Ola Sars Podcast Transcript
Ola Sars joins host Brian Thomas on The Digital Executive Podcast.
Brian Thomas: Welcome to Coruzant Technologies, Home of The Digital Executive podcast.
Do you work in emerging tech, working on something innovative? Maybe an entrepreneur? Apply to be a guest at www.coruzant.com/brand.
Welcome to The Digital Executive. Today’s guest is Ola Sars. Ola Sars is a Stockholm based serial music tech entrepreneur and 2024 Billboard international power player.
He’s the founder and CEO of Soundtrack Technologies, the leading music streaming service for businesses originally founded as a joint effort with Spotify. Sars has transformed Soundtrack into the only global B2B streaming service of its kind, servicing over 80,000 businesses across 74 countries. With a music catalog of more than a hundred million tracks cleared for commercial use before soundtrack, he co-founded Beats Music, which was acquired by Apple for 3 billion and transformed into Apple Music and pacemaker, the world’s first pocket size DJ system.
Well, good afternoon, Ola. Welcome to the show.
Ola Sars: Thank you, Brian.
Brian Thomas: Absolutely my friend. I appreciate it, especially making the time out of Stockholm, Sweden. Today I’m in Kansas City, so there’s quite a bit of a time traverse difference here. I know jumping time zones and calendars is hard, so thank you so much.
And Ola, if you could, here, we’re gonna jump into your first question. You’ve built multiple category defining music tech companies from Beats music to soundtrack technologies. What reoccurring insight about the music business has guided your entrepreneurial decisions across these ventures?
Ola Sars: I’ve been doing it for 20 years and I’m still working on the same thesis as when I started.
And that thesis is quite simple. It’s, um, a thesis based on, the, the change of the music industry basically. So 20 years ago I kind of observed as a. A music lover, but not working in the music industry, just a fan. And that everything was changing at the same time. Basically, digitization was occurring in the music industry.
Production of music was going digital, distribution of music was going digital, and consumption of music was going digital all at the same time. Meaning kind of a, a massive tectonic shift in the industry, which obviously provided some opportunities in the future. So, I changed from a previous career and jumped in and, and since then I’ve been ling technology companies within the music industry.
Brian Thomas: I really love your story. Obviously you’ve done some great things working with some great celebs like Dr. Dre, Spotify, et cetera, you know, 20 years in this business, a lot has changed as you know, and I love what you said, your thesis is the change that evolution of the music business.
So, I appreciate your contributions to the industry. Ola, Soundtrack started off as a joint effort with Spotify and has since evolved into the world’s leading B2B music streaming platform. What made you realize that businesses needed a fundamentally different solution than consumer streaming?
Ola Sars: Well, uh, first of all, I previously, I worked in the consumer markets, so I was kind of in the forefront of.
What we take for granted today in music streaming for consumers, right? So today there’s multiple options for us as consumers. Spotify, apple Music, Amazon and I can keep going obviously. So, this. Transformation of the music industry happened, started in the consumer markets, and now it’s everywhere.
And the industry has kind of, concluded that music streaming is the forward model for music consumption that did not occur in the business to business markets, which is, cafes, restaurants, retailers, playing music to create an atmosphere and maybe sell more coffee or whatever business they’re in, that part of the music industry is, I would say less developed and 10, 15 years behind what’s going on in the consumer market.
So my piece is now more than 10 years ago, was what happened in the consumer markets for music, meaning. Streaming becoming the core model would also happen in the business to business market, meaning, what you guys in the US refer to as background music. So I started building a thesis around that and I started looking at what does a business or a brand need in order to deliver the right music at the right place at the right time to.
Add commercial value and that was a completely different use case or product requirement than what we’re using in our phones and our consumer service today. So, I started building on that thesis and we’ve now rolled out soundtrack worldwide. And we’re, the path is growing and kind of the leading the category leader within business for music, music for business, sorry.
Brian Thomas: Yeah. No, thank you. I appreciate that. That’s awesome. You certainly have some incredible growth there. Fastest growing in this particular vertical which is amazing. As you mentioned earlier too, lots of options for consumers in the music streaming. you just mentioned some examples. You know, there’s Spotify, Apple, Audible, Pandora, et cetera. However, you saw a need on the business side of things. Things were less developed. You even highlighted that it might be about 15 years behind. But you saw that business needed to deliver the right music at the right time to the right consumer. So, I really appreciate your insights, Ola.
Having co-founded Beats Music, which became Apple Music, how do you view the current state of music streaming economics for artists, platforms, and businesses? What still needs to change?
Ola Sars: Well, the, sometimes there’s a mis, representation of this reality of the music industry actually, in terms of size of consumers that are paying for music has never been bigger.
It’s actually twice as big as it was before the streaming revolution. So. In terms of market growth and consumer reach and monetization and compliant usage, it’s never been healthier than it is now, and it continues to grow. Then usually what people get wrong is like, let’s just take an example.
Where I worked previously with Beats and Apple, like we redistribute around 70% or more of the revenues we take from consumers on the subscription basis, right? So, if I, we bring in a hundred million, we share 70 million with music creators of that, and I think as a digital service provider keeping.
30% is fair given that we need to build the technology, market the product and distribute worldwide and, and everything. But 70% is passed through towards the music creators. But the path towards the music creators go through music labels, both through publishers. you know. There’s a lot of middlemen in the equation.
And that’s usually where kind of most of, of those revenues either go. They distribute to certain artists more than others and so forth. So, as the, the digital service providers in the world, we actually have a very fair model. Having said that, redistribution backwards into the music industry sometimes turns out to be unfair.
Last comment but also remember today there’s like almost a hundred times more artists and music creators being published into the music industry. So there’s more people and artists that need to share the pie than before when we were distributing CDs and only a fraction of the artists actually got published.
Brian Thomas: Wow, amazing. And I appreciate the stats. Streaming is definitely stronger than ever. It’s a lot more beneficial than it was years ago, as you know, in the traditional way. There’s a lot of market growth, reach and monetization in the streaming business, and it continues to grow. What I really liked, and I’ll highlight is you.
Way, the way you redistribute the revenue, about 70% goes back to the creators or the artists, which I think is amazing. Obviously, there’s a certain amount that you need to reinvest and build the new technology, and I totally get that. But love those insights really do. And Ola, the last question of the day as we look ahead.
How do you see AI artificial intelligence. Personalization and new licensing models reshaping the future of music in physical spaces, retail, hospitality, and fitness over the next decade.
Ola Sars: Yeah, I mean, everyone’s talking about ai left and right, up and down and, and yes, it’s, it’s very relevant.
Of course, in the music industry, there’s a couple of use cases. One is music creation, which is mostly what people talk about when they refer to ai, the AI revolution in music, meaning that actual computers are producing songs rather than humans. So. And that’s happening as we speak. I mean, there’s a bunch of services out there where you can go and you can, you can tell a prompt what type of track you want, that they will create that for you.
And that’s interesting. But in the music industry as such, my perspective is that we already have, I mean, just that Soundtrack; we distribute around 150 million tracks. We have, there’s no need for additional supply. We still have, Fleetwood Mac and Bruce Springsteen and all the beautiful art that has been created, for the last century to distribute.
And so, there’s so much beautiful music out there, there. There’s really no need for more music for the actual user. So, I think it’s interesting that AI is creating music now, but there’s really no need for it in terms of the customers buying and, in my case, that’s the retailers and the restaurants and the hotels in the world.
And then the other application of AI that we’ve been working with, and I’ve actually been working with almost for 20 years now. So, for me, it’s nothing new. It’s how do you use AI to create. The best playlist for a specific context, so previously was when I was in the consumer markets. It was for you, Brian, when you’re opening your streaming app, what music can we recommend to you that will kind of save the day for you?
And then, and where I am right now, it’s for the brands and businesses. How can we help? These businesses to curate, meaning create the perfect playlist for that hotel in Kansas City today for breakfast so that they can sell more smoothies. So, we’re just applying AI in terms of music selection and playlist creation in one use case.
And then. There’s also AI used to pour music production, and we just see that as another source of content alongside all the beautiful music that we already have on our platform from humans who’ve created through the years.
Brian Thomas: Thank you. I really appreciate that. And you’re right, there’s a lot of people out there, and I’ve seen it where AI is doing some music creation.
I agree with you. I’m a little bit old school. There’s really not the need for really more music created by AI. We do have a lot of music out there that, uh, has been created by humans, beautiful artists that are still being listened to today, I mean by millions every day. So, I appreciate that perspective.
But AI is useful in music curation, playlists, depending on the environment, the business, et cetera. And I think that’s really. Creative and that’s a great place for AI to be in this part of the business. So, I appreciate that and Ola, it was such a pleasure having you on today and I look forward to speaking with you real soon.
Ola Sars: Alright, thank you Brian. Thanks for having me.
Brian Thomas: Bye for now.
Ola Sars Podcast Transcript. Listen to the audio on the guest’s Podcast Page.
