Five years ago, Nick Holmsten was on a mountain, skiing with his wife and teenage son and daughter, when he got the phone call that would shape his life. Spotify CEO Daniel Ek wanted a meeting. A week later, Holmsten realized Ek's purpose: Spotify was interested in acquiring Tunigo, the music discovery app that Holmsten had founded in 2010 after abandoning hopes of hitting it big as a member of a Swedish Britpop band. Sensing Spotify's big future, he joined up.
These days, Holmsten, 52, has scaled new heights as Spotify's global head of music, the result of a July promotion after the departure of artist liaison Troy Carter. Thanks to a relocation last summer from Sweden to New York, he enjoys one of the top floors at 4 World Trade Center, where he's literally above the very financial industry that Spotify bypassed when it engineered an unprecedented direct listing on the New York Stock Exchange in April, opening with a $167 share price. (Its market cap now hovers around $24 billion, and record labels Warner Music Group and Sony Music have sold their stakes for hundreds of millions.)
Holmsten oversees the way the approximately 4,000-employee company interfaces with artists and its 96 million subscribers (about 40 million more than Apple Music), giving him a tremendous vantage point on where the industry is headed. He's also charged with managing increasingly influential curated Spotify playlists, including RapCaviar and Today's Top Hits, determining which artists are in or out. Those decisions become more meaningful as Spotify takes on some of the career-making tasks traditionally reserved for record labels and more complicated as the company struggles to figure out how to respond when artists like R. Kelly are accused of sexual misconduct. Spotify announced a mute feature in January after facing backlash over a 2018 "hateful conduct" policy (later reversed) that would have removed songs by Kelly and others from its playlists. Holmsten opened up to THR ahead of the Feb. 10 Grammys about Spotify's evolving stance on artist conduct, the most common request he gets from musicians and how Netflix is influencing music.
What have you brought to Spotify?
I joined in May 2013 upon the Tunigo acquisition. Before that, I started out as most people do, had a band, got a record deal, started to write music. We got successful in Asia, but eventually I did a lot of different startups. This was a time when it was crazy in Sweden. Pirate Bay was exploding. Everyone was trying to figure out what was the way forward for revenues. I had always been into tech. The question was how to turn [the fortunes of the music industry] around… One day, I was in NY, listening to DJs in the lobby, and I realized that when all music is available, someone needs to be the guide.
So that became Tunigo. Why was Spotify interested?
I think Daniel’s view from the beginning was solving problems. When you think of it, in 2013, Spotify didn’t have its own playlists, which now feels weird. You had a couple of influencer playlists, a couple of label playlists, but there was no structure around it. So at Tunigo, we created a way to organize different modes and categories. When Daniel called, this was the time when he realized that curation was going to be important. It comes down to user experience.
Thus came those playlists?
If you look at users coming to Spotify today versus users coming in 2008, it’s a different user. You had the early adopters, very tech savvy, the types of people who went into record stores and knew what they were looking for. But the majority, they would listen to radio, maybe on Christmas, and might go into a store but don’t know the name of an artist or song. So Spotify’s responsibility was to make personalized experiences for these users.
Do you feel responsibility for what gets heard on Spotify?
Daniel has a vision for one million creative artists and one billion users enjoying it. Our mission comes down to wanting to connect as many users to as many artists as possible. The music industry used to be constrained by limitation. There was only so much shelf space. Now that there’s no longer crazy [production] costs and so many middle men and gatekeepers. The whole process for new music submission is way more democratic. The interesting thing is that the more diverse we get, we see more engagement on the platform.
Spotify, though, has had some troubles on the video front, no?
Vertical video has been a big success for us. When we talked about videos from the very beginning, it was not about competing with music videos per se; It was more about social interactivity with fans. We know from experimentation that there is a lot to do with videos. For example, we’ve rolled out [a system where there is] nine seconds of video that loops [over music]. That gives artists the ability to be creative, use it in different ways.
So people who say Spotify failed at video have it wrong?
It’s very simplistic. We never had ambitions to become a video service. We have been trying to figure out how we can leverage what we are good at and have super-engaged audiences and make it a discovery platform. So what’s the visual component of that? There will always be audio as the foundation, but visual elements and interaction will come…. I think a lot of people look at Spotify the wrong way. They see Spotify as a one-way connection in a retail model, someone puts out a product and you buy. No, it’s a platform. The beauty of Spotify is we can run thousands of tests and navigate and figure it out. The whole secret is we want artists to be anxious and jumping on our platform the same way we see users waking up and putting in earbuds in the morning.
What's the state of Spotify's relationships with artists?
Better than ever. We are by far the most important partner in terms of getting music out.
What's the biggest request you get from artists?
Of course, they ask, “How do I end up on these playlists?” People believe if they just get their songs on these playlists, they’re done. It’s more complicated than that. Because getting on these playlists can be destroying if they are you aren’t ready for it. There is a system, a user perception of what a brand stands for. So if you are getting introduced and don’t have familiarity and not fitting into culture like RapCaviar, [users] can start skipping you, won’t like you, and it’s going to be tough to come out… Of course, if you are Drake or Justin Bieber or someone already with an audience like Ariana Grande with an anticipated new single, then it goes straight into [a top playlist]. But I believe that education is needed that it’s not just about the first week.
That’s a big change from how the industry traditionally worked.
It’s starting to be ridiculous what people try to do be on the Billboard 200 chart [which now factors the number of streams].
Tell me more about the education needs to happen.
Don’t want to get specific artists, but I’ve talked to labels and said, “It’s not a good thing [that new artists break on popular playlists].” I think we can build this artist and build familiarity over time.” This is not a sprint; it’s a marathon.
Do music labels have a future as Spotify takes on some of the traditional role of breaking artists?
Spotify has no interest whatsoever in being a record label. It makes no sense in how we are set up. You need to own IP. The whole music industry has been based on two things — distribution and payments. And Daniel has always been saying that if the only thing you are bringing to the table is distribution and the ability to pay someone, that's not enough. I definitely think the labels are going to be here forever, and they are going to be even more successful when it comes to earnings. But they need to shift a little and think what artist development means.
Spotify has struggled with the right solution when an artist like R. Kelly gets accused of sexual abuse. What have those conversations been?
There was a lot of internal discussion about conduct policy and we came to an agreement that it didn't make a lot of sense. The hate speech thing is so clear for us. That's something we can remove. But we don't have any conduct policy. We try to reflect what our users think about what should be on the platform. But when it comes to how artists should behave, it's a rabbit hole. Our intentions were good. But when we executed on it, we realized it wasn't working out.
It's tough to play God.
It certainly is. Daniel wanted to be proactive and wanted to do something good. It came out in the wrong way. When he pulled back, it was an admission it was not done in the right way. We learned from it and moved on. The mute thing — we talked about it internally, we want to leave it up to users to make these decisions.
So is muting the solution?
It’s still in a test phase. It came from users asking for it. That said, there have been stories circulating about the most-muted artists. There’s no tracking on that. We wouldn’t. [For muting,] we’ll find out if people use it. But we also don’t want to create a toggle feature that never gets untoggled because it was built that way.
What's interesting in music of late?
The whole Lady Gaga Star Is Born thing. I remember meeting John Janick, the head of Interscope, who said, "Yeah, Gaga is doing Star Is Born. It's not really Spotify music." I was like, "What do you mean?" Spotify is a two-sided mirror. Sometimes it reflects what happens out there, sometimes it drives what is out there. Same thing for [Netflix's] 13 Reasons Why. A lot of people in the music industry said today’s top music is Top 40, but no, the most popular song on the platform [for a time] was from that show. [Lord Huron's "The Night We Met"].
Perhaps Netflix’s streaming numbers can be deduced by Spotify plays of the show’s soundtrack.
Stranger Things was the same thing. So many people listened to 80s music because of that show. Kids today are agnostic. We live in a world where we want to frame things. Habits are so diverse. What’s happening in culture are water-cooler moments. Take hip hop. The problem was it wasn’t played on radio but the demand was enormous. We rolled out RapCaviar. It was so easy for us. We could just put it up and there was no competition. That helped tremendously and in some way it killed radio. The problem is if you don’t reflect the culture, and I think radio was so focused on advertising sales and they felt that music couldn’t be played, that doesn’t work.
At the end of the day, do you think Spotify is leading musical experimentation by artists by giving them a way to distribute without running through tastemakers or rather a mainstreaming because everyone is trying to get on a playlist?
I don’t know what mainstream is because usually when you say mainstream, is that popularity? Because if you look at what is most streamed on the platform right now, most of these artists didn’t have record deals, they did it in bedrooms, it’s definitely not mainstream. The platform itself has made it possible for new artists to reach audiences. From our perspective, it’s all going to evolve.
Interview edited for length and clarity.
This story first appeared in the Feb. 6 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.