Transforming Music for Business

Jakob

Hey guys and welcome back to the Sound Connections Podcast. Today as a guest I've actually had on my wishlist for year. Welcome.

Ola Sars

Thank you.

Jakob

Well, I heard a podcast with you with team and on the music business worldwide podcast a year ago and with your company's soundtrack. And I was deeply fascinated by the concept of growing the pie. And even though that's a not an unknown concept, like that was the first time I had it explained what that meant in a practical matter. So before you introduce yourself, could you just maybe give me one or two lines about what is soundtrack?

Ola Sars

Soundtrack is the most boring music startup in the world. No, it's nothing more complicated than a music DSP, meaning a digital service provider, just like Spotify or Apple Music, but built for the business segment. So we sell business subscriptions of music to businesses and brands around the world. As an example, Joe and the Juice, when they play music in their juice bars, that's soundtrack enabling them to do so.

Jakob

Yeah, and I'm very excited about this talk. I've been looking very much forward to it because we're to talk about your journey as a founder. Even before Soundtrack, you also had a quite interesting journey. So we'll spend some time and I'm very happy you're generous with your time of going through that. Before we start the episode, Ola, you've already touched upon it, but who are you and what do?

Ola Sars

I'm a serial entrepreneur in the music tech space. Would think people kind of refer to me as I've since 20 years back trying to make a living by building startups and. Technology in the music industry, but always with the same goal to basically try to find new ways of growing the music industry. Cause I truly believe that the music industry is undervalued and music as an art form is undervalued and is a massive market in terms of consumption, right? But it's, heavily under monetized. So for me, that was an opportunity to work with something that I love. And help build a bigger, more healthy music industry and more fair and more transparent music industry. And I've been trying to do so by building my own companies and startups since 20 years, as I said, and this is my fifth startup in this industry.

Jakob

Yeah, and it's so interesting, like, you would know more than most. Like the whole journey of a startup with like the highs and then the despair and then the value of death and the way out. And on my own personal journey as a music entrepreneur, so I'm not talking about specific projects, I'm definitely on the value of despair. So like I'm looking at music after 90 episodes of this podcast, this is like, how am gonna make this work? So you've been through that journey and I would imagine you still are at some points, but let's get there. Let's start from the start. How did you get into music? Because seeing the difference between value and what actually is there in monetization, it doesn't just come naturally. How did you start with music and how were you exposed to this problem?

Ola Sars

Sometimes you get tired of hearing your own voice right but I'll reiterate it again and it's actually a true story it sounds like a cliche but... It started, as I said, merely 20 years ago. I was doing something completely different and kind of making a living. But I did spend a lot of my free time with music and with friends that were in the music industry. Every summer we would go to Ibiza. And rent the house and kind of enjoy the vibe over there. Early days, kind of dance music, second revolution, but we were in that market since way back in terms of dance music and that culture, but we would go there in the summer and one of my, the sun was coming up one morning, you were sitting outside the house, one of my best friends, I just realized that... Every year when we went, I was there having fun spending money, but he was there having fun making money. And I realized that there was this, what I called the source matrix afterwards, like where it said like, money out, money in, fun, boring. And he lived his life up in the upper right quartile where he was basically in the music industry, right in the middle of the creative and technology that was happening in the space, making money, being able to have fun at work. And I was there spending money, money out, fun. And then I had to go back to money in, boring. So I decided to try to make a living with one of my passions, music.

Ola Sars

That was the romantic kind of move. I have to kind of take care of my life. If you only have one shot, I have to work with something that I love. Based also on the fact that at that point in time, the whole market was about to move. Digitization was coming all the way from production, which you were seeing all the day. Everyone was using their laptops to produce. That was kind of a new thing back then. Now it's standard. Music was going digital in terms of distribution. At that time it was basically illegal downloads and file sharing, but that everyone figured out that there must be a way to kind of create the healthy digital value chain down the line. And lo and behold, that happened. And then consumption was going digital at same time as well. Like everyone was starting to consume music through their smartphones. So it was one of those kind of, as UVCs call it, tectonic shifts. That were about to occur that the whole music industry was going digital. So both sides of my brain were operating the romantic aspiration to work with something that I love and not feel terrible when I go back home from the summers on Ibiza. And then the other kind of rational part of me seeing an opportunity from a macro perspective, an industry that was going to change and obviously create massive opportunities for companies or technologies that would kind of relate to that digital transformation that the music industry stood before. So that's the story. And I had an idea together with some other friends that was connected to the more kind of digital dance music scene where we were starting to discuss this phenomena with, you know, music curation and actually in a market of abundance, meaning all the music available at your fingertips anywhere, anytime, technologies or platforms that could filter and deliver the right music to the right place at the right time would be very powerful. We had a thesis about building a music recommendation engine back then. So by connecting to the DJs of the world to train machines in order to create a music recommendation engine based on that training data.

Jakob

Mm.

Ola Sars

20 years later, still doing the same thing. Five years later, trying to kind of solve for that music creation dilemma.

Jakob

Yeah. It's interesting because, know, as being a Swede, you were sort of in the middle of that whole revolution, like very firsthand. Were you perceived like as a welcomed outsider or like, did you feel like an insider? Like what was the dynamic between you and the people you were imagining these companies with?

Ola Sars

I mean, back then there weren't a lot of music startups just for the record. We started up a company called Tonium Pacemaker, was for the outside was perceived as kind of DJ technology, which it more or less was because we built the Pacemaker, the world's first pocket sized DJ system, which sounds absolutely crazy, right? But it was basically a hardware with 120 gig drive and two channels.

Jakob

Mm.

Ola Sars

Basically emulating two CDJs 2000 and a Pioneer 900 mixer in one device, meaning that we would open the door for music creativity to the broader consumer markets, which would then foster a bigger kind of music creative movement and allow more people to curate and have fun with music. Rather than just be passive, they would take an active role in the music curation and being creative with music. That would then drive more data to our platform and train our music recommendation engine with bigger volumes of what we called back then for the music mix, basically, or the music recipe. So that was the idea, answering your question like...

Jakob

Yeah.

Ola Sars

Those types of thoughts and entrepreneurial were very, very few at that time. The music industry was still kind of almost trying to kind of fight back any type of innovation. But everyone knew that sooner or later somebody had to kind of solve for the digital value chain and the future of music distribution and music monetization. So we were seen with

Jakob

Mm.

Jakob

Hmm.

Ola Sars

You know, some type of skeptical eyes from the traditional industry, but there were a lot of technical companies coming in, tech companies coming in, trying to find ways for a future model at that time. So we were welcome, but people were skeptical. But we were very few. Mean, it was SoundCloud, was Beatport, it was Tony and Pacemaker. Spotify hadn't begun back then. They were just about to start.

Jakob

Mm.

Ola Sars

And so forth. I felt like a pioneer, to be honest, like trying to find new ways at that time.

Jakob

Mm.

Jakob

Yeah, and that also led to being part of a few other quite well renowned brands. I don't know a lot about the Swedish story, even though I'm Danish and live in Norway, I should know more. But as you know, like Danes and Swedes don't, unless they need to, they don't like automatically connect. But I have heard a bit from Jonas Nødberg, like that journey as well. And like, it's just really interesting to see what happened in the tech scene in music at that time. But... What was the natural transition? That, you know, I know some of that story, like it was a bit tumultuous and there were some that got acquired and some that closed, but like what happened in that transition and how did you go to the places that now is very world renowned?

Ola Sars

Mm-hmm.

Ola Sars

Yeah, I'll try to keep it short here. Well, when we worked with Pacemaker, which was, you would say, ahead of its time in the thinking, and we were a small group of people working with it with this idea of kind of, you know, opening up for a broader music market to be creative in terms of production and curation and mixing and so forth. But we also had this idea about what we call taste exchange, meaning there will be music tastemakers and there will be music tastetakers. And the music tastemakers have always played a very important role in the distribution of music from radio to play listing, right? So we were trying to find a model for that taste exchange where we would create like... a big base of taste makers and that would become the recommendation to all the other music consumers and that would create a very powerful position in the market. Along the way, we got carried away with building hardware, winning design prizes for DJ hardware, DJ software. But Tonium Paste Maker was a very interesting first step. What happened later, as you've heard from Jonas probably, is that the business model was too complex and too capital intensive that we couldn't really reiterate on building the next version of hardware software. But we had built some very unique components in the ecosystem of Pacemaker. One was a simple upload and share platform for DJ mixes, which was called, it was the Pacemaker community for starters, but then we rebranded it to Let's Mix. Which basically was an open door to access a huge repertoire of DJ mixes, which we would refer to as playlist 2.0. So we were a little bit ahead of the curve all the time, which was also our challenge. Before playlists had become kind of a global phenomenon, we were already thinking about the next iteration of playlist, which was the mix, the compilation. But anyway, that...

Ola Sars

When we weren't able to refinance the whole pacemaker project, we carved up the company in different components and I took out the online platform and moved on and built a separate kind of online business or a music server called Let's Mix, which was focused on more DJ driven music culture. But very quickly when we got focused on that business became a pretty significant source for music inspiration or listening platform. Or music service, if you may. And through those years building Pacemaker together with the team, we met a lot of people that were interested in what we were doing. A couple of them came back to me, one team specifically, which was Jimmy Iovine and Dr. Dre, who were building Beats headphones at that time, Beats by Dre. But

Jakob

You

Ola Sars

The idea behind Beats by Dre wasn't to build headphones, it was about building the next mainstream music brand in the US market. In order to do so, one component in their strategy was to have a music service in the middle, differentiated, world-leading music service. Let's Mix, what we had built at Let's Mix, was very close to what they were dreaming about.

Jakob

Hmm.

Ola Sars

More of a curated music experience, more of kind of where music curators and music tastemakers play a central role rather than Spotify at that time, which was more building just a distribution platform, a robot, so to speak. We would want to use Jimmy's words, the New York Times for music. So we would go and build this music service to compete with Spotify and that music service would represent the kind of core

Jakob

Hmm.

Ola Sars

Experience of the Beats brand. So from pacemaker, Tony and pacemaker to Let's Mix, we built a big kind of DJ culture driven music service and then I got acquired, we got acquired by Beats and we turned that company and team into Beats Music.

Jakob

Hmm.

Jakob

It's really interesting because you said it a few times before you guys were ahead of the curve and you know as a music entrepreneur I also know what that means. It means that it kind of sucks. Can you explain that a bit more because if I look at your LinkedIn that like looks like a five and a half year journey and it might you know just seem short talking about it here over like six minutes but what was what was what was going on with you at that point? I could only imagine that you left a career that was probably more than decent to do this.

Ola Sars

Do you mean just during the Tony and Pacemaker years or?

Jakob

Yeah, get the start of your entrepreneurship, but again, I would also argue you ahead of your time now and that might reap its benefits now, but I can imagine that was a similarish journey.

Ola Sars

No, it was terrible. Mean, it was the cost of trying to make a living up in the upper right quadrant is that it's harder. Know, the music industry is not the most logical place. It's full of people who do not really benefit from a digitization and the transparent kind of market space. It's an IP heavy industry which creates additional complexity. I mean, everything that provides the upside of it being amazing, being able to work with the beautiful art of music comes back in your face when you meet all the obstacles that you have to go through. So, We started building technology without the limitations of the IP perspective of the music industry. So was easier in the beginning with Pacemaker. We didn't really face the major challenges of the music industry. We faced the major challenges of building software and hardware early in a Scandinavian market where there was hardly any VC.

Jakob

Mm.

Ola Sars

Companies and no kind of venture capital at that point, we were still able to raise around $20 million and build an amazing platform. But it was a constant challenge for survival. It almost still is 20 years later because it's so much more challenging than just building general software or other types of services. But it's so much more fun, so it's worth it.

Jakob

Yeah, because my question is this and I'll take it egotistical angle. So I hope that's fine because you know, I'm in a startup perspective from music. I'm probably like close to six years in being a full time-ish entrepreneur in this space. And we briefly touched upon it and I've said it a bit in the podcast before, like the last year I've been also testing out ventures outside of music that I've helped build and it's kind of like frustrating to see how fast they get traction and customers and recognition compared to what I believe to be my expertise with this music. And so the place that I'm best at is so incredibly harder and harder to get financing for, harder to find partners, harder to do sales. So what is the motivation? Is fun enough? Is that what's driven you or like are the extra layers to that?

Ola Sars

No, I mean, there's always this romantic perspective of being able to work with something that you love, but there is also a rational perspective. It's in a market that is that hard, then if you succeed, will be one of the few who do succeed. So for me, there was the rational part of my brain figuring out, okay, if I become a expert in this industry and verticalize myself, I will be early into it and I will be ahead of the curve in terms of learning and competence and deploying technology or solutions. So that was a very rational choice to go in early because it was just happening when I entered. So maybe the difference is between you and I is that I started 15 years before. So I had an opportunity to become an expert early. Still with the challenges of course with access to capital and understanding for the digital model as such at that time. But I was convinced that the market would change and that this, it was very simple. Like look, music is everywhere. The consumption of music will not change. It will merely just become more and more global and then access when We have digital pipelines, the access to all the music in the world will be inevitable sooner or later. So I kind of believed in that thesis from day one. That's why I was willing to bet my whole career and my personal finances into the thesis of that the music industry will sooner or later be fixed. And then there will be massive monetization opportunities between the billions of consumers. And the rights holders and creators of music. I will play a role in that. So I was always convinced of that we were doing something right. That doesn't make it easier through the different cycles. But with that conviction, I could reiterate, find energy to get up in the morning. If you crash one company, you start another company, so to speak, based on the same thesis. And that's pretty much what kept me going. I never doubted.

Ola Sars

The thesis that I built the companies around.

Jakob

My question is, the conviction of that statement plus the fun, is that enough? Is there an element of addiction to it as well? Like, how does that work for you? Is it really those two things?

Ola Sars

I mean, no, not really. I'm really not interested in money as a person or fame or anything else. Sounds like a cliche again, I know, but I'm truly not. But I am very focused on the fact that I had the privilege of being born in a country where I can choose my life, to have the luxury of being raised in a family where I can educate myself and so forth. So I'm aware of, you know, how fortunate I am. So why not do the best with that in your life? And if you have the luxury of actually even being able to think about combining work and fun, which I was lucky enough to do, I might as well do it full on. So And then to my personality, yes, do I have grit? Yes, I have crazy grit. Am I the smartest kid in the room? No, I'm not. I'm very mediocre in terms of that. So I'm kind of just smart enough, stubborn enough, but with drive based on a thesis that I truly believe in and reiterating that thesis until... until I succeed. Have I succeeded? I don't know. I'm still working on it. I don't even know what success looks like, but the vision right now is to become the world leading music platform for brands. And I think we're off to good start. It's both a little bit philosophical, both a little bit personality trait. And then coming back to the simple questions like what else am I going to do? What, you know, am I gonna go back to some other career that made me more cynical by the day? No. So I might as well stick around and reiterate and do better every time.

Jakob

We'll touch upon it, but I'll just briefly mention it. Most listeners probably know this. So there was a time with Beats and there was a time with Spotify where you had very key position that was very related to soundtrack as well. But I can imagine, we'll cover those stories, but I can imagine there must have a time that overlap between Spotify business and soundtrack where you could have chosen to alleviate the pains to come. Like where you didn't necessarily need to join into a new... entrepreneurship journey. Can we touch upon that first before we go further into journey? Like when you were at the decision from like you've done really well, like Spotify business leading that you know top of your class in the world, you probably had a decent salary and compensation package, you could probably have chosen to do whatever you wanted by that time. So why choose to do it all over again? What was the things you went through there?

Ola Sars

Both yes and no and the outcome would have been the same anyway. So the reality behind Soundtrack is I co-founded the company, we co-founded the company together with Spotify and I put my personal investment in and Spotify put a personal investment in and we...

Jakob

You

Ola Sars

We were off to the races to kind of build on this basic thesis that what happened in the consumer markets for streaming will happen in the business to business markets for music. And we'll probably get into that more detail later. And the result of that joint venture was that the product would be called Spotify Business. And then there was one product called Spotify Enterprise. So... Yes, the idea was to build parallel innovation for Daniel and Martin at Spotify. And the idea from our investors at the time at Spotify at that time was probably to build it out and then integrate it to Spotify. But I was very clear with them from day one that I have no interest in working in a big corp or, you I'm interested in building my own thing. With our team to build a new Swedish brand, a new global leader. I was super clear on that, but then I didn't know. Obviously, you never know if you're going to survive a week or two months or two years or 20 years. So of course, it was a strong partner and a very good kind of initial incubation as a brand to test the market thesis of music streaming for business. And it proved out to be Yeah, people want to buy music streaming even if you're at work, know, lo and behold. And then we had the discussion of like, okay, it's time. I've proved the thesis. I now want to take the step to full independence. That obviously took four or five years because that's how complex it is to build your own licensing stack and build your you know, your independence in terms of technology and so forth.

Jakob

Mm.

Jakob

Good.

Jakob

Hmm.

Ola Sars

Some internal catastrophes and a COVID pandemic on top of that kind of took us into 2018 when we launched and then in new troubles and then 2021 until we really had a solid base coming out of COVID. So it wasn't easy, but it was always the plan to build an independent brand focused on one thing only. And that's becoming the category king or queen of the of the B2B market for music.

Jakob

At least from the outside that seems like it's such a strong leverage position to start something like through a very well at the end it was still powerful but like a powerful company and being able to spin it out. But let's just quickly touch upon how you ended up with Daniel and Martin. Obviously their work has been quite influential in music. So can you just walk me through what happened with Beats Music and how you ended up with Spotify?

Ola Sars

Yeah, once again, there's a long story and there's a short one. I'll try to keep it to the very short one. So Beats Music was the, I would say, kind of the real competitor to Spotify early and they were stressed out about Beats. I knew that because I'm from Stockholm, raised and born and Spotify was here and we knew each other. And I was over there, over here and over there building it for the Beats brand. When fast forward through 100, know, kind of close to dying moments at Beats until launch and we were, you know, successfully acquired by Apple. Obviously, there's no place for me in that equation, neither for me personally or the way that... I am or anything and I moved back to Sweden and kind of got back to Sweden. I actually never moved my family. I was traveling back and forth all the time and I was also terrible. I came, you know, back out coming out of the beats to Apple reality with a very simple idea that was what happened in the consumer markets, which we were at the forefront of both at Spotify and at Beats and then Apple Music would happen in the B2B market and I went to Daniel together with my co-founders and we presented an idea that's, hey, we want to build this B2B version of music DSP, which is by the way, completely different. Product. It's like a SaaS business with multiple users and multiple markets and, you know, thousand retail outlets and centralized control and blah, blah. But with the same logic of, you know, sourcing music from the rights holders through a sophisticated software stack into global distribution. I think I need to spend time on the actual customer interfacing part of that software and product.

Ola Sars

It would be great to have a partner that actually had a music backend service in place that we could kind of borrow while we tested the thesis. And that was the basic kind of logic of the collaborations. Okay, if we can use the Spotify backend service, I can focus on what does the SaaS business look like for brands and businesses around music distribution. And by doing so, let's move into a joint venture. Where Spotify AB, which is the mother company invested together with myself into soundtrack. And then we built Spotify business, Spotify enterprise together and launched in the Nordic markets to test out the concept. So we spent roughly three years, three and a half years into kind of building and reiterating and kind of getting strong signal that yes, there is a music streaming market and it's a multi-billion dollar opportunity. And it's growing the pie, not cutting the pie, which will be well received by the industry sooner or later when people get their heads around it. And it's strong enough to be its own multi-billion dollar business. So I want to have the optionality to also move away from home, so to speak, and move from the Spotify world to soundtrack and build what I set out to do, which is a leading brand within this vertical.

Jakob

Mm.

Ola Sars

So the story is we were partners, they're still shareholders, we are friends, we on a personal level, you know, run into each other here and hang out with some of the people leading the company and owning the company. But Soundtrack is today a completely independent music DSP built to unlock the global market for music for business.

Jakob

Mm. I might seem like a broken record, but since I'm in the presence of such an established entrepreneur as yourself, I would like to ask it again and just be super clear. You have said many times in this interview so far, close to die. And then you also said something really interesting, which Naive Young Me also reacts to is you partner, you're very established, you have a cofinancy that's established, you're partnering with one of the most established, powerful companies in the world to test a thesis and that take three and a half years. Is that a reflection of the industry or how diligent you were? Again, these are all combination of the essence of being a music startup. How do you tie those things together?

Ola Sars

Well, back to my point in the beginning, it's like it's the music industry is easy to think about business ideas, extremely hard to execute business ideas. So as an example, if you come up with, I get a hundred emails every year. On people contact and I don't want to sound arrogant or anything just for the context of it because I understand I'm one of them myself. I also want to make a living in the music industry also you know had the dream of kind of working with one of the things that I love the most. So I'm just giving the example to show you how hard it is and These emails say, we have this idea. Can we use your platform to build a jukebox for music? Like we think it's a revolutionizing thing to build jukeboxes and kind of digitize jukeboxing. Yeah, that's one of the first use cases we thought about. But in order to do so, you got to... raise a hundred million dollars and build infrastructure and do licensing and show the rights holders that you pay, you live up to your promises and a million other things before you can even get to the point of talking about different monetization models based on the licensing and infrastructure that you built. So that's just kind of an eye opening statement that It's capital intense. It's much more complex than anyone thinks to actually do it the right way. And if you want to build it the way, you build a long-term global market leading technology stack, you got to do it the right way. You have to.

Ola Sars

Do the 13,200 licensing deals. Prove that you can build the infrastructure to support and respect their IP and monetize their IP and report and reconcile in time and be a good partner and understand the different dynamics in between labels, publishers, PROs and blah, blah. Go on all night. So. It's easy to love, it's easy to come up with creative ideas, but extremely hard to execute. So if you understand that, then it doesn't help you. I know it just maybe makes you more depressed and like, shit, it's worth it. It's never going to work. I'm not saying that, but you asked me what it is. And I've learned that the hard way, like by failing multiple times and not doing it the right way and then learning how to

Jakob

All

Jakob

Hmm.

Ola Sars

Do it and do it again and do it again until the point. But if you would start like an initial discussion with someone, you know, 2015 and say, hey, I'm going to build a background music service. I need a hundred million dollars. They would be like, screw that. You may be need a you know a million dollars and you can go to if being get some license off the shelf you can upload some tracks from iTunes and you can you know, you don't have to really report to the you know, that's not how it works You have to do it full on if you're gonna do it And I think that's what represents the music industry and that's what makes it so damn hard

Jakob

Hmm. Yeah, there's also like the internal personal controversy with your friends and families and again, I just from a from a personal side like I've been a full-time entrepreneur for five years and Yeah, I would say for the young person I am I'm relatively successful like people know my name internationally I help a lot of companies we build up stuff like we're pretty good at what we do But for me just pulling out a salary each month, it just hurts Like I know I'm compromising the business and you know have three small kids, I have a house, like I have a life. But still like for me that's just so conflicting to live in that spectrum. You know, I know I'm good. Yeah, I not be the best but I'm good. And at any metric in the real world outside of music, I should have been compensated very fairly. But that's not the reality I live in. I guess that's the truth for any entrepreneurship journey. But it rings particularly true, you know, I've done almost 100 episodes of this podcast in music. And I don't know how many people that goes into music entrepreneurship realizes that, but at least from my sake now, like I know what I'm going into, you know, my wife is fully aware. Like, you know, I might be an idiot or I might be a genius, only time will tell the next 15 years, if that makes sense. But I guess that's the reality of this space.

Ola Sars

Yeah, and I want to give you some positive feedback on that. And, you know, I might sound like a gloomy old man sometimes and a doomsday professor, but... Like I still believe now I started early. That was my upside, I think. And I just decided to learn what is this. And it wasn't defined yet either. So I had the luxury of living through the definition phase of this industry. That was timing. And sometimes you have good timing, but I could have left a hundred times. I didn't. So I earned it. But even now, 2025, Goldman Sachs estimates that the global consumer market for music streaming hasn't reached even 20 % penetration yet on smartphone. So we're still only in the beginning of the digitization of the music industry that we foresaw 20 years ago.

Jakob

Yeah.

Ola Sars

So there's still going to be companies that die out and companies that come in and successful and there's still going to be opportunity to find new angles and find new ways to serve the future of the music industry. It's only the beginning.

Jakob

Hmm.

Ola Sars

And, I mean, I think that's what the capital markets kind of discount into Spotify right now. They're giving them some reward for showing that this model works and it can grow at these volumes. I mean, every quarter they come in on plan. It's amazing. And they're improving their profitability and it's just the beginning and they're going to stay laser focused on becoming the global platform for consumer audio. So it's only beginning. So if you're really kind of in love with it, like I was, I

Jakob

Hmm.

Ola Sars

Think you can just stay in there and learn sooner or later that angle will come up. But the angle, I think one thing that I want to send with you and other people who are looking for a way to make a living in this space is the key is being

Jakob

Mm.

Ola Sars

The technology or service provider that presents a very clear synergy. And what that means is that you have to present something where everybody wins. The rights holder needs to win, meaning either the label or the actual artist behind the label. The publisher needs to win or the composer songwriter behind the publisher.

Jakob

Yeah.

Ola Sars

The music industry needs to win in combination with yourself and the user of the technology. So it doesn't work if you're trying to trick the rights holders or kind of use their content for something else. It's not going to work. It needs to be this one plus one becomes three. And I think that is something that a music entrepreneur needs to bear in mind. A lot of controversies were startups in the beginning created stuff that only worked for them and the consumer and didn't do the right thing backwards. None of them are left. The whole same discussion showed up in music AI and generative. I don't think that the companies who haven't been ethical in their sourcing of training data will survive. So it needs to be correct and synergetic and legal.

Jakob

Mm.

Jakob

Mmm.

Ola Sars

And down the right way for it to work. There are no short cuts in the music startup space.

Jakob

Yeah. And that sort of leads us to the statement you did at the start of the podcast. And that is the mission to growing the pie. And again, it also returns to the first real realization that I had what that meant, practically speaking on the Music Business Worldwide podcast. So this is sort of the journey you're on now. And I think that was the strongest statement that you could have converted me to. And that's where Soundtrack Your Brand is right now. So... As you probably mentioned, that's sort of what kept you focused on the purpose of these businesses all along. How's it going with Soundtrack? Sorry, not Soundtrack, right? Soundtrack now. Where are you now? What's the market penetration? Where are you going? Where are you as a founder taking this?

Ola Sars

Yeah, just connecting to your growing the pie statement and kind of for people who didn't listen to that. Like for me, the music industry is great in many ways, but it's also highly dysfunctional. One major dysfunction in the industry is that the industry is full of pie cutters. Like what I mean by that is people who look at their IP or their music and they try to grab as much market share or piece of the pie as they possibly can. But they're not thinking about how big the pie is. In comes consumer DSPs or Beats, Apple, Spotify, who all of a sudden started baking a pie. Like the money that we're then going to distribute, the money that we are collecting from consumers for the consumption of music. That now grew the pie bigger than it's ever been before through streaming. And then that is distributed through the digital value chain. And you all know, everyone complains to Spotify and so forth that they're not paying enough, but they're sharing, you know, more than 70 % of the revenues they generate to the music creators as such, meaning the label, the publisher, the artist and the songwriter, how the music is distributed after Spotify gives them more than 70%. They cannot affect that, but they're still taking the heat. Because it's not too much and people think that they should build a service without being able to keep 30 % of what they generate in that big pie. Pretty much in between the lines you hear what I'm saying. It's easy to be a pie cutter when somebody else baked the pie, but it's really hard to bake the pie. So by building the consumer, these peas that I've been part of, we have built the pie and that pie is now every year growing more and more and then the pie cutters can cut that pie best they can. But very few in the industry are pie bakers. The majority of them are pie cutters. That's an intrinsic problem in the music industry. But that's from a traditional IP driven industry to technology industry. That's changing as well. And people don't, they understand what that means, but they don't really know what they can do about it. So they kind of default into doing their job, which is trying to cut the pie. That's, you know, that's what I meant.

Jakob

So interesting. Yeah.

Ola Sars

And but the good news is when you come into the music industry with an idea, idea back to my comment about it being a synergy, it's not great to come in with a business idea that just cuts the pie differently or, you know, create more cost in already kind of dysfunctional value chain. If you come in with an idea of, hey, here's an opportunity to grow the pie. And that's what soundtrack was all about. It was this incremental revenue opportunity for the broader music industry. Let's monetize businesses correctly because they are not being monetized correctly. Let's move the music that you hear in your favorite bar or in your favorite retailer, cafe, whatnot, onto the digital value chain and let's monetize it and redistribute the royalties correctly. So our thesis is that

Jakob

Mm.

Ola Sars

The B2B expansion of the B2C market could add another 20 to 30 % incremental growth for the music industry. That's just right there in front of them. It's just not being monetized today. So that's a pretty good position to be in. At the same time, we're saying, hey everyone, in a market where consumer prices of subscriptions have seen a five year long negative trend in terms of ARPU, revenue per subscription or user.

Jakob

Thanks.

Ola Sars

I mean, current art pool worldwide is below five bucks. Everyone thinks it's, you know, 12 bucks, but on a global average, it's at 480 or something. B2B, we're charging $50 for a subscription. That's one of the few tangible examples of someone extracting more value from music on a subscription basis. That also helps. That's synergy. That's something that the music industry likes, you know, extracting value for the art of music.

Jakob

Hmm.

Jakob

Hmm.

Ola Sars

That's what you need. So answering the question of how is it going for Soundtrack? Not as good as I think we deserve, but slowly we're getting there. We've invested our time, all the money we have and raised a lot of money to build the world leading platform for monetization of the business market. And we're just about to kind of take off to the second half, but it took, you know, $100 million and 50 close to death experiences to get there like it always does.

Jakob

Amazing. You know, I'm walking the journey that you have taken and the near-death experiences are so real. And I appreciate that you continue. I do still, I don't have absolute clarity, and maybe it's just me who don't understand the motivation for growing the pie. Where does that come from? Is that out of fairness? Is it love? Like, what is the underlying? Motivation beyond reasoning or fun. It's not that I'm saying it's not enough. I'm just, have a hard time fully comprehending what drives you that much for that concept.

Ola Sars

Well, it's both again, and I think that goes through every of kind of your more personal questions. Why the hell are you here? I think it's this combination of soft and hard facts, like, or both sides of the brain. You know, genuine belief that music, without music, the world is absolutely worthless. Like it's... For me, it's been such an important part in every part of my life and it's connected to everything. There's a soundtrack of Olazard's life and without that, my life would have been shit. For real. And I'm not just saying that on some music startup pod like everyone else. Every sequence of my life has had a soundtrack and my memories go back and my upbringing and my friends, it's all related to music, to the small kind of finding a track and waking up one morning and saving the day. So it's such an amazing component in my life and in everyone's life. So it's really, and that also indicates if it's that strong, it's so robust as a business. It's never going away. It's just going to grow. So now moving over to the rational about like And consumption data is just proving more and more consumption. The digital value chain sooner or later, wins and transparency wins. So the Delta between the consumption and the monetization will be fixed, but it's massive. And that Delta is always the rational for me to get up in the morning to go, let's go build a multi-billion dollar business. And at the same time, flow through royalties, well-earned royalties, through a transparent value chain that doesn't end up in a black box somewhere in some private equity company's account, but flows through all the way to the actual creator and what she did that day when she had an amazing experience by the piano. That's where the money belongs. So there's an ethos of fairness and kind

Ola Sars

Pissed off at a dysfunctional industry that technology should be able to fix something that just people are trying to avoid. But slowly technology is winning thanks to, you know, Daniel and Martin and what we built previously. It will win. It will prevail. And the transparency will occur and the market will unlock itself to become a big financial opportunity as it is cultural opportunity. And that's what kind of is this romantic intellectual combination, which you couldn't ask for more to do in the daytime when you're, you know, at work. So I don't think it's that much drama like that. I figured that out early. It's easy to, it's easy to think about it. It's hard to do. Yes. But here I am.

Jakob

That's amazing. A few times on the podcast I've joked with this, but me and my wife like to separate things a bit with work and Pride family. And she's never heard an episode before of the podcast, even being one of the largest podcasts in the world. But this is actually gonna be the first one I'm gonna ask her to listen to. And the reason for that is I struggle with that question every single day. And I do know the answer, but it's so refreshing hearing it formulated so clearly and precise, because that is how I think about it as well. But... As an entrepreneur, it can take years making those interim motivations clearly communicated to oneself and the one around you. So, Ulta, thank you for being on the podcast. That was what I needed right now, and I hope there's a lot of entrepreneurs out there, and I do hope my wife also listens to this and understands a bit more. She does support me, but again, that's so important. Ulta, it's been brilliant. I'm looking so much forward to following your company for years to come. You've definitely been an inspiration. I've now crossed two people off my list that I really wanted one and a half years ago when I started this podcast. So thank you.

Ola Sars

Thank you for having me and I hope I gave some hope and not just the gloomy reality of success rates in this industry, but like the pluses win over the minuses at the end. So just stay in there.

Jakob

Thank you. Thank you, Ola. We'll talk soon.