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Former Ticketmaster CEO Nathan Hubbard explains why live venues are leaving money on the table

Hubbard says they need his startup Rival, which will publicly launch next year.

Nathan Hubbard Courtesy Nathan Hubbard

Former Ticketmaster CEO (and Twitter commerce boss) Nathan Hubbard is building an “operating system for venues.”

So: What on Earth does that mean?

On the latest episode of Recode Media, Hubbard explained his new company Rival, which will publicly launch next year. Behind the scenes of live music concerts and sports events, Rival will partner with the teams, performers and event venues to help them lose less money to scalpers — and know more about their customers.

“If you go right now and search for ‘Hamilton’ tickets, there are tickets spread all across the web,” Hubbard said. “It would be the equivalent of searching for a flight and seat 29A is on one site and row 14 is on another site and half of first class is on another. There’s no canonical source where you can just go, ‘What’re all my options to go see the show tonight?’”

He said the venues are losing out on $15 billion in ticket sales every year because buying tickets when they go on sale is “uncomfortable” for consumers and the shadow economy of secondary sales causes a vicious cycle. The official entertainers can’t provide better experiences for their fans because they have no idea who is actually in the audience; Hubbard says Rival will know, and will help spread the word about lesser-known events.

“They know less than 10 percent of the people who walk in the door,” he told Recode’s Peter Kafka. “And that’s crazy from a customer-relationship management standpoint because they’re conducting all their transactions online and mobile. That’s like if you had a dinner party and you only knew one out of 10 people who walked in your door.”

“I keep avoiding saying ‘ticketing platform’ because ticketing’s kind of the easy part,” Hubbard added. “Ticketing is, how do I get that person in the door. The question is, now that I know who they are, now that I solved that problem of only knowing 10 percent of my guests, now I know 100 percent of my guests, what do I do with it?”

You can listen to Recode Media wherever you get your podcasts — including Apple Podcasts, Spotify, Google Podcasts, Pocket Casts and Overcast.

Below, we’ve shared a full transcript of Peter’s conversation with Nathan.

Peter Kafka: This is Recode Media with Peter Kafka. That is me, I’m part of the Vox Media Podcast Network. I am here — like you care — at Vox Media headquarters in New York City. If you like this show, tell someone else about it.

That’s Nathan Hubbard murmuring in the background. Hey, Nathan.

Nathan Hubbard: Hello.

You’re the CEO of Rival.


Former Twitter executive.

That’s right.

The bio here say you were formerly at Live Nation but you ran Ticketmaster.

I was CEO at Ticketmaster, yes.

So people are interested in many parts of your career. They probably cursed at you not knowing who you were for a long time.

I’m sure of that.

Because they hated Ticketmaster.

I’m sure of that.

I think that they might curse at you now, too.

Why would they do that?

It’s a rough-edge business you’re in, the ticketing live event something-something business that you want to disrupt.

I don’t think they curse at us, though. I think, I hope, I think they’re cheering for us.

I was Googling.



Oh, boy.

There’s a Billboard story about you. I don’t think of Billboard as someone who writes rough-edged articles.


You know which one I’m talking about, right?


It’s pretty snarky for a Billboard article.

Oh. Well, good.

Here’s the subhead, I guess, or maybe it’s the lead, “Most of what Hubbard is planning has already been done.”

(laughs) We’ll see, won’t we?

Yeah. We should end the podcast there.

Yeah. Was I interviewed for that?

You don’t seem to be interviewed.


You don’t seem to be quoted in here.


This is the day you announced what you were doing at the Wall Street Journal and also at Recode.

That’s right.

With my colleague Jason Del Rey, who’s awesome.

Oh, maybe that’s why it’s snarky.

Oh, because they’re mad because they didn’t get the interview?

I don’t know.

Yeah, I’ve written an article or two like that where I’m a little angry that I didn’t get the access.

I don’t know anybody over there. I don’t think they reached out.

This person was ... all right, we’ll talk about Billboard later. Let’s back up.


What are you doing?

I am running an amazing company. I’m having the best fun of my career, running a company called Rival, that my co-founder, Ryan Lissack’s here today. We are building a technology platform for the most coveted live events on the planet. What does that mean?

Is this something you’ve been working at for a couple of years.


I heard you tell me about it, but you didn’t want to talk about it publicly. I was confused about what you were doing. You announced what you were doing earlier this year, this is May, this article is from. Still confused about what you’re doing, I think in part because you say “technology platform for ticketing and live events.”

Yeah. Look, we’re an operating system for venues, but what we’re focused on are those events where the biggest artists, the biggest sports teams in the world are playing, because the underlying dynamics in those environments create the fan shitshow that everybody cursed at me for in some of my old jobs. Right?

Because when there’s disparity between supply and demand — there’s only 20,000 tickets to see the Golden State Warriors and there’s two million people who want them — the experience of selling those, of managing access and inventory and security through that process is, so say the fans, an uncomfortable experience. That two hours when the team’s on the court or the artist is on the stage, is electric.

People like going to the thing, they like watching ...

They like being there in the seat for two hours.

They’re willing to pay some amount of money for the thing.

But the experience around it is foundationally broken. If you go right now and search for “Hamilton” tickets, here we are in New York, right?


There are tickets spread all across the web. It would be the equivalent of searching for a flight and seat 29A is on one site and row 14 is on another site and half of first class is on another. There’s no canonical source where you can just go, “What’re all my options to go see the show tonight?”

As you know, the on-sale process is still a painful experience for people and that’s because when two million people want 20,000 unique SKUs at 10 a.m. on Saturday morning, that’s actually a kinda super hard engineering challenge to solve and a consumer experience problem to solve.

There’s still billions of dollars that leaks into the secondary market. $15 billion this year will go into the secondary market on the backs of teams and artists because they simply don’t understand how to price their product properly.

At the end of the day, it’s even worse for teams and artists. They’re losing that money on some of these largest events. They know less than 10 percent of the people who walk in the door. And that’s crazy from a customer-relationship management standpoint because they’re conducting all their transactions online and mobile, but they only know 10 percent of their customers. That’s like if you had a dinner party and you only knew one out of 10 people who walked in your door.

We’re going to back way up. So, first of all, who is your customer here? Is your customer me or is your customer Madison Square Garden?

So there’s a two-sided marketplace, right? We are fundamentally enterprise software that helps these teams and venues and artists run their bank.

So, your customer is the venue and/or the act.

That’s right. It starts with the team and the venue, really, because in these large venues, it’s that anchor tenant, the sports team, that makes the decision about what platform they’re going to use.

I keep avoiding saying “ticketing platform” because ticketing’s kind of the easy part. Ticketing is, how do I get that person in the door. The question is, now that I know who they are, now that I solved that problem of only knowing 10 percent of my guests, now I know 100 percent of my guests, what do I do with it?

But, I want to keep backing up. Right? Because the frustration that I have as a consumer about it’s too difficult to buy tickets, or I can’t buy tickets or I don’t know where the seat is. Part of that, you could improve and maybe that would make me happier and maybe I’d be more likely to spend.


But it also seems like, from everything I can tell, most people are going to a couple of these events a year, they’re going to the event because they want to go to that event and whether they’re treated poorly or not, they want to go.

The thing they’re fundamentally unhappy about is they either can’t buy the ticket or the ticket is too expensive. You can’t fix that, that’s a real estate problem, that’s a basic supply-demand problem. You can’t make more NBA games.

That’s right.

You can’t make more Springsteen on Broadway.

That’s right.

So you can’t fix any of that.

That’s right. And I think, in my old job as CEO of Ticketmaster, I think Ticketmaster takes bullets and gets unfairly blamed for limited supply, and I’ll let them tell you about that. Now that’s not my job. But I would argue two things. One is, the live event business continues to grow low-double digits year over year. There’s a huge opportunity to continue to grow that, because when you look at other onsite experiences and the way they monetize those customers, the live event industry is just starting to scratch the surface on ways to do that.

So there’s ways to take the customer base that’s already said, “I want to pay x amount of money,” or, “I want to pay something to go see something live,” even though we’re in a world where everything gets streamed, the value of seeing something live is maybe even more important to me than it ever has been.


And you say we can extract more value out of that demand.

Absolutely. If teams only know 10 percent of their customers today, if the venue only knows 10 percent of the people walking in the door or 20 percent of the people walking in the door, there are sort of a force multiplier you can put on the number of customer relationships you have and the experience you can provide to that person.

If I don’t know you in the same way that Amazon knows you extraordinarily well, it can build a great online experience, these venues should know you intimately well to be able to provide a great experience for you.

I gave some of them my credit card, my email, they know that. Right? Maybe I sold the ticket but ...

Sometimes, but if you bought it through anonymously, if you bought a piece of paper through a marketplace like StubHub, they have no idea who you are. For those high-demand events, there’s tons of activity in the secondary market. And suddenly, they don’t know these people walking through the door, which, again, is crazy from a customer-relationship management standpoint, it’s also crazy from a security perspective.

If we need to know everything about 100 people getting on an airplane, maybe we should know something about 100,000 people walking in a stadium.

Right. So the pitch is, I’m going to make you more money, I’m going to make this thing safer, and/or I’m going to reduce liability for you.

Yeah. Rival makes teams more money, it introduces them to all their fans and it keeps everybody safer.

I talked to your old boss, Michael Rapino, for a podcast like this a couple of years ago. It seemed to me — and he was talking about the push he was trying to make both Live Nation and Ticketmaster more consumer-focused companies. It seemed to me that that sounded good, but also kind of beside the point. Because again, if I want to go see the Warriors play or Springsteen play, I don’t care where I get the ticket from, I don’t care whether it’s a good experience or not, fundamentally.

I disagree. The Warriors? You might be right. But the Sacramento Kings? The New Orleans Pelicans? They’re having to hustle to sell tickets.

The things I don’t want to buy, I still don’t want to buy. If you make it easier for me to buy, then maybe, but it’s like a Groupon. Right? Like, if you give it to me half off, sure, maybe.

Here’s what I would say: We are chemically wired to be together as human beings.


So many of our daily experiences now are being confined to these individual, solo — look, staring at my phone — mobile, solitary experiences.


So, the move from things to experiences is as much about cultural/generational stuff as it is about continuing that human interaction.

But again, I either want to go to the thing and be around people or I don’t. You making it, reducing friction, making it easier, those are all nice things to have, but if I want to go the thing, I want to go to the thing. You saying, “This thing you didn’t want to go to? I’m going to make it easier for you to attend.” I don’t see the upside there.

I think, and Michael probably spoke to this when he was here because he’s the smartest in the world about this, there are a wealth of fans out there who have no idea about the events that are happening. There’s a massive awareness opportunity.

Coldplay came to town, somebody didn’t know. There’s a Yankees game tonight, Yankees play the Red Sox, three-game set this week, people didn’t know. So, educating those consumers on what’s happening, but also enticing them to come out, part of the friction in getting people out, I disagree with you that you either absolutely are in or you’re absolutely out.

There are people who are looking for things to do. Eventbrite’s about to go IPO based on this exact premise, right? Which is that people want to get out and do things. So A) you can increase awareness, but B) there’s a ton of friction in going to and experiencing that event.

Now, with these buildings like Madison Square Garden, like Barclays here in New York, like all the massive arenas and stadiums around the world that have been built in the last decade with consumers like you in mind saying, “Hey, I want you to come out.” This is more than just sitting in a plastic seat for two hours and staring at what’s on the court. This is a set of experiences, it’s food, there’s all kinds of activities you can do, there’s family-oriented things. So they’re sort of creating mini theme parks almost to get people out to those experiences.

I think there is a big, big swath of customers who are casual event goers, who, if you eliminate that friction to going, you can grow the market tremendously.

So, I’ve got you all peppered up, you’re in sales mode, you go to the Warriors, you go to Madison Square Garden, you go to Michael Rapino, you say, I’m going to improve this business for you. Aren’t they telling you, “Well look, our business works great. We’ve got great vendors or we are the vendors and, by the way, this is a real estate business, there’s only one person who has access to this amount of real estate and that’s us. Thanks, but no thanks.”

No, I think what they’re saying is, “We see the opportunity to get to know our customers, we know the kinds of offers and opportunities we’d put in front of them if we got to know them. If we had the underlying enterprise software to do that, we’d be thrilled. Can you help us?” That’s what we hear.

If you’re successful in making this sale, do you have customers?

We do. Our first client, which is still confidential, will launch next year.

Launch next ... calendar next year?


Who are you displacing? When people are writing the check to you and saying you’re in, who are they removing?

Existing ticketing companies that power their platform


Could be, but people ask about that competitive piece all the time. The thing that’s different about Ticketmaster versus all the other primary players is Ticketmaster has built up and has — and I’m super proud of the work that they’ve continued to do — an amazing consumer-facing site.

Every other ticketing company doesn’t really have a ... Ticketmaster competes with StubHub for the customer, competes with Vivid Seats for the customer. What we are is really a back-end platform that lets the team or the venue manage their inventory, manage access and put — and the second piece of this, and we can talk about this because this is some things I worked on at Twitter, push that inventory to wherever they want to sell it.

Using the Rival platform, ostensibly, somebody could sell through Amazon, through their own sites, through StubHub, through Ticketmaster, if that integration took place. I think the back-end piece of what we do overlaps with some of the things that Ticketmaster does.

When we say the people, it’s really Live Nation/Ticketmaster, right? There’s a handful of players who ...

There’s hundreds of millions of tickets.


Three-quarters of baseball is not on Ticketmaster. The Staples Center in LA, LeBron’s old home in Cleveland, the O2 Center in London, which is this Madison Square Garden equivalent in London, not on Ticketmaster. So there’s a big world out there.

So, two different categories, so two different questions. One is, is your business is the idea, “Well, we’re going to the places where Ticketmaster isn’t because we can’t get in where they are. Or we legitimately think we can live in a world where we work with Ticketmaster.” Because it seems to me that Michael Rapino would say, “That all sounds great, but we would like to own more of the business, not less. We have technology, used to work for us, we can do this stuff that you say you’re doing.”

Well, that remains to be seen. I think that they are as much a partner for us as they are competitor. We look at a whole world out there where they aren’t. We look at a whole bunch of tickets that are sitting on platforms that are far inferior, I think, to even the standard today. And we go get them.

This is an interesting business that you’re in because you mentioned Eventbrite, they’re going to IPO, and I’ve heard the folks at Live Nation say for years we think these guys are real, genuine competitors for us. I would’ve thought, well, if you keep saying that, at some point you’re going to buy them or squash them. So they managed to make it through and they built up a business that’s big enough to be an independent ticketing company


Most of them don’t. Most of them fail, get bought, get squashed.

I disagree with you on that.


I think the e-commerce for live events in more vibrant than it ever has been. StubHub is a multi-billion dollar company. Vivid is a multi-billion dollar company. SeatGeek just got valued, presumably, incredibly high.

Right. I was going to say, and as a counter, you have these secondary guys.

But most of them now, because there is so much competition and they are growing so much, are saying, “I can compete in two ways. I can either compete on fan experience and/or I can compete on inventory,” having something that’s differentiated. “And if I’m going to compete on inventory, I need to be the system of record, that underlying platform, so that I’m selling the ticket the first time.”

That’s primary ticketing and, just as what we did at Ticketmaster, you know, our baby when I was there, was that TM Plus product that put primary and secondary together on the same map. SeatGeek is now moving into that and has bought an Israeli ticketing company so they’re now sort of primary/secondary, they’re doing the Cowboys and the Saints and a few others.

You’re going to start to see the market blur the line between primary and secondary ticket because those words are not fan words.

No, not at all. And you don’t know ...

No fan gives a ... right.

I go to Minnesota once a year. I go see a Twins game once a year.


And I check out the different apps. I’m curious, but I also use SeatGeek because your pal Bill Simmons had a deal with them and I got 20 bucks off or I got 20 percent off my first ticket.

Oh, you’re welcome.

You’re welcome. It’s totally unclear to me where the ticket is coming from.


It looks legit and I get in with it, so I’m fine with it.


I’ve played around with enough of the different apps, they all kinda show me a picture of what the seat looks like ...


... what the view looks like. I don’t know — or I shouldn’t know or care — if it’s a primary ticket or a secondary ticket. And it seems to me, in a world where the consumer doesn’t know or care where this stuff is coming from, that it’s very difficult for new companies to come up, because in the end you’re still selling the exact same product: A seat at a game.

Two things. One is the consumer does care when they walk up to the gate, they have a fake ticket, which happens ...

That’s bad. Yeah.

... hundreds of times a night at big events. But secondly, it’s a supply-driven business.


There’re only 20,000 seats to the concert, right? Or to the game. And so, there’s an underlying platform that has to power that. And I can’t believe at the beginning of the podcast we had a 20 minute debate over whether or not the experience is great or not. We can go search fans’ frustrations and it’ll tell you everything that they want. It can be and will be made better.

I think no one has taken ... By the way, you said that, in talking about Eventbrite, when I was CEO of Ticketmaster, there were two companies I woke up terrified of. It was Eventbrite and it was StubHub. It was StubHub because they owned the end consumer, and it was Eventbrite because they were starting from scratch with equity and great engineers and a totally blank slate. From scratch, they could’ve built a platform. Now, they chose to stay in a lane that, to their credit, and I admire Julie and Kevin tremendously, will produce a company that went public.

To fight StubHub, we went after their business. We went deep into secondary, and that kept StubHub in their lane, so far anyway, at least. The fan doesn’t care, but the experience is still not a great one. No fan wakes up and went, “That was awesome. I loved that entire process.” A lot of these products are single-start apps in the app store, but nobody has done the hard work.

It is hard, long work, and that’s why this is a VC-funded business, by the way. Not every business should be VC funded, for us it is, to build out the richness and robustness of the enterprise software that it takes to run a Madison Square Garden. That takes years to build, coupled with, “What is the hardest e-commerce challenge on Earth from an engineering perspective?” Which, again, is when two million people want 20,000 unique SKUs that can be bundled all together all at 10 a.m. on a Saturday morning. That’s a really difficult thing to do.

For the last two decades, nobody’s done that hard work. Everybody has replicated what StubHub built, which is effectively a marketplace to exchange anonymous pieces of paper. So Rival, for the first time in 20 years or so — after the advent of Cloud, after the advent of modern SaaS architecture, camera and visualization technology, mobile — is building from the ground up that operating system. Again, nobody’s done that in 20 years. When you say, “Lots have come in and try and fill ...” I disagree.

You mentioned Amazon briefly.


Last year, lots of folks thought Amazon was going to get into this business. It seems like a business that Amazon would come crush, right? They can come crush anything. We just had a presentation from Scott Galloway at our Code Commerce thing, and he talked about, they’re the equivalent of the Allies and the U.S. with their defeating everyone else just with more gasoline, right?


Essentially unlimited resources. So this is something where they can buy their way into the business. They also have direct access to the consumer ...


... and you would think their pitch would be really effective, which is why they’re going to, “Buy our way in and/or we’re going to help you guys sell all your unsold inventory.” A year later, they don’t seem to have gone anywhere with that business. What do you think stopped them, at least so far?

It’s a supply-driven business and they don’t have supply. You could build the most beautiful consumer-facing interface, but if you don’t actually have supply, it doesn’t matter.

Which we just spent 20 minutes talking about, right?


You either have the Beyonce ticket or you don’t.

And they do not have ... For all the other areas of their business, they have supplier tools, whatever, 50 percent of their business comes from third-party sellers, and they can upload their inventory onto Amazon. They had none of that. So you’re building this beautiful ... It’s trees falling in the woods...

It’s like we’re in a rabbit hole because you were just explaining how you were going to get into this business even though it’s supply-driven, but just ...

Because I’m doing the work that they didn’t.

But let’s park that for a second.

No, that’s the right question. We are building the underlying enterprise software to actually manage supply. They built just a consumer-facing interface.

So you’re saying, “It’s worth you, X Stadium or X Team, to give me your business because I will actually do something with it that Amazon can’t”?

Yeah, you’d be able to sell it through Amazon. Amazon’s built a bunch of stores with empty shelves.

But you mentioned the Pelicans or these teams. They’re not Beyonce. They’re not the Warriors.


Wouldn’t Amazon be able to buy their way in there, say, “Look, you guys have a lot of unsold inventory. We’re going to bundle it with Prime or ...”

Absolutely. Here, I think, was Amazon’s misstep. They learn over time, so I don’t think that story’s over, but Amazon’s misstep was, of course, they would be great at selling upper-deck tickets for the Sacramento Kings. That brings not a lot of value to Prime members. The Prime members want the front-row tickets. Well, guess what? The concert promoters and the teams don’t need help selling the floor seats.


They don’t want to give Amazon their customer data, and my gut says that at the end of the day, Amazon was not willing to give the teams and the artists the customer data. They wanted to completely control the customer and the experience, and the teams and the artists said, “Well, I’m not giving you my best customers, so we’re at loggerheads” and they didn’t make progress.

So you’ve been in and around music, live biz and ticketing for a long time.


My standard rule of thumb — for digital music, at least — is anyone who was in that business leaves it and never comes back. What about this appeals to you, fundamentally?

I wish that I didn’t love it. I wish I could quit you. Look, I started as a kid, as a touring performer. I made music. I had four, five albums signed to a record label in Nashville, toured around every year playing music. It just runs through me. The energy of the crowd, the energy of that live event, it just crackles through me. It’s why I love this city.

I know that the problems that exist today, that frustrate fans, that frustrate the team owners who I talk to every week, are solvable through technology. I learned that at Twitter. I learned what a small, high-performance product engineering design team can build, and how.

The entire thesis behind Rival was these are solvable problems if we give ourselves runway to do the hard work and build the underlying enterprise platform, the consumer facing piece and solve the problems, leveraging technology as it is today, that we can make the experience better. We’re a product-driven strategy. We make no bones about that, and we’ll either be successful or we’ll dig a big hole in the ground.

The standard rap for the last 10 years for music, of business, has been you guys are either going to make no money selling music traditionally, or you’ll make a little bit of money from streams, or if you’re phenomenally successful, you can make some money from streams. Go make it live.


You’re really going to make your money live.


That always seemed to me to be not very realistic with a lot of acts that can’t tour or shouldn’t be touring, or they have a song. But the tour business keeps increasing both actual dollar value and the number of tickets sold keeps creeping up, right?


Do you think that trend continues?

I do. And the only question from here is if the artist is really making 80 to 90 percent of his money from touring, how long can the other stakeholders in the industry stay out of that? Because Apple’s got a model that sells hardware. Okay. Spotify has a model that we’ll see. They might ...

Spotify is the only music company — only digital music company — that is only a digital music company. Everyone else is selling something else.

Yeah. They’re on a journey to be more than that, though. They’re either going to vertically integrate into content, or they’re going to horizontally expand into other kinds of media and raise prices and go.

But broadly, you think there is an increasing audience of people who want to go see stuff live, and it doesn’t just have to be Fleetwood Mac’s Eternal Farewell Tour or whatever, the handful of generally older acts and a handful of new acts. That well keeps replenishing.

I think it does. Look, in 2008 the rap on Live Nation, which was a small company at that time, was that, “Oh jeez. All the old acts are going to die,” right? The Stones are going to kick it. McCartney ... What’s going to be the next generation? Here we are 10 years later and the business is healthier than ever.

I think that, again, we’re chemically wired to come together. So long as people are creating, people are going to come out and see it. And the good thing about the Spotifys of the world is it does get to that long-tail theory, which is people can identify and cluster around smaller bands, and those bands, then, can go out and travel. My own crappy band, when we go live on Periscope through Twitter, 500 people come in and watch it. What?!

One last question about your business. It’s an enterprise business, right? You have to go to the team, to the stadium, make the deal with them. They’re your customer.

That’s right.

Is there any way to do this the other way? Where you are a consumer brand and people want to come to you and you build up your leverage that way?

I think that’s what StubHub did.


But that’s not how we approach the business. It’s a supply-driven business. We are building the best tools in the world, have built the best tools in the world to manage supply. Now, in the longer run, this is a platform that manages inventory and access and facilitates commerce wherever people gather.

As you think about the venue of the future, it’s not just about a concert in four walls. It’s about an entire retail campus and experience where the concert or the game is really bait to bring people out to these retail experiences that are converting, as Amazon upends the retail world, to being about people congregating and coming together. That, in the big picture, is what Rival’s about.

And, ideally, you take a slice of that and ...

Right, manages access and inventory and commerce wherever people gather. That’s what Rival ultimately means.

Have you ever thought about letting people see unlimited numbers of movies for $10 a month?

I heard that you can make it up in volume.

Yeah. The MoviePass guy was right here where you’re sitting in February.

How’d he fare? How’d he fare under the spotlight?

He was saying you have to burn money to make money.

Well, sometimes that’s true.

They’re still alive!

Sometimes that’s true.

They’re still around.

It requires the second piece, though, ultimately making money.

I mean, by the way, one of the issues that he had — beyond the fact that he was losing money on every transaction — was it was really only going to work if he could get the AMCs and the other handful of big supply owners to work with him.

That’s it.

You have the same issue.

Yeah, and I think you’ve got a very fragmented ... Outside of the big incumbent, you’ve got a very, very fragmented industry of supply owners that have technology platforms that just are not up to speed, and we’ve got the best product in the world. So, we’ll see what happens.

We mentioned Twitter a couple times. You ran commerce there?

Yes, and moved on to babysit the media team and others, but yeah.

So Twitter never really had commerce? Still doesn’t.

Well, I am so wistful about seeing what came out of Code Commerce this week where it is so clear that Instagram has grabbed, and a bunch of my Twitter alums, we’ve all been DMing each other this week because it’s so clear that it is happening, and ...

Yeah, every single company that was up there, that’s where they were spending their money and that’s where they were converting people.

Look, the challenge at Twitter was that you didn’t have the canvas to bring shopping to life. It’s the same ...

Are you talking about the actual format of Twitter, or there just weren’t enough people using Twitter?

Yeah. No, there were enough people, but the actual format of Twitter, there wasn’t ... The long-term challenge at Twitter has been, “How do we get people out of the timeline into another experience?” Moments is the first time that people really started to do that. That took a lot of patience. Some of Twitter’s video initiatives are the second foray into that, but Instagram, it turns out, in part because of what they’ve done with Stories, which has broadened people’s thinking about what Instagram is, Instagram has permission to off-ramp people into other experiences out of that home feed.

It’s also just, “Here’s a beautiful picture or video that’s a great billboard. Are you interested in these shoes?” Then they can lead you somewhere.

That’s right. At the core, what is shopping on Instagram and Twitter? It’s transactional ad units ...

Yeah, and by the way, shopping on Instagram still is barely thing, right? It’s still mostly billboards. There’s still very little actual commerce happening.

But if you listen to their advertisers and you listen to them, there’s a reason why there’s a buzz about, “Well, maybe they’re going to start a separate shopping app.” I don’t think that’s where they’ll ultimately go, but I think ...

It sounds like they’re not, actually.

Right. They have a canvas that can facilitate this, and people today ... All you had to do was look to Asia where WeChat was doing this extraordinarily well. You could tell that through time, that sort of invisible line between social content experience and commerce experiences was going to be erased.

Just to beat this into the ground, Instagram is a feed.


It is almost entirely pictures and now, some video. Twitter is a feed that is very text-based, but certainly can accommodate pictures, can accommodate video. Is this something where, if you went back to it now, there’d be a real opportunity to do it and you could do it? Or is there something baked into Twitter, in the way that most people use Twitter, and it’s text and re-tweets, and it’s Donald Trump saying outrageous shit, that is going to prevent it from actually being a commerce business?

I believe that just as brands spend their money on Twitter, commerce and transactions can happen there. We proved that commerce and transactions ... We sold the first ticket through social media on Twitter. It can happen for the right things, but the use case has to be broadened about what Twitter is, and I’m sure we can talk more about this. The use case of what Twitter is — intentionally by Jack, I think — has been pretty narrow over the past couple of years as they’ve sought to operate on themselves while running in a marathon.

You say, “it’s news.” Then “news” has sort of a broad definition.

That’s right. Instagram has broadened what it is into a larger content platform with a richer set of experiences that, I think, gives Instagram permission to introduce shopping experiences, and it’s working.

Twitter has had multiple leaders. Sometimes people like Jack could come more than once. Which era were you under?

I was under both. Most of my time was with Dick Costolo, but some of my time was with Jack. I got to see them both.

This idea that Twitter is really valuable, has a lot of news, but is also a cesspool and a home for Nazis and other malcontents, that seems like that’s a relatively recent sort of conventional wisdom about Twitter. That wasn’t happening while you were there. There was a lot of abuse, but ...

No, I think we understood the abuse to be ... We didn’t understand the exploitation. At least, it wasn’t part of the ongoing dialogue because at the time there were ... Dick also used to say, “Twitter either is on the cover of magazines and websites as this soaring bird or as a dead bird.” We were in a particularly dead-bird phase, post-IPO.

Yeah. There was a dead bird on New York Magazine, right?

And so the focus there was, “Jeez. Okay, how do we inspire user growth and get moving there?” But ... Enough on Twitter.

We’re all kind of obsessed with Twitter, though. We can’t stop talking about it. It’s like that and Trump.

It matters. Look, your question was, “Do we understand abuse?” Yes, we did. Of course we did. The question is, “Where is that platform going to go from here?” And … I’m waiting for the Snap merger.


It’s time. As somebody who ran a large incumbent, the best thing that you want as a large incumbent is all of your little competitors to be fragmented and having to sell against each other because what they end up doing is selling against each other’s advance proposition, not the big incumbent.

Who’s making the case for that? Is that Jack going to Evan, saying, “This is a good idea for you. Listen.” Or is it the other way around?

I think it’s probably their boards, because I’m not sure either of them ... I mean, it’s both of their babies. They’re not going to sort of voluntarily do that, I expect. That’s not necessarily founder ego so much as it is just founder focused.

Who gets more upside from that merger?

Well, Twitter’s twice the market cap. Right now, I don’t know. We’ll see. I actually think probably Snap does because they’re two years behind where Twitter was on the evolution curve, where investors start to go, “Hmm, this isn’t growing as much as I thought, so there’s not as many eyeballs to put ads in front of.”


Now I just have to measure how many eyeballs are seeing ads, and how many ads can you put against those eyeballs? The pressure invariably comes on user experience. Now, Evan has been super protective of that, and good on him. I just think that in the long run, scale is why Facebook wins, and you have two very interesting, very desirable products that are literally competing with each other, not just for ad dollars, but also for content, and I would like to see those two companies come together.

Snap is the last sort of big social platform to emerge, in the U.S. at least. At one point it was just common wisdom to go ... Obviously, a new one is going to come and replace it. Are we at a point where everyone has what they need and they’ve already sampled everything and everyone has a smartphone and it’s going to be very hard to displace a Twitter or a Snap or a Facebook or an Instagram? Or do you just assume something is coming and we just can’t see it?

My answer to that is that something is coming and we don’t see it. I think people migrated mostly ... The migration away from Facebook is because it’s not cool and it’s not where your people are, and it looks like every demographic and generation have something that’s for them. The only question is whether that gets built natively or sort of organically out of existing players — history says it never does — or whether something new comes along and gets snapped up.

So if your older brother, older sister is on Snap, you’re going to want to use something else at some point?

I think so. Instagram’s done a great job of pivoting and pulling people in, so maybe they can keep that up. We’ll see.

Who in that world, if you had to bet a dollar on one of the platforms today, so that you’d be capturing value going forward, right? What are you most optimistic about?




Even though everyone knows that Instagram is a huge deal, so it’s fully valued.

Yeah. Look. The greatest sort of ... We don’t have 30 for 30 in the tech space, but we should. And the story that needs to be told is ...

This is your friend Bill Simmons’s documentary series.

Yes. The story that needs to be told is the breakdown of the Twitter/Instagram acquisition, which would have changed the web and mobile forever and changed what Twitter is.

Right. Twitter had credit for seeing it, going, “We want to buy that.”

Yup. And it didn’t happen, and it is why Facebook is where they are and it is why Twitter is where it is. And Snap is where it is.

And you’re saying there’s more to that story than just Mark Zuckerberg showing up with a big check?

I think there’s a very deep, rich story around what actually happened over the course of those months and weeks that needs to be told.

Can we talk about that offline if you’re not gonna tell me now?

I wasn’t in the room, so I’m not the one to be interviewed.

Music. We did Amazon, we did Twitter.


Your business. Spotify.


In the music business.

Yes, they are.

They have talked on and off, mostly privately, sometimes publicly, about their desire to do other stuff. They played around with video for a bit. You could see Viacom shows on the phone for a minute. That didn’t work. They’ve gone into podcast, it sort of maybe worked. Do you think they have the ability to branch out?


How are they gonna do that?

Well, I think they need a canvas to show it. I think when they got the Taylor video, for example, it probably wasn’t presented in a way that was super accessible. I just think, not unlike what we just talked about ...

I’m guessing it’s Taylor Swift, was there an exclusive?

Yeah, I think around ... She had sort of an exclusive video that came out on Spotify, and I think people had a hard time finding it. And that is not the end of the world. It’s just like we talked about with Twitter, Twitter didn’t create a canvas until further down the road for sort of a different kind of viewing or user experience. And Spotify can and will get there. If they’re gonna move into other content, then they’re gonna go do that deal and land that anchor that they need. Whether that’s the XM Howard Stern deal or Netflix’s deals or Amazon’s deals. They just need that one thing, and they can build on it.

Do you think it’s a product problem or sort of a company problem? To me, it seems like both, but fundamentally.

I don’t think it’s a problem. I think it’s opportunity.

But they’ve got a thing that works so well that I turn it on, I put it in my pocket, and then I’m really happy.


Because they’re giving me music, and I don’t need to go hang out with them. I don’t need to ...

I know, but Amazon started in books. Think about what Daniel ... Daniel [Ek] went public, he’s got Apple Music nipping at his heels. If I’m Daniel, the best thing I can do as CEO is make sure this first year of going public that we have extreme laser focus as a company because we’ve got a real hungry competitor nipping at us, and we’re being measured now on a quarterly basis. So I’m quite sure the battle plans are there, but would you launch them three months into being public? No, you probably wouldn’t.

So I think there’s a whole lot of opportunity ahead. They have a great user base that’s gonna do it ... they’ve got lots of models that have come before them of how you expand from a narrow vertical into other fields, whether that’s Amazon or Netflix, and it’s coming. Because look, if it doesn’t come then you imagine looking at their per unit economics if they’re not gonna raise prices that they’ve got to go downstream and start competing with labels. And I’m just not sure that they feel like that’s their business.

But to compete, that’s the other thing I wanted to ask you about, was the competing with labels part, right? So they distribute Universal Music to me, I pay them, they pay Universal.


They clearly laid out a plan where they want to go to some artists and say, “You either don’t need to work with a record label, or by the way, you’re not really working with a record label now. Do a deal directly with me, not exclusive but just do a deal directly with me, you will keep almost all of the money instead of getting very little of the money, it’s better for you.”


If they do that enough with enough artists, that’s a real problem for Universal Music and the existing big labels.

Maybe. But so much of streaming is catalogued, and labels control the catalog, and that is just the point of leverage. So I think you’re right that they’re gonna do this cute little dance and they’re gonna see how far they can wade into the water without bumming out their supplier, as it were. But that catalog, oof ...

Right, so that is the tension, and this is what, if you go to Universal they say, “We own all this catalog.” That’s old music, to everyone who’s listening. “If Spotify wants to compete with us, we are gonna walk away.” But the tension is right, is that Spotify has built themselves up enough that Universal and the big labels really need the money that Spotify’s giving them.

Yeah, they need a distribution.

They can’t really walk away.


Spotify can’t really have them turn off.


Right? If a third of the music on Spotify goes away tomorrow, that’s a real problem for Spotify.

Right. Which is why I don’t think the interesting question is whether they’re gonna get into that music content. They’ll do some of it, for sure, they’re gonna find a happy medium with the labels because they need each other.

You think that detente is structurally sort of stuck there?

It has to happen. It has to happen because of their interdependency. Nobody has the trump card there yet. Yeah, so Spotify gets bigger, but Spotify’s not gonna be the only game in town with Apple Music. So the labels are gonna have that leverage.

And if you don’t know this business, though, you look on the outside and go, “This just looks like Netflix,” right? Where they used to have to buy DVDs. Then they started buying content directly from the studios, and the studios said, “Enough of that.” And then they’re making their own. And now they have enough money, enough leverage that they can kind of succeed without Fox or Disney.

The difference is that you don’t watch a movie or a show usually more than once. And they’re carrying the soundtracks of our lives. And that is why you have to have that catalog because I listen to Joni Mitchell’s Blue album or the new Kanye record, like, back to back and over and over again. I’ve only watched, you know, whatever, “The Handmaid’s Tale,” once.


So I think that’s the power of the catalog. And why what’s going to be interesting from an execution standpoint in Spotify’s case is whether they go horizontally out and into other media verticals.

If you had to bet, how do you think they’ll proceed?

If I had to bet, how do I think they’ll proceed? I think the battle plans are there for them to go horizontally for sure. I think Troy Carter’s departure — and Troy is a friend — is an indication that they’re moving into the next phase of their artist relationships, let’s put it that way. And sure, they’re gonna do some direct deals with artists, but that’s gonna be done in a ... there’s gonna be a happy medium that’s reached with the labels there. I think they’re gonna move really quickly into other forms of audio content, and I’m sure that video’s not far behind.

So horizontal meaning we’ve already added podcasts, but they’ll go deeper into podcasts or something like that that can deliver to you on their platform.

Yeah, within the canvas that they have now, but I’m sure somebody’s got some great mock design/UX poster boards on the walls of Spotify’s offices that show what a video experience is gonna look like.

Do you think you’re going to see ... This is something I’ve asked you, but it’s a perennial question, right? There’s always one or two — Chance the Rapper is out there — who have gone and created a successful musical career without a big label or they created a successful musical career with a label and then they go off on their own, like a Radiohead.


But there’s only a couple at any given time. Do you think we’re going to get to a point where enough people finally say, “There’s enough upside for me to do the work and actually do this myself or get a VC to fund me or I no longer need a Universal,” and there’s more than one or two of them doing it.

I’m not sure that those are mutually exclusive things. I think Universal will provide a bunch of services to those artists, but there’s no doubt that the last decade has facilitated this transition from artists to entrepreneurs. Right? The best, the biggest artists in the world — Madonna, Jay-Z, U2, Taylor Swift — those are the best brand managers you know. Behind the scenes, they’re doing that. And that now, artists actually do have the tools to make that migration from artist to sort of artist/entrepreneur.

And yes, we’re gonna continue to see more of them pop up and use their leverage to work with companies from the labels for marketing and support to Spotify and Apple for distribution, to sponsors to, again, live event companies who are gonna help them make their money.

I like calling her Taylor Smith. I’m gonna call her that for now. Taylor Smith’s album deal with Universal is up.


So we’ve talked about this before. And now it’s kind of a meme. Do you think she re-signs with Universal because that’s the easiest thing to do? There’s really no risk there for her? Do you think she does something where she takes on more risk and there’s more upside for her?

When I was at Live Nation in late 2000s, Scott Swift, her dad, called me once every two months and said, “You guys don’t understand, my 13-year-old daughter is a star.”

But you must have got those calls all the time.

“She’s playing ...” Yes. “But she’s playing these amphitheaters, and you guys aren’t servicing the fan right. There’s all kinds of opportunities to make money in a really healthy positive way for the fan. The experience should be better,” on and on and on. And yes, I got those calls all the time, and the first couple of times I was like, “Ugh.” And you hang up. And he kept going ... he knew sure as Sunday that he had not just a star but also one of the smartest business minds of a generation in his family.

And so every step of the way that I have watched her career evolve has been the advancement of artist as entrepreneur. And so ... Here’s what I know. The next step is going to be something new and something different and something groundbreaking that advances the cause of artists overall. I know that that camp thinks that way, and I think they’re gonna ... That doesn’t necessarily mean they’re abandoning the label.


But I think they’re gonna show what can happen in the same way that you’re starting to see athletes start to say, “Hey, we’ve built up these giant brands. How do I build a business around that? How do I take more control and ultimately a larger share of the economics?”

So it sounds like you’ll be surprised if there’s a story tomorrow that says she is re-upped for a four or two or whatever album deal with Universal and has got an X-sized advance and it kind of looks like any other artist deal?

If it looks like any other deal, I’ll be surprised. I wouldn’t be surprised if she continues the relationship with Universal. Great label, can support her in all kinds of ways. But I’m quite sure that she’ll have some interesting control and independence in decision-making and maybe even in the way that she releases her content going forward. It seems to me silly to start doing record deals based on albums now. “You owe me an album. We’re gonna do a five album deal.” In a world in which streaming is blowing up that concept altogether, why would you do an album deal versus a content-focused deal?

Except that for a handful of people, and she’s one of them, people still buy her albums, they buy digital versions of her albums, they buy actual CDs.

Of course, I’d just argue that she could probably make as much as she’s getting paid for one-eighth of the content. And that it’s probably in her business interest to — just like sports leagues divvy up their media rights and sell them — that she can divvy up her content rights and make more money in the aggregate because each individual Taylor Swift song is probably worth more than the sum of the parts.

Because the old model was the song is valuable because it gets you to buy the $15 CD that you didn’t actually want to buy.


And you think now we move to an era where the song actually has value in and of itself?

Yeah. Look, I’m totally fanboying out on Taylor.

Me, too.

But she is one of the most meaningful songwriters, like, she just, she had ...

Just two middle-aged dudes talking about Taylor Swift.

You know it. Taylor Smith. She had a song, a country song of the year, right? My point is she’s going to continue to create content and probably signing an album by album by album deal is a very backwards way of thinking about the kind of artist that she is right now. She now is a brand, and she’s probably looking at the entirety of her content thinking about how do I monetize that in the most effective way going forward? That’s not a traditional record deal.

That said, I’m sure that the very smart people at Universal have a whole bunch of interesting ways that they can help her because they really do provide valuable service to artists. They’re good at what they do.

And it’s important for them to keep her. Right? The headline, it says she walks away and is doing a deal with Andreessen Horowitz or whatever, is very bad for them.

I don’t know if I agree with you on that. Why is that very bad for them?

That’s the way they think about it.

I think they have an enormous ...

That’s what they tell me. They say, “We’ll pay x amount of money to keep this artist even though they don’t sell as many records because it’s important for us to say we work with this artist.”

My gut says that they’re measured by profit and loss like any other business in the long run, and part of the reason that scale works for them is that they can smooth out those ins and outs of artists being on the label or not, and so they can weather the storm. I’m sure they don’t want a headline, but they’d rather have a headline than a call to accountability in the boardroom for why they’re losing money.

I want to get Lucian in here, too. I don’t think he’ll get as peppered up. It’s the guy who runs Universal. Nathan, you’re great. We did your business — which I can’t go buy something from Rival.

No. Next year.

Next year, I’m gonna go to it, I’m gonna buy a ticket at a stadium.


For something.


And you’re gonna get some of that transaction.

And you will feel the joy and delight and inspiration of that experience.

And if I don’t, I call you up?

Yes. You can tweet at me just like how you used to when I was running Ticketmaster and before I went to bed every night, I searched for the company and ...

What’s your Twitter handle?


Okay. You heard it here first. Bug Nathan at Twitter. Thanks for coming on.

Thanks for having me.

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