CNBC Disruptor 50

Spotify just bought an AI startup to help it stay ahead of Apple Music

Key Points
  • Spotify bought a French AI start-up called Niland that has a unique approach to music recommendations.
  • It's in a race with Apple and Pandora to use AI and other methods to give music customers the best music-discovery experience.
Daniel Ek, chief executive officer and co-founder of Spotify AB.
Akio Kon | Bloomberg | Getty Images

Music streaming service Spotify on Wednesday disclosed it has acquired the team and technology behind Niland, a French start-up with a service for delivering music recommendations. The move signals that Spotify wants to incorporate more artificial intelligence (AI) into its system as it fights off competition from alternatives like Apple Music.

Niland is not well-known in the field of AI. But for years its CEO, Damien Tardieu, has done research on ways to extract meaningful information from raw music content in order to form connections with other music.

This approach differs from collaborative filtering, one of the techniques that Spotify and others use. It involves scouring public sources of information like blogs for references to multiple artists, albums or songs and then making recommendations based on that knowledge.

The method is also distinct from Pandora's way of having many musicologists apply many tags to songs so that algorithms can make sense of them.

"Niland has changed the game for how AI technology can optimize music search and recommendation capabilities and shares Spotify's passion for surfacing the right content to the right user at the right time," Spotify said in a short statement on the news.

Not that Spotify is completely unaccustomed to Niland's way of thinking. In 2014 a Spotify intern named Sander Dieleman published research on content-based music recommendation, but Dieleman has since joined Alphabet's DeepMind AI research group.

Spotify has also acquired other companies like MightyTV and Sonalytic that can make content recommendations using machine learning.

Apple has been slowly incorporating AI into its applications. While some playlists in its streaming service, Apple Music, are built with algorithms, Apple has gone out of its way to have stars like Elton John and Pharrell Williams put a personal touch on its Beats1 radio shows. Spotify has some human curators, although its personalized playlists like Discovery Weekly have helped it build a reputation for consistently delivering relevant music.

In December Apple said Apple Music had more than 20 million paying subscribers. Spotify had more than 50 million subscribers as of March.

London-based Spotify is looking to do a direct listing on the New York Stock Exchange, CNBC reported last week.