Analysis

Napster’s Angel Gambino talks tech, Ek and streaming’s evolution


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Angel Gambino has been in the digital trenches since the late 1990s. Her career has seen her work in early social gaming (for Gameplay·com); test the digital waters for TV (at the BBC and Viacom); and forge content strategies for social networking (Bebo).

In 2019, she’s putting the lessons learned to work in her current role as chief commercial officer at music-streaming firm Napster. Music Ally spoke to Gambino about her career memories, from getting Bill Gates to work with the BBC to what happened when Rupert Murdoch beat Viacom to the acquisition of MySpace – via her warning to Spotify CEO Daniel Ek in the early days of the “difficult and ugly” process of getting his company up and running.

Gambino’s career started at the epicentre of the first dotcom boom in San Francisco in the late 1990s. She remembers “this hope, this energy and this belief” at the time that technology could change society for the better.

“There seemed to be a very collegial atmosphere,” she says. “We really felt like we were all changing the world and that the world was going to be a much better place because of it.”

Gambino co-founded gaming service Gameplay·com, but was already following trends in the digital music industry: including how Napster (in its original filesharing incarnation) became public enemy number one for the music industry.

“That looks like a quagmire,” is how she viewed the music industry and its licensing environment, back then. “That is not going to yield very positive outcomes in the near term.”

Gameplay·com did do some music-related things: commissioning a ‘Celebrity Slugfest’ game inspired by a feud between Liam Gallagher and Robbie Williams, as well as launching a collaboration with Gorillaz to see how gaming could slot in to music marketing campaigns.

BBC risk-taking

In 2001, Gambino joined the UK’s public-service broadcaster the BBC as controller of emerging platforms, at a time when the corporation was trying to accelerate its digital activity beyond its existing limited (and parochial) offering.

“It was pretty much just news headlines and a synopsis of TV programmes,” says Gambino, although she praises the director-general at the time, Greg Dyke, for seeing the potential to do more. “[He] created a culture and an environment that really encouraged innovation and risk-taking – more so than the BBC of prior years.”

The BBC was well aware of the digital ructions being faced by the music industry, and was keen to make a more-constructive transition towards rich media. The backdrop here, though, was a battle for dominance between the RealPlayer and Windows Media Player technologies.

“I got to set up the initial meeting with Bill Gates and the BBC in terms of how we could really push forward on video distributed by new technological capabilities that were internet-enabled,” she says. This led to the launch of the BBC Broadband Player – the precursor to BBC iPlayer – but even within the BBC rights issues were a huge hurdle to clear.

Gambino says the focus then was on putting wholly-owned BBC production online but not touching indie programming commissions. Even then there were rights trapdoors, with an episode of the broadcaster’s biggest soap opera revealing the problems they would have to deal with.

An Eastenders scene in a cafe had a David Gray song playing in the background, and because it lasted for longer than 30 seconds, licensing red flags went up. The BBC would have to comb through episodes and expunge ‘diegetic’ music like this.

“We decided to really work with existing rightsholders of all kinds in order to bring these new services to market. But we also had to deal with a lot of issues in terms of compatibility. You had at least two media players and sometimes more. The user experience wasn’t ideal, but it was taking what seemed like Herculean steps – and that now seem like baby steps – into these new services,” Gambino says now.

The BBC was also trying to get to grips with the new world of mobile content, and how (or whether) it should make its shows accessible on mobile devices, with Dyke nervous about a public-service broadcaster putting content out on “strictly commercial” services.

“I said, ‘If [mobile] is strictly commercial business then this is the death of the BBC,’” says Gambino. She secured a budget of more than £170m to drive forward the broadcaster’s mobile services, as 3G networks started to roll out. “My agenda was to push video and audio streaming on mobile as hard as I possibly could.”

MySpace: what could have been…

From 2005, she was doing that in the commercial-television world, as VP commercial, strategy and digital media at MTV Networks UK & Ireland, part of the Viacom empire. The parent company already had its eyes on making a splash in digital via acquisition of what was then the biggest property in the social-networking world.

According to Gambino, Viacom was just days away from buying MySpace, but was beaten to the punch by Rupert Murdoch’s News Corporation, which paid $580m for the social network in July 2005.

“It [Viacom] was looking at how to use MySpace as a content syndication and content system platform. So being able to do that legally and getting as much content into that highly engaged audience as possible,” she says.

“I think MySpace would have looked and operated much differently under Viacom’s control. I think it would have probably done better. But the reality is a lot of those big companies have a difficult time ingesting startups or smaller tech-based companies.”

Talking of startups, 2005 was the year that YouTube launched, as an independent company – Google would later buy it in October 2006, a few months before Viacom launched a famous billion-dollar copyright-infringement lawsuit against YouTube.

Could a Viacom-owned MySpace, if it had pivoted to video, have been stronger competition for YouTube? “The platform itself was very messy so it wouldn’t have been as scalable as we would have liked,” says Gambino. “I definitely think it would have become more video-rich; but I still think YouTube had a very talented team and the use case that they were enabling was something that was kind of antithetical to Viacom at that stage.”

Bebo and music

In March 2006, Gambino moved to another social network, Bebo, as its global VP of music and content. Having already worked on Viacom’s first social-media syndication deal with Bebo, she understood the challenges.

“I wanted to try to find ways to bypass having to deal directly with how you manage rights and how you monetise rights,” she says. “Our investors said that we really needed to monetise this and I said, ‘Absolutely not! As soon as we try to monetise this, we are dead in the water.’”

Her argument was that rights holders should take 100% of the revenues generated around their content – less about pure altruism, and more about sustainability for the platform. “The cost of us trying to administer, report and pay was going to cripple the business.”

Getting artists on board would be important in raising Bebo’s relevance both to music fans and to the wider music business. One possible deal came unstuck: “I’d been talking to [manager] Guy Oseary about possibly doing all of Madonna’s new releases exclusively on Bebo, but then they wanted a massive equity stake,” she says.

In 2007, Bebo did land a deal with Apple to integrate its iTunes store with Bebo, via links embedded in the social network’s artist profiles that would help fans buy music from Apple’s downloads store.

“They hadn’t done anything with social media at that stage and they were very reluctant,” she says, adding that Apple’s strategic emphasis at the time was still on North America. The company agreed to test the Bebo integration in the UK, as a relatively small market, and from there it rolled out to the US.

Deals with labels proved harder to come by, with Gambino remembering that digital and marketing teams were further down those companies’ hierarchies than they are now.

“Ultimately, A&R and licensing/business affairs teams were the ones to typically hold most of the power outside of the C-suite,” she says. “While they were investing more in digital, they were still incredibly conservative in terms of what we could do or what we could test.”

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Early Spotify advice

In her Bebo days, however, Gambino did encounter one Scandinavian entrepreneur at an early stage in his fledgling digital-music business, and offered him some advice.

“Daniel Ek called me and asked to meet,” she says. “This was when he was just getting started. He said, ‘I want to create the biggest music library that exists.’ I said, ‘There’s Rhapsody and they’ve got tens of millions of songs on there. There are other services out there.’ Having done what I had just done at Bebo, he was just asking for advice in terms of how he could really grow this concept into a business, which obviously became Spotify.”

She continues, “At that time I told him what he could expect from licensing deals and I also told him what he could expect in terms of timeframe… I warned him how difficult it was and how ugly it was, but also said that if you’re passionate about music, then it doesn’t matter how difficult it was; you just had to execute.”

Gambino would go on to work at Sonico (“the Facebook of Latin America”) between 2009 and 2011, as it pivoted to online dating, before working for retail firm Westfield Group for seven months in 2012 as SVP of digital innovations. Since then she has also been a mentor for accelerator network Techstars; a board adviser for music startup Stationhead (which you may remember from our profile when it came out of stealth mode); and founded AI-marketing startup Sensai, among other roles.

In January of this year, Gambino joined Napster – now the brand for both that streaming service and its parent company, the firm formerly known as Rhapsody – as chief commercial officer.

Joining the company at this stage in streaming’s development is “a super interesting challenge on many levels”. Rhapsody pioneered music subscriptions, but in 2019 its numbers still lag far behind Spotify, Apple Music, Amazon Music and other streaming services.

“How do you re-energise an iconic brand with not quite the resources of an Apple or an Amazon?” she says of her remit at Napster. “How do you really do that? How do you reinvent that? How do you really find new ways to grow the overall streaming market?”

To do that, she says, “You’ve got to create a more diversified ecosystem to create more consumer experiences so there isn’t a growing reliance on just a couple of key players. Because then you get into the same situation that you’ve got right now with major record labels who hold so much of the power.”

Reimagining Napster

Napster’s CEO Bill Patrizio has been talking about this strategy publicly too – for example at Midem last year – with business-to-business partnerships where Napster powers streaming services for other brands a key strategy. While Napster’s annual revenues fell by 16.6% to $143.8m in 2018, the company moved from a net loss of $13.1m in 2017 to a net profit of $10.3m in 2018.

“Transforming from a pure D2C play to D2C and B2B2C is a big challenge in terms of process systems, culture, accounting, everything. I want to give all that a good scrub so the company is in a good position to execute well,” she says.

“I want to bring products and services quicker to market. My plan is to improve the D2C offer… My main focus is on new products and services to bring to the market to enable new streaming experiences throughout the entire ecosystem – from startups all the way through to major corporations.”

Napster may be one of the smaller players in the global streaming market, but Gambino thinks it can make an impact on the industry – including providing alternatives to the biggest DSPs.

“There are a lot of people out there that think it’s game over because you’ve got Amazon, you’ve got Apple, you’ve got Spotify and a handful of other more niche DSPs,” she argues. “I don’t think it’s game over. I think there are a few companies that we’re in very advanced negotiations with right now that could significantly alter the entire streaming ecosystem. These partners working on our platform could potentially increase the overall streaming market substantially.”

Gambino sees some concerns from labels about the prospect of a more-diverse streaming market: including the fear of cannibalisation, or saturation, working against aggregate growth.

However, she believes there is still plenty of scope to bring in new consumers by putting a new generation of services that are “super simple and affordable, but also compelling” in front of these potential consumers.

“There are still a lot of frothy bits that we haven’t even captured in terms of new profit. So it’s not just enabling emerging markets; it’s about new products and services where people start to have multiple paid-for streaming experiences.”

Eamonn Forde

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