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JIM CRAMER: It's funny. I like the revenue stream of Apple service. And when I saw it, I know this company, the big one, it's a Brooklyn company, so I followed the Brooklyn companies because I lived there, I'd He hoped that Apple would make this acquisition. The reason I say this is because people do not do it – unless you listen to podcasts, they are very millennial and they look a lot like multitasking now. Do you see you buying all those who stay?
DANIEL EK: I do not think we need to buy all the companies in this space. There is a lot – a lot of these companies. What is really important to us is that we want to be in the game, we want to be the platform to which these creators come and go. And, again, as you mentioned, I would say – we are very focused on the audio. Video is a huge space. He is paying attention to everyone right now. But we think that audio consumption consuming nearly two hours a day is a huge opportunity that nobody really pays attention to.
JIM CRAMER: Wow –
DAVID FABER: Sorry, Jim, you have a line of sight on $ 4 to $ 5 million in multiple acquisitions this year. And then you just said that can double, am I right? That could reach one billion in 2020?
DANIEL EK: Not really in terms of acquisitions. What I was talking about our investments in content that we do. So part of what you should be looking at in terms of our future predictions is the two acquisitions, but it is also our own efforts to invest in the creation of these programs. We had 14 exclusive shows in the fourth quarter of 2018. We are duplicating this. And we want to increase the number of shows we have.
JIM CRAMER: I'm so impressed by the subscribers by region. That's something you've told me originally, your company said it could happen. I will go – 30% in North America. Latin America, 20%. Rest of the world 10. You are almost at the end of the year here, you are up 40%. Is the podcast broadcast in all regions?
DANIEL EK: Yes. You would be surprised. He grew very, very fast. Germany is a good example. We are already here. The number one children's program is currently showing, so you see that young consumers are going to bed with Spotify, listening to stories in a very broad way. So, even in Germany, the perception would not be that Spotify only concerns music, it is already really about audio.
JIM CRAMER: So it's important, because when I look at Netflix, I never look at dubbing it. I always watch it – you have to watch the titles, it's a different show than the one you listen to. Are you going to translate the good things of everyone for the United States?
DANIEL EK: I think it's quite possible to take shows that work really well in these different regions and translate them around the world.
DAVID FABER: What about the car? Do you have any idea how many people are listening to you in an automobile?
DANIEL EK: Yeah. I mean, we're doing very well in the car. I think the last number we announced is that more than 50 million of our users are using Spotify in their car. This is therefore an important part of our business.
DAVID FABER: And do you have – do you have any idea of the growth of this? Obviously, the car competes with Sirius, which many people know, but even beyond, some others. Does it increase dramatically?
DANIEL EK: It's really growing, really a lot. I think the first step we're looking at is the double platform. How many of our users use it on more than one platform? And what we're seeing is that this number is increasing dramatically as more and more speakers come into play and cars are more and more connected. So that's a big part of our story. We also find that these people are also twice as involved as the average user. It is therefore an important part of our overall history.
DAVID FABER: When you look at the competitive landscape, Daniel, you were obviously in advance, sort of – at the time of piracy, you transformed and streamed continuously, you were the leader. But Apple is there with a product. We do not talk about it very often. Amazon. These are two extremely rich businesses. Do you believe that, if they wanted to, they could eventually spend enough money to get you out of your market leadership position?
DANIEL EK: I mean, these are great companies. Without a doubt. But what I'm looking at is obviously how our business is doing and we've had a phenomenal Q4. The other aspect I observe is that we focus solely on audio. That's how you should look at this. There are a ton of things these other companies do, autonomous cars, whatever their activity. And I think today you have to be very clear with your brand, what you are for consumers, so that they can take it back. And the best experience wins. And now we are adding the best content too. And it's now Spotify.
JIM CRAMER: I do not know if you know about Zuora's Tien Tzuo's work, but the economy of subscriptions and that of subscribers, it's a great book, he always says "Look at the bearing." The turnover is loyal. You have some of the most difficult disorders I've ever seen.
DANIEL EK: Yeah. And as you can see, the trend is decelerating.
JIM CRAMER C is positive – we should tell people that it is good.
DANIEL EK: Yeah, yes. Churn is slowing down, which is a very positive step that we are watching. And of course, you should also look at the ads we are doing today – as I said, this expands the appeal of Spotify, it increases the commitment. If it increases the commitment, we think that it has the opportunity to further reduce the churn rate.
JIM CRAMER: And what about Google?
DANIEL EK: Yes, Google is obviously the same category as all other FAANG companies.
DAVID FABER: It was not so long ago that you became public. I remember it. I do not think you were even here at that time. You chose to list as opposed to raising funds. Are you satisfied with this decision?
DANIEL EK: I am. Effectively. It was obvious that we had an important decision, but it was like Spotify's way of doing things. It was not just about doing it in the interest of everyone else. And we've always said we're a thoughtful, long-term company, and I think we've proven that with this gesture.
DAVID FABER: Tell me more, what does the "Spotify method" mean? It simply means doing it differently or the way you need?
DANIEL EK: It 's about being transparent and, in this case, trying to align everyone' s incentives. And in our case, we did not need to raise additional capital. And we wanted a way to provide liquidity not only to our existing shareholders, but also to our employees. And it was important for me to avoid this traditional process of blocking our employees.
DAVID FABER: Well, for the sake of transparency, we are very happy to welcome you, but curious to know why you suddenly communicate in this way. Can we expect to see you more in this kind of public setting, articulating some of the things you've just done here? Or will it be somehow once and we will never see you again?
DANIEL EK: No, I certainly hope to be available and transparent. This is certainly what we want to be as a business. And I encourage both of you, by the way, to contact me on social platforms and I'm happy to answer your questions as well. But I think that's obviously – marks a shift in perceptions of what this society is. And it is very important for us to state very clearly why we are excited about this future.
JIM CRAMER: Let me go back to something we wanted to deepen – share things. This Google. I did not want Google to be a throwaway. Premium subscribers. The promotion of Google Home was the first offer of material bundle of history. It worked great for you. Are we going to see Amazon? Are we going to see – who else do you do that with? Because for me, it's the premium, and the bonus is the way I want to judge you.
DANIEL EK: Yeah. I mean, our strategy is called ubiquity, that is, being on all platforms.
JIM CRAMER: Good.
DANIEL EK: So we have 500 such partnerships going on, and of course we've found that our members are asking for these speakers. We have seen a clear opportunity to provide an incredible experience. We have seen that Google fans already attend Spotify. We would be happy to extend this to Samsung, of course.
JIM CRAMER: Okay.
DANIEL EK: And happy to work –
JIM CRAMER: Samsung's car, because you can use Infotainment and HARMAN.
DANIEL EK: Yes. Of course.
JIM CRAMER: What do you think of Facebook?
DANIEL EK: Facebook, again, is an exciting business. We have a long relationship with Facebook. If there are opportunities, we would like to work with them.
JIM CRAMER: So, no matter what happened with Facebook in the world, you are a morally motivated company. You have no problem with Facebook.
DANIEL EK: No, look. In the end, we want to be where our users are.
JIM CRAMER: Pretty well.
DAVID FABER: Let's go back to many financial issues and topics that are of interest to some of your investors. What are your expectations in terms of negotiating with the labels and what is really going to happen there?
DANIEL EK: Well, our goal, and I think it's also their goal, is really to know: how do we develop the entire music industry? I have already said about our results that for us in this round of bargaining we really have to allow the market to work. And it's a crucial point because it's not about losing and winning or taking margin points here or there at their expense. It is actually about eliminating the inefficiencies that exist in the music industry by creating tools that facilitate the connection between artists and fans and facilitating the marketing of labels –
DAVID FABER: You have access to huge amounts of data that could be useful in terms of where people listen, how they listen and who they listen to.
DANIEL EK: Exactly, including the 16,000 data points we collect every day across the taste profiles. This is a big part of the fact that we can connect these two elements in a positive way for the users but also for the artists.
JIM CRAMER: I do not want to be too much like Bobby Kennedy, but if we just think about now, no, but if we dream of things – more sticky than you are, I'll come back to the churn, I mean, Many people have watched Netflix at $ 6.95. They said it will never be anything. I mean, when I see the low churn, I think that someday you could raise prices, you're a little stiffer, and therefore we should be modeling higher prices later.
DAVID FABER: $ 14.99, that's enough, I think.
JIM CRAMER: No, come on.
DAVID FABER: What do you think?
DANIEL EK: Again, all I can say is that we are in this phase of market growth. We are not – let's try to capture all the benefits.
JIM CRAMER: David, take the commercial side. Go listen to the commercials if you have a problem with 14.
DAVID FABER: I think we need to get into the podcast business.
JIM CRAMER: Daniel, it was great that you came. I hope to see you again. Daniel Ek–
DANIEL EK: Yes. Thank you for hosting me.
JIM CRAMER: – with an amazing business that people are beginning to understand because they will only want to store that they do it rather than the ridiculous four walls with which the badysts arrive – with the neutral. I am not neutral
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