Little In Tune With Spotify
Spotify has maintained a growth story since going public in April 2018 by shifting free users into paying customers and by adding other bits to the business. In the nine months to September 2022, turnover was ahead 23% at €8,560m, even if all that revenue threw up an operating loss of €430m. The latest balance sheet shows paid-in capital of €4.8bn, cash of €2.9bn, total assets of €7.6bn, and liabilities of €5.4bn, for a net worth of €2.2bn. Market cap is €16bn, so as far as investors are concerned, founder Daniel Ek can continue his splurge.
In October 2022, Spotify reached into Celtic tech know-how with the acquisition of Kinzen, established by Mark Little (54) and Áine Kerr five years previously. Little, a former RTÉ broadcaster, scored a home run before with Storyful, which was acquired by News Corporation in 2013 for €18m. The details aren’t out yet on the Spotify consideration but it’s likely to have been a large number too.
Kinzen started out as a subscription service to filter reliable news sources for ordinary punters and then pivoted to B2B. The company commenced working with Spotify in 2000 and narrowed its focus to monitoring audio for undesirable content. As the company explains: “Every day, Kinzen experts track evolving threats of hate and harm across multiple platforms using various monitoring tools, including Kinzen’s proprietary dashboard. These are added into a Database of Harms.
“Thousands of validated and searchable data points, including hashtags, keywords, phrases, slogans, slurs and claims, are matched across local markets and languages to highlight misinformation threats and hate speech. These help train machine learning models. Our technology generates automatic classifications of harmful content, allowing our clients to prioritise and take action on highrisk
harmful content before it results in real-life harm.”
Ironically for a venture headed by former journalists, Kinzen acts in a censorship role, though the contemporary phrase is ‘content moderation’. This filtering matters to audio platforms, and other content providers too, as advertisers are obsessed with ‘brand safety’, at least in the digital arenas where they can throw their weight around.
In a 2021 blog post, Mark Little stated that disinformation is not just another online harm. “It is a biological attack on an ecosystem weakened by emotional overload,” he declared. “Every harmful and hateful narrative on the internet shares the same DNA; a genetic code designed to exploit vulnerabilities in human conversation without detection.
“The next generation of solutions to disinformation revolves around the phrase ‘Human In The Loop’. HITL systems are a hybrid of human skill and machine scale. They harness artificial intelligence to process very large amounts of data while relying on human intelligence to perform very complex tasks. HITL is a fundamental shift in the focus of innovation from machines replacing humans, to exponentially increasing the power and reach of human judgment. HITL also lays the groundwork for increased transparency and accountability in content moderation, and potentially more effective regulation of AI.”
This suits Spotify, which introduced a Safety Advisory Council in June 2022. Explaining the Kinzen deal, Spotify commented: “Kinzen’s unique technology is particularly suited for podcasting and audio formats, making its value to Spotify clear and unmatched. Given the complexity of analysing audio content in hundreds of languages and dialects, Kinzen will help Spotify better understand the abuse landscape and identify emerging threats on the platform. The combination of tools and expert insights is Kinzen’s unique strength that we see as essential to identifying emerging abuse trends in markets and moderating potentially dangerous content at scale.”
As with Storyful, Little passed around the investor hat several times as the loss-making start-up carved out its valuable niche. Equity invested in October 2021 was €3.5m, and filings indicate that Little held on to 33.5% of the equity while Kerr owned 22.9%.
‘Disinformation is a biological attack on an ecosystem weakened by emotional overload’