Just two years after buying SoundBetter, Spotify has sold the artist services company back to its original founders.
SoundBetter is an artist services site designed to connect musicians with other collaborators. Songwriters, producers, sound engineers, and more can connect for projects. The move may signal that Spotify is looking to stop stepping on industry toes.
“Together, Spotify and SoundBetter benefitted from many synergies, but as SoundBetter continues to evolve, both parties agreed that the company is best positioned for the next stage of growth by returning to the founders that have been committed to shepherding it from the beginning,” says Dom Sanya, Spotify’s Global Head of Creator Marketing.
SoundBetter is now owned by its original founders, Itamar Yunger and Sachar Gilad.
“Spotify accelerated SoundBetter’s trajectory, helping us reach hundreds of thousands of musicians around the world. SoundBetter today has a larger community of amazing artists creating more and higher quality music, and a wider array of expanded services,” says Gilad. “We are grateful for the partnership and look forward to continuing to enable the careers and passions of many more professional musicians.”
SoundBetter works on a commission model – it takes a small fee when someone is hired. Spotify appears to be focusing more on other aspects of its business to monetize. Marquee asks artists to pay to reach their fans, while Spotify is studying the human brain to monetize its audio and video ads better.
Spotify didn’t disclose how much it paid for SoundBetter in 2019. Spotify’s Head of Product Marketing Charleton Lamb described it as a powerful tool for creation and collaboration. But Spotify’s focus on attracting attention to the platform seems to be its podcasting frontier, rather than courting music creators.
Spotify shut down the system allowing artists to upload music directly to Spotify in July 2019. That came about after fierce opposition from record labels who feared Spotify would attempt to replace them.
Spotify has no such opposition for podcasts or funding podcast creators – which is why the company is focusing so much of its efforts there. Beating out Apple to become the new ‘king of podcasts’ is Spotify’s goal – streaming music to fans is a secondary one.
Don’t get me wrong, music is still vastly important to the Spotify ecosystem, but becoming part of the creative process for music isn’t. Spotify has replaced that pipeline with the vastly more profitable podcasts.