bands play and new artists and they listen for music.
• 46:48
  Speaker 1: We obviously meet with the record labels, we meet with
• 46:51
  Speaker 1: artists management, and we get played a lot of music. Um.
• 46:56
  Speaker 1: And you know, it's ultimate editorial decision. You know, what
• 46:59
  Speaker 1: is it that we want to what is it that
• 47:01
  Speaker 1: we want to play? And you know, we'll promote music
• 47:05
  Speaker 1: when it comes. If if there's an artist that we
• 47:07
  Speaker 1: want to get behind, we work with the label to
• 47:09
  Speaker 1: promote them. Um. But ultimately the decision of what and
• 47:12
  Speaker 1: where to put something in a playlist comes down to
• 47:15
  Speaker 1: the editorial team. Okay. But if you're a manager, there
• 47:19
  Speaker 1: is someone you can meet with. Yeah, absolutely okay. And
• 47:23
  Speaker 1: then you subsequently look at the data and there for
• 47:26
  Speaker 1: a massage what gets played and what's not, What gets
• 47:29
  Speaker 1: added and gets dropped from playlist based on the number
• 47:31
  Speaker 1: of streams. Sure, sure, okay. And Amazon has seen someone
• 47:36
  Speaker 1: of as a black hole. Now Spotify is now public,
• 47:39
  Speaker 1: they're releasing a lot of information. First and foremost, if
• 47:42
  Speaker 1: I am an artist on Amazon, do you have a
• 47:45
  Speaker 1: dashboard where I can see all my data? Not at
• 47:48
  Speaker 1: the current time. So well, we eventually we will. We
• 47:51
  Speaker 1: just don't have it yet. We've been more focused on,
• 47:53
  Speaker 1: you know, getting big enough that artists would want to
• 47:56
  Speaker 1: come look at a dashboard on Amazon. Okay, And then
• 47:59
  Speaker 1: you have Apple, as I say, trumpeting how many urban
• 48:02
  Speaker 1: streams they have, And we don't really know what's going
• 48:05
  Speaker 1: on in Amazon. The first question is what is going on?
• 48:09
  Speaker 1: And second is there a way for us to find
• 48:12
  Speaker 1: out on a regular basis. I can't come here every day. Sorry, Um,
• 48:19
  Speaker 1: what is going on? Lots of lots is going on.
• 48:22
  Speaker 1: But yeah, as a company, we tend to be more
• 48:25
  Speaker 1: reticent to share data. Is just across the board. I
• 48:28
  Speaker 1: value my job, so I try not to share too much. Um.
• 48:33
  Speaker 1: Ultimately we we we will, uh created an avenue for
• 48:39
  Speaker 1: for artists to see what's going on in real time.
• 48:41
  Speaker 1: I mean, we obviously give reports to all the labels
• 48:44
  Speaker 1: and so the labels know what's going on in our service. Um,
• 48:48
  Speaker 1: but we we don't make it as public as some
• 48:50
  Speaker 1: of the other services. We also don't just generally beat
• 48:54
  Speaker 1: our chest as much and try to like you know,
• 48:57
  Speaker 1: talk about how many streams x artists did in the
• 48:59
  Speaker 1: first weekend just sort of not it's just not really
• 49:02
  Speaker 1: what we do as much. We'll pause here for a
• 49:10
  Speaker 1: brief moment and get right back to VP of the
• 49:12
  Speaker 1: Amazon Music Steve Boom. As most of you know, I'm
• 49:17
  Speaker 1: a writer and you can read my work at left
• 49:19
  Speaker 1: sets dot com in addition to reading my commentary on
• 49:23
  Speaker 1: music tech in the world at large. Will be the
• 49:25
  Speaker 1: first to find out when we've published a new podcast.
• 49:28
  Speaker 1: Go to left sets dot com and sign up for
• 49:30
  Speaker 1: the news letter. Now more of the VP of the
• 49:34
  Speaker 1: Amazon Music Steve Boom, recorded live the Music Media Summit
• 49:38
  Speaker 1: in Santa Barbara, California. What can you say? We talked
• 49:45
  Speaker 1: about this a little earlier, and I'll use the word counterintuitive.
• 49:49
  Speaker 1: What do we learn about what's happening on the Amazon
• 49:51
  Speaker 1: service as opposed to its competitors. UM, I'm not even
• 49:59
  Speaker 1: sure how to answer. That's such a broad question. Specifically,
• 50:02
  Speaker 1: are there different genres that are emphasized? Uh, yeah, you'll
• 50:07
  Speaker 1: see different Like I said, you'll see different genres. Um.
• 50:11
  Speaker 1: I can look at our charts. They just they look
• 50:13
  Speaker 1: very different. They look wildly different. Would you say, therefore,
• 50:17
  Speaker 1: that Amazon is reaching a different segment of the public
• 50:20
  Speaker 1: or a more representative segment of the public. Uh, that's
• 50:25
  Speaker 1: a tough question to answer. I think it's a broader
• 50:28
  Speaker 1: cross section of the public. Um, if your goal is
• 50:32
  Speaker 1: to be, you know, a service for the most popular
• 50:37
  Speaker 1: music right now in terms of streaming, you know, then
• 50:40
  Speaker 1: you're going to be focused on nothing but hip hop. Um,
• 50:45
  Speaker 1: I think it's a more representative cross section of of
• 50:48
  Speaker 1: the country. And you know, also, I can tell you know,
• 50:51
  Speaker 1: if you think about Amazon and our customer base. At
• 50:56
  Speaker 1: our core, we sell people things, and there were our
• 51:00
  Speaker 1: average customer buys things. Therefore has disposable income and a
• 51:07
  Speaker 1: credit card. So therefore our customer base excuse a bit
• 51:11
  Speaker 1: older than the other guys. That doesn't mean it's old,
• 51:15
  Speaker 1: It just means it starts more at a young adult
• 51:17
  Speaker 1: and goes up from there. Right, we're we don't have
• 51:22
  Speaker 1: a free tier, so well, essentially you do because it's
• 51:26
  Speaker 1: baked into the now nine Amazon Prime that you have
• 51:32
  Speaker 1: to be a Prime member and that's not an unlimited
• 51:35
  Speaker 1: basil said, you know, they're a hundred million Prime members
• 51:38
  Speaker 1: that global number. Yeah, right, Well, how many countries is
• 51:40
  Speaker 1: Amazon Music in at this point around forty and you
• 51:45
  Speaker 1: can get unlimited in all those forty countries, um, all
• 51:49
  Speaker 1: but one, but that's coming yeah pretty much. Okay, So
• 51:53
  Speaker 1: but essentially it feels free to the consumer unless you
• 51:57
  Speaker 1: have prime. If you have prime, okay, we to of course,
• 52:00
  Speaker 1: the original sales pitch is the two day delivery, which
• 52:03
  Speaker 1: I think with its original prices seventy nine dollars was real.
• 52:06
  Speaker 1: Now that it's going up, you're looking at the add ons. Okay,
• 52:10
  Speaker 1: so what do you see right now? Despite protestations of
• 52:13
  Speaker 1: the minor players, is essentially a three horse race between Apple, Spotify,
• 52:19
  Speaker 1: and Amazon. What do you foresee foreseeing the future relative
• 52:23
  Speaker 1: to the competition of those three UM, I can speak
• 52:30
  Speaker 1: to us. I mean, I I like where we sit.
• 52:33
  Speaker 1: You know, people, you know, we've we've grown pretty dramatically
• 52:37
  Speaker 1: over the last uh two or three years and to
• 52:42
  Speaker 1: the point where you know, it's it's it's quite clear
• 52:45
  Speaker 1: that we're in that small group that you just mentioned.
• 52:48
  Speaker 1: And you know, we think, we think we have a
• 52:52
  Speaker 1: good trajectory and we have a pretty sound strategy. I
• 52:55
  Speaker 1: think there's some secular trends that work in our favors,
• 52:58
  Speaker 1: such as UM this plat form shifts to voice. So
• 53:02
  Speaker 1: you know, we see ourselves continuing to grow pretty rapidly.
• 53:05
  Speaker 1: I know there's this narrative out there that everything in
• 53:10
  Speaker 1: the Internet is a winner take all um. I don't
• 53:14
  Speaker 1: really buy into that when it comes at least to
• 53:16
  Speaker 1: digital media. I can see that where there are you know,
• 53:19
  Speaker 1: where network effects are the strongest thing in your business,
• 53:22
  Speaker 1: like search, um or social networking, you know, arguably it's
• 53:29
  Speaker 1: winner take all, even though there are many very successful
• 53:32
  Speaker 1: social networking companies UM. I don't think that's the case
• 53:35
  Speaker 1: of music. I do think it will be a small
• 53:38
  Speaker 1: number continue to be a small number um of players globally.
• 53:45
  Speaker 1: Is it those three? Is there gonna be a fourth? Ye?
• 53:48
  Speaker 1: I don't know. I don't have a crystal ball. I
• 53:50
  Speaker 1: know that will be up there if we look historically,
• 53:53
  Speaker 1: you know, Google has se Search, Facebook, a lot of
• 53:58
  Speaker 1: companies a dominant players of the marketplace because that's where
• 54:02
  Speaker 1: all your friends are. There is a network effects thing.
• 54:05
  Speaker 1: So I have all the services. I know how to
• 54:08
  Speaker 1: share a song on Spotify. I don't know how to
• 54:11
  Speaker 1: share a song on Apple okay, and I think, and
• 54:13
  Speaker 1: then of course if I share it with someone who's
• 54:15
  Speaker 1: not a member, they can't listen. So I think these
• 54:18
  Speaker 1: are important factors moving towards dominance of one of the services.
• 54:24
  Speaker 1: You don't agree. I don't agree that it's going to
• 54:27
  Speaker 1: be a single No, I wouldn't be doing this if
• 54:30
  Speaker 1: we thought the game was over. Well, I would think that,
• 54:32
  Speaker 1: you know, from an outside observer, I don't mean this
• 54:34
  Speaker 1: in a negative way. I would say that Amazon is
• 54:37
  Speaker 1: the stealth player with both deep pockets, big ecosystem, the
• 54:41
  Speaker 1: prime etcetera. They're the ones. It's they're frequently ignored. Like
• 54:45
  Speaker 1: talk to Daniel Glass, you know, six or eight months ago.
• 54:48
  Speaker 1: He says, you know, the sleeper is Amazon, and he
• 54:50
  Speaker 1: talks about meeting with you with the other team and
• 54:52
  Speaker 1: the people who have been at the forefront from way
• 54:54
  Speaker 1: longer than six But the people have been the forefront
• 54:58
  Speaker 1: have been in serious whatever they talk about Amazon being
• 55:00
  Speaker 1: the sleeper. But by the same time that by the way,
• 55:05
  Speaker 1: but as I say, it's hard to fathom. And one
• 55:08
  Speaker 1: also would say that that's who we have to you know,
• 55:11
  Speaker 1: Spotify as a standalone product. I don't see it as
• 55:14
  Speaker 1: a standalone company. A long way down the line. What
• 55:17
  Speaker 1: we look with the apples, they have everybody's credit card,
• 55:21
  Speaker 1: but who do they market to after they don't have
• 55:23
  Speaker 1: the free tier? And I always go back to the
• 55:26
  Speaker 1: original example of A O L and MSN Network. Everyone
• 55:28
  Speaker 1: thought MSN Network was gonna kill A O L and
• 55:31
  Speaker 1: it did not. So the fact that you have a
• 55:33
  Speaker 1: previous history does not necessarily mean success in the future.
• 55:37
  Speaker 1: In addition, I don't believe there's a visionary leader at
• 55:39
  Speaker 1: Apple where there is a visionary leader at at Amazon. Therefore,
• 55:44
  Speaker 1: it's something I'm certainly paying attention to. But getting off
• 55:47
  Speaker 1: of my little soapbox here, one of the things that
• 55:50
  Speaker 1: amazed me when we met is that if I go
• 55:56
  Speaker 1: on Spotify, which is the big huna this week, they
• 56:00
  Speaker 1: break down the playlist down into certain things, but in
• 56:03
  Speaker 1: reality it's more granular on the Amazon that what you
• 56:06
  Speaker 1: can say like play rockets of can you tell the
• 56:10
  Speaker 1: audience more about that? Yeah, And that's I mean, that's
• 56:13
  Speaker 1: a that's actually what we saw customers doing. Right. So
• 56:17
  Speaker 1: again when we looked at the date of what are
• 56:19
  Speaker 1: people doing on Alexa, the way I think about is
• 56:22
  Speaker 1: if if you have a visual app, your iPhone app,
• 56:25
  Speaker 1: your desktop app, your Android app, it's very powerful, it's
• 56:30
  Speaker 1: also very constrained, right, there's the product. Managers decided how
• 56:34
  Speaker 1: you're going to listen to music, whether you realize it
• 56:36
  Speaker 1: or not. There's a search bar, there's a browse hierarchy
• 56:41
  Speaker 1: of how you browse through music, and they fill the
• 56:44
  Speaker 1: buckets of content for you, and not much not suggesting
• 56:46
  Speaker 1: that's a bad thing. It is what it is, though,
• 56:48
  Speaker 1: and um, that's how you're going to listen to music.
• 56:53
  Speaker 1: When you have a head lit what we call a
• 56:54
  Speaker 1: headless device, just nothing. There's no screen on an Echo.
• 56:59
  Speaker 1: You're completely unconstrained. The way you want to interact with
• 57:03
  Speaker 1: music is limited only by your own imagination. And lo
• 57:07
  Speaker 1: and behold. When people are unconstrained, they act in an
• 57:10
  Speaker 1: unconstrained way, and they ask Alexa things. And you know
• 57:14
  Speaker 1: what we saw was that. The way I like think
• 57:17
  Speaker 1: about is if you read the reviews of the Echo
• 57:18
  Speaker 1: in the early days and still today, you'd see people
• 57:21
  Speaker 1: saying things like I love Alexa, Alexa is my friend,
• 57:25
  Speaker 1: she's my best friend, Alexa is a member of my family.
• 57:28
  Speaker 1: And so we tried to translate, kind of translate that
• 57:31
  Speaker 1: into music and say, well, it makes sense that people
• 57:37
  Speaker 1: are asking for things in a much more natural way
• 57:40
  Speaker 1: than you would get in and app because they think
• 57:42
  Speaker 1: of her as a friend. So they're going to talk
• 57:43
  Speaker 1: to her like you're talking to You're gonna talk to
• 57:45
  Speaker 1: her like you talked to your friend about music. And
• 57:48
  Speaker 1: so people were asking for things. They're asking for songs
• 57:51
  Speaker 1: because they only know a few words to the song.
• 57:53
  Speaker 1: They can't remember the title of the artist. So they
• 57:55
  Speaker 1: asked for by lyrics, They asked for the by mood.
• 57:57
  Speaker 1: They ask you know, play pearl jam from um, play
• 58:02
  Speaker 1: YouTube from the eighties, or play me some sad country music. Um.
• 58:07
  Speaker 1: Or I'm having a dinner party, Alexa, can you play
• 58:09
  Speaker 1: me some music, some jazz? And it's that kind of
• 58:12
  Speaker 1: stuff where it's like music becoming part of what you
• 58:15
  Speaker 1: do and responding to how you think about music. Um,
• 58:19
  Speaker 1: it's not always and and and As great as playlists
• 58:22
  Speaker 1: are and I know they're the currency du jour and
• 58:24
  Speaker 1: maybe for a long time to come, they're not the
• 58:27
  Speaker 1: answer to every type of situation that you find yourself
• 58:31
  Speaker 1: in wanting to listen to music. There's plenty of times
• 58:33
  Speaker 1: you may uh not want to listen to a playlist.
• 58:36
  Speaker 1: And so when you say, you know, play YouTube from
• 58:38
  Speaker 1: the eighties, we just make a playlist on the fly
• 58:42
  Speaker 1: for you. Um, there isn't We don't go deep into
• 58:44
  Speaker 1: We didn't have programmers creating you know, all these things.
• 58:48
  Speaker 1: We spent a lot of time cleaning up metadata. Um,
• 58:51
  Speaker 1: with all respect to the my label friends here or
• 58:54
  Speaker 1: who may listen to a recording of this. Um, metadata
• 58:58
  Speaker 1: sucks and it's a known problem in the industry. It
• 59:01
  Speaker 1: tends to be incorrect or incomplete and certainly insufficient to
• 59:07
  Speaker 1: to to respond to the kind of request that people
• 59:09
  Speaker 1: are asking for. Like, even if all the metadata from
• 59:11
  Speaker 1: the labels were correct, they don't give us metadata that
• 59:13
  Speaker 1: says this song is sad, or this song is happy,
• 59:16
  Speaker 1: this is upbeat, um, this is this is suitable for
• 59:19
  Speaker 1: a dinner party. Right, So that's that's metadata we have
• 59:21
  Speaker 1: to go out and create, and we do that through
• 59:24
  Speaker 1: a combination of brute force with humans and then deep learning.
• 59:28
  Speaker 1: Pretty much every song has metadata beyond writer, etcetera. Yeah,
• 59:34
  Speaker 1: and we've taken we've taken humans to to to to
• 59:38
  Speaker 1: take sample data sets and then use machine learning algorithms
• 59:42
  Speaker 1: to to learn and you apply that against the greater catalog. Obviously,
• 59:46
  Speaker 1: with catalog of tens of millions of tracks, it would
• 59:49
  Speaker 1: take humans years to go do this, Um, but it
• 59:52
  Speaker 1: doesn't take machines years. But then we have human curious
• 59:54
  Speaker 1: that checking in on the mic. No, that one wasn't good,
• 59:57
  Speaker 1: And you're constantly improving the model, and that enables us
• 1:00:02
  Speaker 1: to do more fun things when people talk to Alexa
• 1:00:05
  Speaker 1: and make it more natural. And believe me, we've got
• 1:00:08
  Speaker 1: a long way to go. I mean we've we've scratched
• 1:00:10
  Speaker 1: the surface with what people want. Okay, So when I asked,
• 1:00:13
  Speaker 1: like some rock music for sixty, it creates a playlist
• 1:00:18
  Speaker 1: on the fly. There is no person existing there maybe
• 1:00:21
  Speaker 1: there maybe one. But if there's a pre existing playlist
• 1:00:24
  Speaker 1: that someone, you know, some curator created for something, we
• 1:00:27
  Speaker 1: might pull from there. But we also know you're listening
• 1:00:30
  Speaker 1: habits and um, maybe that's not the right one for you,
• 1:00:33
  Speaker 1: So we'll create one on the fly, and then we'll
• 1:00:35
  Speaker 1: personalize the sequence. So generally speaking, if I'm talking to Alexa,
• 1:00:39
  Speaker 1: I can talk year, I can talk act, yeah, era,
• 1:00:45
  Speaker 1: gen genre, moved, what else? Smooth activity? What are you
• 1:00:49
  Speaker 1: doing right now? You know, go to yoga, you're gonna
• 1:00:52
  Speaker 1: have a dinner party, studying. So there's enough metadata that
• 1:00:56
  Speaker 1: it will then just pull on that metadata to make
• 1:00:58
  Speaker 1: a playlist on the on the fly. And I only
• 1:01:02
  Speaker 1: know this from meeting with you previously. How is anybody's
• 1:01:05
  Speaker 1: supposed to know this or theoretically they're developing a new
• 1:01:08
  Speaker 1: way to interact with Alexa and they're learning a new
• 1:01:10
  Speaker 1: way of thinking about music. Well, the whole idea is
• 1:01:13
  Speaker 1: to make it natural. So, like I said, we're most
• 1:01:16
  Speaker 1: of what we're doing is stuff that people already wanting
• 1:01:18
  Speaker 1: to do. Um. You know, we recently launched the ability
• 1:01:21
  Speaker 1: for you to make playlists just using your voice on Alexa,
• 1:01:26
  Speaker 1: and sure enough, I mean, people were trying to do it.
• 1:01:28
  Speaker 1: It's a very natural thing to want to do in
• 1:01:30
  Speaker 1: a music service. It's pretty complicated to to do by voice,
• 1:01:33
  Speaker 1: but it works really well. And lo and behold, people
• 1:01:37
  Speaker 1: are already trying to do it, so instead of failing
• 1:01:39
  Speaker 1: it now succeeded and so millions of playlists are created
• 1:01:42
  Speaker 1: really really quickly. Um. There are certain things, yeah, that
• 1:01:46
  Speaker 1: you know, people have to learn as possible, but but
• 1:01:50
  Speaker 1: the idea is that you know, by and large, people
• 1:01:52
  Speaker 1: will stumble upon it when when that's how they want
• 1:01:56
  Speaker 1: to listen to music, when that's how they want to
• 1:01:57
  Speaker 1: ask for something. UM. I do think in over time,
• 1:02:01
  Speaker 1: you'll see us another services probably get better at helping
• 1:02:04
  Speaker 1: customers understand what features are available, but most of the
• 1:02:07
  Speaker 1: stuff we've launched to date has been you know, that's
• 1:02:10
  Speaker 1: just how people were already asking for. People were saying
• 1:02:12
  Speaker 1: things like, you know, play me the song that goes
• 1:02:16
  Speaker 1: blah blah blah, whatever the lyric is, and so we
• 1:02:19
  Speaker 1: looked at that. It's like, well that people are failing
• 1:02:21
  Speaker 1: because Alexa couldn't understand that. So we went out and
• 1:02:24
  Speaker 1: created the ability to quickly look through lyrics databases and
• 1:02:28
  Speaker 1: find that song or you know, play the new song
• 1:02:32
  Speaker 1: you know by Mumford and Sons with Daniels here and
• 1:02:35
  Speaker 1: hopefully they're gonna have a new album sometimes soon because
• 1:02:37
  Speaker 1: we've been waiting for three years. Um, I don't know,
• 1:02:41
  Speaker 1: but I'm a big fan. And uh, you know, that's
• 1:02:46
  Speaker 1: really easy to understand when it's the first single off
• 1:02:48
  Speaker 1: the record, But when it's the third track off the
• 1:02:51
  Speaker 1: record that Daniels promoting and that's one at radio right now,
• 1:02:55
  Speaker 1: you know which song is still Alexa pull. They all
• 1:02:58
  Speaker 1: have the same release date from the label. They're all
• 1:03:01
  Speaker 1: have the same release date of the record of the album.
• 1:03:03
  Speaker 1: So you know, we worked with labels and ourselves and
• 1:03:07
  Speaker 1: created this concept of radio impact date in our in
• 1:03:11
  Speaker 1: our metadata for songs, so that when I say because that,
• 1:03:14
  Speaker 1: the whole idea is I was listening to the radio.
• 1:03:16
  Speaker 1: I heard the new song by Mumford and Sons. Don't
• 1:03:18
  Speaker 1: know the title, but it's the one that's on the
• 1:03:19
  Speaker 1: radio that that that Daniel's promoting. Alexa played the new
• 1:03:23
  Speaker 1: song by Mumford and Sons, She's going to know which
• 1:03:25
  Speaker 1: one to get. And so our focus has been primarily
• 1:03:27
  Speaker 1: on things that people are doing already. Um and there's,
• 1:03:30
  Speaker 1: like I said, there's a lot more to come. You know.
• 1:03:32
  Speaker 1: The ideas it should be as natural as speaking to
• 1:03:35
  Speaker 1: your best friend about music. If you and I were
• 1:03:36
  Speaker 1: to go have a beer and just talk about music,
• 1:03:39
  Speaker 1: not about the music business, but about artists and songs
• 1:03:41
  Speaker 1: and stuff. We want Alexa to be able to to
• 1:03:44
  Speaker 1: to hang with you and to and to be your
• 1:03:46
  Speaker 1: guide and to be your friend and to be able
• 1:03:49
  Speaker 1: to respond to that. Well, some of this Stele stuff.
• 1:03:51
  Speaker 1: I know that Randy arranged for us to get some
• 1:03:53
  Speaker 1: echo shows, and I had the default service has Spotify,
• 1:03:58
  Speaker 1: which sorry, most people don't really know how to change.
• 1:04:01
  Speaker 1: But once you got the Echo Show, and it can
• 1:04:03
  Speaker 1: show the lyrics made the default service Amazon Music, because
• 1:04:07
  Speaker 1: I want to see the lyrics. We'll take a quick
• 1:04:14
  Speaker 1: break and come back with more of my conversation with
• 1:04:17
  Speaker 1: VP of the Amazon Music Steve Boom, recorded live at
• 1:04:21
  Speaker 1: the Music Media Summit in Santa Barbara, California. I hope
• 1:04:27
  Speaker 1: you're enjoying listening to this episode of the Bob Left
• 1:04:29
  Speaker 1: Stats podcast. If you want to listen to sound bites
• 1:04:33
  Speaker 1: from the interviews and see some of my guests like
• 1:04:36
  Speaker 1: Shirley me Instid of Garbage or Paul Rodgers of Bad
• 1:04:39
  Speaker 1: Company and Free check it out at tune in on Twitter, Facebook,
• 1:04:44
  Speaker 1: and Instagram. Now more of my chat with the head
• 1:04:48
  Speaker 1: of the Amazon Music Steve Boom on the Bob Left
• 1:04:51
  Speaker 1: and It's podcast. At this point, why don't we open
• 1:04:55
  Speaker 1: it up to questions? Sure people have certain things. Jim
• 1:04:59
  Speaker 1: has the mic once again, Let's try to limit statements
• 1:05:02
  Speaker 1: and make it more about questions for Steve. Here has Steve.
• 1:05:08
  Speaker 1: My question is, as you talk about the ecosystem between
• 1:05:12
  Speaker 1: the Amazon Music streaming service and the Echo do you
• 1:05:15
  Speaker 1: you do you view it more as a feature or product. Um,
• 1:05:21
  Speaker 1: you know, we view Amazon Music as a service. Um.
• 1:05:25
  Speaker 1: You know, Alexa itself is a platform that you can
• 1:05:28
  Speaker 1: or you know, it allows you to have other services available.
• 1:05:32
  Speaker 1: So um, and we Amazon Musics available on iOS, on Android,
• 1:05:38
  Speaker 1: on web, on TV platforms. So you know, we're building
• 1:05:42
  Speaker 1: a self standing music service. It just so happens. Our
• 1:05:46
  Speaker 1: focus is to make it the best voice forward music
• 1:05:49
  Speaker 1: service in the world. We've brought voice controls into our
• 1:05:53
  Speaker 1: mobile phone apps, so on iOS and Android you can
• 1:05:55
  Speaker 1: speak with Alexa. Um. That's how we think we really
• 1:06:00
  Speaker 1: rise above the crowd. Um that it's a service onto itself. Yeah, Stephen,
• 1:06:09
  Speaker 1: you know, Hey Shapiro, I mean, how does everybody's gonna
• 1:06:12
  Speaker 1: mike here? It's a cousin of kind of your core business.
• 1:06:16
  Speaker 1: But I know Amazon was looking at ticketing and ticketing
• 1:06:20
  Speaker 1: in music, and uh maybe the only time Amazon had
• 1:06:24
  Speaker 1: to pull back from entering a new vertical. And I
• 1:06:29
  Speaker 1: don't know if you can give us color of the
• 1:06:32
  Speaker 1: experience that Amazon happened had looking at going into music ticketing,
• 1:06:37
  Speaker 1: and you had entered in Europe, I think, but now
• 1:06:39
  Speaker 1: pretty publicly said hey, we're gonna pull back from that. Uh. Yeah,
• 1:06:44
  Speaker 1: I wish I could give you shed insight. Yeah, we
• 1:06:47
  Speaker 1: we did have a small ticketing business in the UK.
• 1:06:49
  Speaker 1: It really started in the West End with theater, dabbled
• 1:06:53
  Speaker 1: with some concerts. Um I wasn't part of the decision
• 1:06:57
  Speaker 1: process as to why the company pulled out, so I'm
• 1:06:59
  Speaker 1: so I can't really tell you much. But one thing
• 1:07:02
  Speaker 1: a g They had the Hyde Park shows they were
• 1:07:05
  Speaker 1: tied in with his Amazon last summer and they said
• 1:07:08
  Speaker 1: that Amazon sold tickets that they couldn't sell. That you
• 1:07:11
  Speaker 1: reached people that they didn't reach. It was actually a
• 1:07:13
  Speaker 1: benefit to it as opposed to people thinking, well, Amazon
• 1:07:17
  Speaker 1: is going to come in and take our business. When
• 1:07:20
  Speaker 1: Bob wants to replay his rock from does Amazon store
• 1:07:25
  Speaker 1: that so that he could get the exact same playlist
• 1:07:28
  Speaker 1: again or will it fabricate a new one. It's a
• 1:07:31
  Speaker 1: great question. Uh the next time probably Fabrica knewhim. But
• 1:07:34
  Speaker 1: when he's done listening, you could ask Alexa to save
• 1:07:36
  Speaker 1: it as a playlist and then he would access it
• 1:07:40
  Speaker 1: by saying I want my June playlist. When he creates one,
• 1:07:43
  Speaker 1: Shell asked how to what what names? She will ask
• 1:07:46
  Speaker 1: how to store to sign a name to it? Yeah? Nice? Yeah, Okay,
• 1:07:49
  Speaker 1: Before we move on, how many people in the room
• 1:07:51
  Speaker 1: have an echo of some stripe. Wow. Okay. How many
• 1:07:56
  Speaker 1: people have a Google Home yea? How many people have
• 1:08:01
  Speaker 1: a HomePod? Okay? Okay? Uh? Who has the bike now? Jim? Okay, Hey,
• 1:08:13
  Speaker 1: how you doing um with everything going on with Cambridge
• 1:08:16
  Speaker 1: Analytica and everything on Facebook? Now? You put a microphone
• 1:08:20
  Speaker 1: in your house on all the time? Any thoughts on that?
• 1:08:27
  Speaker 1: You know? I want to comment on that because this
• 1:08:30
  Speaker 1: is the type of thing that makes me fucking crazy
• 1:08:34
  Speaker 1: and that I hear I still, at this late date,
• 1:08:37
  Speaker 1: gets saying I'm not gonna have streaming? What if I'm
• 1:08:40
  Speaker 1: out of cellular service? Now for almost ten years they've
• 1:08:45
  Speaker 1: had it, so it seeks to your phone, so you
• 1:08:47
  Speaker 1: have to pay every month. They have ownership. You can't
• 1:08:49
  Speaker 1: get that message through when it comes to the Echo
• 1:08:52
  Speaker 1: devices until they hear a lection the code word the
• 1:08:56
  Speaker 1: microphone is not on. Isn't that correct? That's correct. So
• 1:09:04
  Speaker 1: there's a basically a small processor on the device that
• 1:09:11
  Speaker 1: all it does is listen for ALEXA. It's not connected
• 1:09:13
  Speaker 1: to the cloud. When it hears ALEXA, it opens up
• 1:09:18
  Speaker 1: a connection to the cloud to capture what you say.
• 1:09:20
  Speaker 1: Next converts that into wave file and then interpreted into
• 1:09:24
  Speaker 1: text and it comes back down. Um. So the reason
• 1:09:29
  Speaker 1: there's a blue light so you know she's listening. If
• 1:09:35
  Speaker 1: you ever want to make sure that nothing like if
• 1:09:39
  Speaker 1: one of the kids blurts out Alexa and you and
• 1:09:41
  Speaker 1: you were on a super confidential conference call for work
• 1:09:44
  Speaker 1: or something, there's a mute button which physically cuts the
• 1:09:47
  Speaker 1: circuit of the microphones, physically impossible for any sound to
• 1:09:51
  Speaker 1: get back to Amazon. So privacy has been thought of
• 1:09:54
  Speaker 1: in the very design of the device from from day one,
• 1:09:56
  Speaker 1: both in its construction of the device as well as
• 1:09:59
  Speaker 1: the usual cues to let you know when Alexa is listening. So, um,
• 1:10:05
  Speaker 1: it's something we take really, really seriously. I'm not the
• 1:10:08
  Speaker 1: one in charge of that stuff, but it's something that
• 1:10:11
  Speaker 1: I've heard described and it's it's as I described to you.
• 1:10:14
  Speaker 1: It's something you know, Amazon the customer obsession and customer
• 1:10:19
  Speaker 1: trust is at the center of our entire business. It
• 1:10:23
  Speaker 1: has drilled into you from day one that you walk
• 1:10:25
  Speaker 1: into the company, and we know that trust is something
• 1:10:29
  Speaker 1: hard to earn an easy to lose, and it's not
• 1:10:31
  Speaker 1: something that Amazon takes lightly. A lot of people have
• 1:10:34
  Speaker 1: trusted us for years with purchasing a lot of important
• 1:10:38
  Speaker 1: things in their lives, and yeah, we're not doing anything
• 1:10:42
  Speaker 1: to mess with that. But having said that, the other
• 1:10:44
  Speaker 1: half of his question is important. You have an incredible
• 1:10:47
  Speaker 1: amount of data and knowledge of us. You know, as
• 1:10:50
  Speaker 1: I say, on Google, they can literally they say you
• 1:10:53
  Speaker 1: want to get someone you know, cough up something, just
• 1:10:56
  Speaker 1: say you threatened them with release of their Google search history.
• 1:11:00
  Speaker 1: But you literally have the purchase history. How do we
• 1:11:04
  Speaker 1: know that you're not going to use that to our
• 1:11:07
  Speaker 1: detriment or to brainwash us, or to get us to
• 1:11:11
  Speaker 1: do something we don't want to do. That's a music conference. Uh,
• 1:11:21
  Speaker 1: you know, I'm happy to get our public policy people here,
• 1:11:24
  Speaker 1: but um, I think we're the most trusted brand in
• 1:11:28
  Speaker 1: America for a reason. And I kind of would leave
• 1:11:32
  Speaker 1: it at that. You know, I'm not I'm not here
• 1:11:35
  Speaker 1: really to talk about data. Place say, I don't need
• 1:11:37
  Speaker 1: to press his expecting answer. But I think the other
• 1:11:39
  Speaker 1: half of the question, the non technical question, is something
• 1:11:41
  Speaker 1: that's in everybody's minds that certainly needs to be in
• 1:11:45
  Speaker 1: the marketplace, if not a chilling effect on the abuse
• 1:11:48
  Speaker 1: of data. Not that Amazon has a history there, but
• 1:11:51
  Speaker 1: we want to put that in everybody's mind. Jake, Um,
• 1:11:54
  Speaker 1: you know Steve brought up something interesting, Steve about the
• 1:11:58
  Speaker 1: other Steve about playlists. So Bob does a great playlist
• 1:12:04
  Speaker 1: of rock from sixty nine, and uh, those of us
• 1:12:08
  Speaker 1: really like Bob's taste, so we want to listen to
• 1:12:11
  Speaker 1: Bob's playlist from nineteen nine. Does Amazon currently and I
• 1:12:15
  Speaker 1: don't know or will it allow third party playlists to
• 1:12:20
  Speaker 1: be made on the service where other people can go
• 1:12:23
  Speaker 1: and listen to other curators beside your own playlists, I
• 1:12:27
  Speaker 1: mean playlist sharing. Yeah, playlists sharing or for that matter. Um,
• 1:12:32
  Speaker 1: I don't know if they're on your but Majestic Casual
• 1:12:34
  Speaker 1: is a great example of people that make playlist They've
• 1:12:37
  Speaker 1: been doing it for years. They started on YouTube. You
• 1:12:40
  Speaker 1: you go into I go into my son nos playlist
• 1:12:43
  Speaker 1: search and I do Majestic Casual and Deezer comes up with,
• 1:12:47
  Speaker 1: you know, a Hunter playlists, and Apple Music comes up
• 1:12:49
  Speaker 1: with a Hunter playlists, and Spotify the same thing, and uh,
• 1:12:53
  Speaker 1: and they're just a playlist kind of brand. We have
• 1:12:55
  Speaker 1: some of two questions. The first question is playlist sharing. Uh, yes, Um,
• 1:13:01
  Speaker 1: that's something we either do or about to enable. Um, okay,
• 1:13:07
  Speaker 1: we enable that with voice. We'll work through that. Okay.
• 1:13:12
  Speaker 1: The second thing is third party playlists. Yeah, we have
• 1:13:16
  Speaker 1: some of those brands in our serves. I don't know
• 1:13:18
  Speaker 1: about Majestic Casual per Se, but I know that we
• 1:13:20
  Speaker 1: have some of the other ones in our service. So
• 1:13:22
  Speaker 1: so so one of the things when Troy Carter was
• 1:13:25
  Speaker 1: here the other day, he said, you know, we concentrate
• 1:13:28
  Speaker 1: mostly on our own playlists, and they're kind of pushing
• 1:13:32
  Speaker 1: back against third party playlists because they're afraid of graft
• 1:13:37
  Speaker 1: payola to get on those those bigger playlists. And I
• 1:13:40
  Speaker 1: just trying to get your sort of take on the
• 1:13:42
  Speaker 1: same thing. Troy is a really smart guy, and I
• 1:13:45
  Speaker 1: agree with him. And you know, there's there's two angles
• 1:13:48
  Speaker 1: to that. One is worrying about those types of things, um,
• 1:13:51
  Speaker 1: but also you have to understand that we're a music
• 1:13:54
  Speaker 1: service and in a in a world where all of
• 1:13:58
  Speaker 1: us have very similar music alogues, we are going to
• 1:14:01
  Speaker 1: differentiate ourselves through a variety of means, and one of
• 1:14:04
  Speaker 1: those is our own curation. And so it's it's only
• 1:14:07
  Speaker 1: natural that a music service would want to, you know,
• 1:14:11
  Speaker 1: invest heavily in its own creation to make sure it's
• 1:14:14
  Speaker 1: really great. But you know, and and we know that
• 1:14:16
  Speaker 1: we won't be doing Payola and Graft and all that
• 1:14:18
  Speaker 1: other stuff. So I don't know what goes on in
• 1:14:21
  Speaker 1: the other companies. So that is a concern. Next person
• 1:14:25
  Speaker 1: with the microphone. Yeah, so actually you just answered part
• 1:14:27
  Speaker 1: of my question. Um, the question was my my thought.
• 1:14:30
  Speaker 1: My my question is about where do you think the
• 1:14:33
  Speaker 1: responsibility lies for actual curation and promotion on the platform? Um,
• 1:14:39
  Speaker 1: specifically with with regard to Voice. Um, how much of
• 1:14:42
  Speaker 1: it is or I know you don't like to share numbers,
• 1:14:44
  Speaker 1: but how much of the traffic is organic, purely organic?
• 1:14:47
  Speaker 1: I want to play this now, And how much of
• 1:14:49
  Speaker 1: it is driven by your curation? And what direction is
• 1:14:51
  Speaker 1: that moving? And how do you think about that? Yeah,
• 1:14:55
  Speaker 1: a substantial percentage of our our of our listening is
• 1:14:58
  Speaker 1: through curation. Um. I think Troy might have mentioned some
• 1:15:03
  Speaker 1: numbers the other day or recently, and you know they
• 1:15:07
  Speaker 1: seemed in line with what we kind of see at
• 1:15:10
  Speaker 1: Amazon Music in that general range. Um, what we see
• 1:15:16
  Speaker 1: in voice is interesting behavior that you see the same
• 1:15:23
  Speaker 1: person will will Will go from a very casual lean back,
• 1:15:28
  Speaker 1: just play me some music or play a genre playing
• 1:15:31
  Speaker 1: artist whatever, to then like go straight deep down into
• 1:15:34
  Speaker 1: the catalog and want that specific track and so just invert.
• 1:15:40
  Speaker 1: But but of course by just sheer volume when you're
• 1:15:44
  Speaker 1: in the lean back mode, you're going to hear more
• 1:15:46
  Speaker 1: music than It's more tiring to say, play this track,
• 1:15:49
  Speaker 1: play that track, but you know it takes you a
• 1:15:51
  Speaker 1: long time to play. If that's fifteen requests you have
• 1:15:54
  Speaker 1: to come up with to to listen to an hour
• 1:15:55
  Speaker 1: of music. Um, so we do see invoice people tending
• 1:16:00
  Speaker 1: to listen to more hours, longer sessions, and a higher
• 1:16:04
  Speaker 1: incidents of curated music for sure. Now, my girlfriend always says,
• 1:16:09
  Speaker 1: I do these back exercises and I have thirty second timers,
• 1:16:13
  Speaker 1: and she says, well, you can set a series of
• 1:16:14
  Speaker 1: continuous timers. I've yet have been able to do that.
• 1:16:18
  Speaker 1: But can I load Alexa for your voice? Can I say,
• 1:16:21
  Speaker 1: play the Rolling Stones, then play Jesus Jones and play Drake?
• 1:16:26
  Speaker 1: Is there a way to do that? You mean a cue?
• 1:16:30
  Speaker 1: I mean or just looking getting there but not yet? Okay,
• 1:16:35
  Speaker 1: it's coming. And are there anybody else with raised hands here?
• 1:16:38
  Speaker 1: Jim over here? Uh? In terms of statistics, how significant
• 1:16:47
  Speaker 1: is music? Is a us A case for uh? The echo?
• 1:16:53
  Speaker 1: In terms of versus other user activity like asking for
• 1:16:57
  Speaker 1: the weather or recipes or podcasts, and where do you
• 1:17:01
  Speaker 1: see those statistics going in the future. Yeah, so it's
• 1:17:07
  Speaker 1: an extremely important use case among all things that people
• 1:17:10
  Speaker 1: do on Alexa are on Echo. I like to remind
• 1:17:15
  Speaker 1: my team that, you know, we sell a speaker that
• 1:17:20
  Speaker 1: has an intelligent assistant in it who can do a
• 1:17:22
  Speaker 1: lot of different things, but the main vehicle that we're
• 1:17:26
  Speaker 1: delivering that intelligent assistant to the home is a speaker.
• 1:17:29
  Speaker 1: And so not surprisingly, music is super important on a
• 1:17:32
  Speaker 1: speaker because that's what people like to do on speakers. UM.
• 1:17:36
  Speaker 1: So it's one of the top at all times. How
• 1:17:40
  Speaker 1: do I see that evolving over time? I think that
• 1:17:42
  Speaker 1: will stay the case as long for for devices where
• 1:17:45
  Speaker 1: speakers are really the delivery vehicle for the intelligent assistant.
• 1:17:49
  Speaker 1: I think if there are other devices that are less
• 1:17:54
  Speaker 1: music centric than a speaker, I think that percentage would
• 1:17:57
  Speaker 1: be different. Um. But in the smart speaker category, I
• 1:18:03
  Speaker 1: expect music to continue to be up there no matter
• 1:18:06
  Speaker 1: how many more skills are added to Alexa. UM. And
• 1:18:10
  Speaker 1: it's the thing that you know, people use it not
• 1:18:13
  Speaker 1: just a lot in terms of hours, but it's frequency
• 1:18:17
  Speaker 1: and repetition and coming back to it. UM. It the
• 1:18:21
  Speaker 1: only you know the other skills like that that you know,
• 1:18:23
  Speaker 1: whether yes, smart home something, if you control your lights
• 1:18:28
  Speaker 1: you know you do turn them off and on fairly frequently,
• 1:18:30
  Speaker 1: so you'll repeat that. But music is has an incredible
• 1:18:35
  Speaker 1: engagement level on the device now on the really regular
• 1:18:41
  Speaker 1: Amazon Prime, the more people listen, it costs you more money. Okay,
• 1:18:47
  Speaker 1: So is there any talk at the company of dissuading
• 1:18:49
  Speaker 1: people from listening because you literally have to pay for that.
• 1:18:54
  Speaker 1: Uh No, I mean our we we know the value
• 1:18:59
  Speaker 1: that it generates for Amazon. You know, we know that
• 1:19:01
  Speaker 1: our Prime members who use Prime Music are better Prime
• 1:19:05
  Speaker 1: members and they they renew their Prime memberships at a
• 1:19:10
  Speaker 1: higher rate, They come out of their free trials of
• 1:19:13
  Speaker 1: Amazon Prime at a higher rate than than than do
• 1:19:16
  Speaker 1: people who don't use Prime Music. And you know, we
• 1:19:19
  Speaker 1: we carefully watch that and and understand the value that
• 1:19:22
  Speaker 1: it's generating. And you know, we're not trying to dissuade
• 1:19:24
  Speaker 1: people from from listening at all. And yes, um so
• 1:19:29
  Speaker 1: serious sex sums done a great job of facilitating uh
• 1:19:33
  Speaker 1: festival and concert live streaming. Red Bull TV has been
• 1:19:37
  Speaker 1: doing it from a video perspective as well as others.
• 1:19:39
  Speaker 1: All the Red bullis got out. Um, does Amazon have
• 1:19:42
  Speaker 1: any intentions of getting into the live music streaming business, uh,
• 1:19:48
  Speaker 1: via artists directly or festivals. Yeah. I mean I'm not
• 1:19:52
  Speaker 1: going to talk about things here that we haven't done
• 1:19:55
  Speaker 1: yet that we might do if we you know, this
• 1:19:57
  Speaker 1: isn't the forum where I'm gonna disclose something like that. Um.
• 1:20:01
  Speaker 1: What I would say is we've been doing some live
• 1:20:04
  Speaker 1: broadcasts lately with working with some of the labels and
• 1:20:09
  Speaker 1: doing some really interesting promotions around new records by Justin
• 1:20:13
  Speaker 1: timber Lake, by Elton John just had these tribute albums
• 1:20:16
  Speaker 1: as well as by you two in the in the
• 1:20:18
  Speaker 1: in the Winter that are a combination of uh, interviews
• 1:20:23
  Speaker 1: and music and and it's it's it's really kind of
• 1:20:26
  Speaker 1: like a live radio show. Um. But in terms of
• 1:20:29
  Speaker 1: whether we're gonna do live concert stream that's not This
• 1:20:31
  Speaker 1: isn't the forum for me to talk about that. Yeah.
• 1:20:34
  Speaker 1: Another question you were talking about, UM, some of the
• 1:20:37
  Speaker 1: metadata that you have to create on your own and
• 1:20:40
  Speaker 1: I've been recently reading articles about tags for your songs
• 1:20:44
  Speaker 1: and like you know, I work with indie artists who
• 1:20:45
  Speaker 1: work with tune Core and CD Baby in places like that.
• 1:20:49
  Speaker 1: Are you gonna now go to some of these aggregators
• 1:20:53
  Speaker 1: and potentially have a different metadata form for when you're
• 1:20:58
  Speaker 1: submitting your music. You can say this is a sad song,
• 1:21:01
  Speaker 1: this is an upbeat dance song, and those kind of
• 1:21:04
  Speaker 1: tags to help you guys with your service. Yeah, we've
• 1:21:08
  Speaker 1: been actually working with d dex um to try to
• 1:21:11
  Speaker 1: update the DDX standard to include more fields that are
• 1:21:15
  Speaker 1: relevant for voice and so that would be you know,
• 1:21:17
  Speaker 1: it would be in the d dex standard. Okay, any
• 1:21:22
  Speaker 1: other people with questions here, Okay. The thing about this
• 1:21:27
  Speaker 1: is we've learned a lot about Amazon and as I
• 1:21:29
  Speaker 1: even though I have the service, I'm still learning things,
• 1:21:32
  Speaker 1: which speaks you know, we have the music. People say, oh,
• 1:21:35
  Speaker 1: market the hell out of it, but it's a stealth
• 1:21:37
  Speaker 1: operation and something you definitely have to pay attention. And
• 1:21:41
  Speaker 1: thanks so much d for coming and sharing, Thank you
• 1:21:43
  Speaker 1: for having me. That wraps up this week's episode of
• 1:21:52
  Speaker 1: the Bob left Set podcast, recorded live the Music Media
• 1:21:56
  Speaker 1: Summit in Santa Barbara, California, and produced by tune In.
• 1:22:00
  Speaker 1: I hope you enjoyed this conversation with VP of the
• 1:22:02
  Speaker 1: Amazon Music s feed Boom. I found it fascinating how
• 1:22:05
  Speaker 1: Amazon Music uses data to its advantage. What part of
• 1:22:09
  Speaker 1: the interview is interesting to you. Your feedback is always appreciated.
• 1:22:14
  Speaker 1: You can email me at Bob at left sets dot com.
• 1:22:16
  Speaker 1: Until next time, I'm Bob left Sets than reads. Don't
• 1:22:24
  Speaker 1: know exactly must be out