It seems that this is the week for getting invitations. Google Plus. Turntable. My nephews birthday party. Two for Tuesday pizza at the local restaurant.  

 

And a few minutes ago...Spotify. Finally. Click here.

 

If you live here in the US, you might not know what I'm talking about, this Spotify thing. Here it is in a nutshell:

 

Spotify is a proprietary peer-to-peer music streaming service and application software from a Swedish based company. It allows instant listening to specific tracks or albums, with virtually no buffering delay. You will upload and have access not only to your own iTunes library or mp3 files, but almost an unlimited library of music. You can make playlists, share them with friends, let folks know what you're listening to via Facebook or Twitter. You can go for a free account, or two premium options that eliminates ads and allows you to synch up your portable device/phone, and take it with you.

 

In the less than an hour or so that I received my invite and started to play around with it, I'm simply blown away. This seems to be exactly what folks in the UK and other countries have been enjoying and championing for a few years now. We are late to the game thanks to the pinheads who run the record business these days, but today is the first day of your life. So enjoy it. 

 

Here's a few quotes I thought I'd share:

 

Time Magazine: "The celestial jukebox is no pipe dream; it's here now"

 

Billboard Magazine:"Spotify makes music fun again just like the iPod did nearly ten years ago."

 

Wired Magazine: "Those who have tried Spotify know its like a magical version of iTunes in which you've already bought every song in the world."

 

Let me just say for the record, I don't work for Spotify. I'm just a music fan. I'm going back to building some playlists and listening to some new music. I'll leave you with their promo video. 

 

 

Friday Afternoon: I just finished the morning on Spotify, and about an hour on TurntableFM. The latter was fun; Kyla was there and we shared a bunch of songs at the No Depression room. But Spotify....it was nirvana. I just received Bob Lefsetz' email about his thoughts on Spotify. He's just another unemployed ex-muisc industry geek with a great Rolodex (look that one up youngsters). But I'm goin' to cut and paste it here for the heck of it. The man makes a few good points.

 

THE DATA

SoundScan revolutionized the music business. It not only said what was sold, but where it was sold, allowing targeted marketing campaigns and tours. Spotify is SoundScan on steroids:

"Without Spotify, labels know only when an album is sold. If a CD is ripped for a friend or borrowed for a party, they know nothing. Spotify gives them a record, by location, age and gender, of every single time a track is played. Jay-Z used to think he was big in London, based on U.K. album sales; it turns out he's big in Manchester."

http://bloom.bg/oCXJci

I've lambasted the old acts for selling their new projects in the old way, using ancient broadcast media to reach so many who just don't care. The key to selling in the future is knowing who your customers are. Streams will tell you what market to visit, where to grow from, what songs are popular...

Furthermore, the arc of a project will change. Now it's all about front-loading, getting a big first week so the physical retailers that are left will reorder and media will cover your sensation. With Spotify the lifespan of music will be much longer. Furthermore, you can visualize what traction you're getting and build from there:

"On Spotify, whenever an artist appears on a talk show or releases a single, plays of her entire catalog increase on Spotify, then plateau at a higher level. Albums follow a bell curve. Spotify is a ratchet, a step function. 'LOP,' Sundin says, 'life of product, it used to be six months. Now it's 10 years.'

COMPARING SPOTIFY TO PANDORA

Is like comparing your music collection to radio.

You listened to radio for discovery. Once upon a time, radio was a club, you felt a member, now it's just jive deejays and the hits of the day. You can get this information online, what the station is playing, and check it out yourself, instantly, on Spotify.

In other words, believing Pandora has got a chance against Spotify is believing that everybody's going to sit at home and watch television in real time without a remote as opposed to employing their DVR, on demand, Hulu and other online options.

The future is about what I want now. And if anything, the window is only going to shrink. This is what the movie business doesn't understand. We're going to day and date home release, it's just a matter of when, protecting windows is a waste of time, unless you're employing a sunset philosophy, timing their extinction with the adoption of new viewing modalities.

As for music discovery, it's primarily done through friends. This is where Spotify's Facebook integration and playlist sharing comes in. We trust our friends and just about nobody else. Pandora is not our friend, it's a for profit company making us expend effort to winnow a playlist that requires a ton of time to create. Huh?


SPOTIFY VERSUS RHAPSODY, MOG, RDIO, ETC.

It's the interface.

Spotify does not operate in the browser, it's its own special app. Therefore, functionality is much higher.

Also, Spotify looks like iTunes, you already know how to use it.

And Spotify mimics ownership. By employing P2P technology (legal, which is why those who wanted to kill it were so wrong), you can hear your track instantly. If you came to my house and I told you I owned all the tracks in Spotify, you'd believe me, functionality is just that high, there's instant startup and the ability to fast forward and reverse.


SPOTIFY ADOPTION

Forget the surveys speaking of name recognition. If everybody knew about Rebecca Black in a week, why can't they know about Spotify? The straight media is last on this, don't believe it when it speaks to various analysts and gets a variety of opinions. Speak to a user, who will say Spotify is AWESOME! And it's these users who are the marketing team for Spotify, they're the ones who are going to grow the user base. This is how the modern world works. Focus on the product, not the marketing, fans will do all your marketing for you. Worked for Google, Facebook, Turntable.fm...


TRACK AVAILABILITY

Of course there are holes. But just like the Beatles came to iTunes, eventually everybody will be on Spotify. If you're complaining about the holes, you're still listening to CDs. Or you're a thief and weren't planning on paying anyway and we're ignoring you.


MOBILE

2,000+ tracks live on the hand-held, playlists synch from the desktop application. So not only do you not need a cell signal, you incur no streaming costs. Of course you can stream what you don't have in a playlist too.


PAYMENTS

Spotify pays more than Rhapsody. But I wish it were a percentage of Spotify's revenue as opposed to payment per stream. And eventually the majors will try to scam the streams. But to complain about revenue is to live in the past. Streaming is here, argue for more from Spotify as opposed to the death of the service.


USER BENEFITS

This is what we've been waiting for, everything at your fingertips at one low price. This is user nirvana.


PIRACY

It doesn't pay to steal if you've got what you want at your fingertips. And stealing on a mobile is an insane experience. Why not pay a low price to save time? In other words, do you want to use a dial phone or a touch tone?


ACT BENEFITS

The barrier to entry to hearing your music just disappeared. You no longer have to focus on distribution, just music and marketing. And the best marketing is good music.


INDUSTRY BENEFITS

More people listening to more music results in more people wanting to go to the show and buy merch. MTV created a world of few winners and endless losers. The universe is much bigger now, and that's to everyone's advantage except for the old fat cats overpaying to get themselves heard and keep you out.


APPLE

It makes very little on music but if it doesn't have a streaming application in the wings, it's stupid. Ownership will survive, just like vinyl records, but it will become an ever-decreasing piece of the pie.


COMPETITORS

Usually only one site wins online. It's not like the brick and mortar world where one store is far away from another and prices vary. The best wins. There's one iTunes, one Amazon, despite billions spent by Bing, Google still dominates. Facebook killed MySpace and there will be Spotify and a bunch of also-rans. Then again, just like Google+ is scaring the bejesus out of Facebook, Spotify is not forever. We live in an evolving world, and if you don't keep improving, you're history.


HOW THIS HAPPENED

1. Spotify started small in a country deemed almost irrelevant to the music business, Sweden, riddled with piracy. iTunes did the same thing, starting in the small at the time Mac universe.

2. Users testified.

3. Public opinion was against the naysayers. It was hard for Warner, the last holdout, to stay out with the deafening cry from within the community.

4. Facebook. Once Spotify aligned with the social network giant it gained a sense of inevitability. The music business is afraid of Facebook, they see it as an indomitable juggernaut.


WINNING

We always knew someone was going to win in the music delivery sphere online, it was just a matter of who and when. A lot of money was wasted on the way, but there was always going to be an inevitable victor. Too bad the music industry didn't push the future instead of holding back, maybe all those people wouldn't have had to lose their jobs.


PAYING

Forget that Spotify is free on the desktop. The iPad has put a dent in PC sales, it killed the netbook, it's all about wireless and hand-held. There's no free option for mobile. To think people won't pay is to believe they're going to stop texting.


DRUGS

That's what music is, a drug. That's what Spotify is. And the way you get people hooked is to give them a taste for free.


SHORT TERM

Ignore the numbers, which will be significant. Online it's all about tipping points. No one has a computer, then everybody gets one to play on AOL. Then people suddenly start burning CDs. Then they sign up for broadband to steal music and watch YouTube clips. The streaming train has left the station. One day, everybody will do it. It's not tomorrow, but it's not as far away as you think, and it is inevitable. Ownership will survive, but rental will be king. And the music industry should take a tip from the Republicans, it's all about the moniker. Don't call it rental, call it ACCESS!


FUTURE OPPORTUNITIES

He who tells us what to listen to will make a ton of money. And it won't be done by computer, only people can choose what's worth listening to.


MONEY

Spotify is geared to make a ton. I'm not gonna get a cent.


CONCLUSION

It's over. The majors lost. The users won. Play to the users. Build a fanbase. There's a ton of money to be made. It's easier than ever to reach everybody but harder than ever to get people to pay attention and stay focused on you. That's your challenge. Daniel Ek is an engineer, a businessman. You're an artist. It all depends on you.


CONCLUSION 2

Don't be a cheapskate. If you can't score an invite, sign up for five bucks. It's all about early adoption, being able to speak intelligently about what's happening now. You can always cancel after a month. Or you can pay for Spotify on your iPhone and be the envy of your friends...for a month or two.


 

 

Views: 408

Tags: Bob Lefsetz, Easy Ed, Spotify

Comment by Adam Sheets on July 14, 2011 at 2:26pm

Sadly, here's another quote:

 

"The British Academy of Songwriters, Composers and Authors has complained that Spotify's payments to songwriters are "tiny", and that the way they are calculated is distressingly opaque. The most eyecatching detail to emerge recently is the claim that, in a five-month period shortly after the service launched, Spotify users enjoyed more than 1m plays of Lady Gaga's song Poker Face – which earned Her Gaganess the sum of $167."

 

http://www.guardian.co.uk/music/2010/apr/18/sam-leith-downloading-m...

 

Now I'm sure this is a great concept (haven't gotten the invite yet myself), but I can't see myself being a serious user with it's current business setup.

Comment by Easy Ed on July 14, 2011 at 2:36pm
Yes...I haven't delved into the payment aspect yet. I know when I was running a record label a few years ago and transitioned to digital, our monthly statements would read like this:  iTunes: $10, 650 and "all others" which included streaming, $5.35. I'm not sure you can point the finger at Spotify or any of the other services at this payment structure, as it has been the music industry that put their fingers in their ears and hands over their eyes while technology has taken us into a new direction. Let's face it, with all their lawsuits against grandmothers and a focus on the big brass rings like American Idol and Gaga-ville, they have co-opted all others and sentenced them to a life working for peanuts. Not saying this is fair, because it's anything but. This is how big business works though...those in charge are, to quote Zappa, only in it for the money. Their salaries, benefits, ego and what have you. Read an interesting post last week somewhere that talks about a pricing model built on abundance. Meaning, we don't pay for songs, we pay for access to songs. Just like you pay a fee for your utilities and your internet service and your Netflix (timely mention there), so goes music. In any event Adam, I think I just saw the future of rock and roll.
Comment by Adam Sheets on July 15, 2011 at 5:20am
I can understand what you're saying about paying for access to songs and I agree that there will probably be a big market for this. I'm not sure whether or not it's the future or just one aspect of it, but I'll definitely check it out the first chance I get and see what I'll the fuss is about.
Comment by Kim Ruehl on July 15, 2011 at 5:55am

I've been using Spotify for a year or so - they granted me a press pass to get acquainted with it until it released in the US. I guess the goal was that I and folks like me would tell our friends off the record how amazing Spotify is (which I have, because it is) and then, by the time it finally released in the US, there would be some buzz. 

 

I love it. Honestly, that quote about it being a magical version of iTunes is pretty right on, except I think it gives iTunes too much credit. The US release allows me to get Spotify on  my phone (which I haven't been able to do til now), and that's the most exciting part. 

 

The best thing about it is its options for sharing music. I can click and drag a song into an IM conversation. My friend can listen to it and then decide to buy it. I can text someone a song on my phone from Spotify. Holy crap! 

 

And that's just the bells and whistles. The catalog is incredible (though they don't have 'The Harrow & the Harvest,' and are of course lacking on Beatles tunes, etc.). And there's the matter of how artists are paid, but I'm afraid that problem is not only an issue with Spotify and other streaming services. (Not like Rhapsody or Pandora deliver the bank either. I have no idea how Turntable pays for its music...) That issue of artists getting paid their due is systemic, and I don't think things like Spotify should be punished for it. That's kind of like smacking the leaves for what's going on in the roots. 

Comment by Easy Ed on July 15, 2011 at 10:06am
@KIm: Proof that you are certifiably living in the South again: "That's kind of like smacking the leaves for what's going on in the roots."
Comment by Will James on July 16, 2011 at 9:30am
Sounds cool. Who wouldn't want to try it. Guess my daughter will have to figure out some other way to re-pay her student loans from Berklee... Like it's not hard enough on these kids. We should have known better (we did) before letting her go there (although frankly a liberal arts educations is useless, at least this is a trade). Say what you want about the "record companies" of old, at least the artist got something, and they somewhat had what's missing from the business (and the web):  an editor to make an educated decision on who got through instead of Everyman. Sorry for smacking the leaves while somewhat blaming the Roots. From an old-time unemployed (it's in federal courts now) career editor and web guy with a very talented Berklee grad daughter.
Comment by Easy Ed on July 16, 2011 at 10:00am
It's a quiet Saturday morning here Will, and I've been sitting on the computer surfing to probably over fifty music blogs so far. Just letting the links take me wherever. I started at one of the ND regular bloggers' site(Common Folk Music) and off I went. For the past two hours all I've been doing is listening to music that's either streaming, been posted (not illegally mind you) or put up on You Tube. Or given away for free at Noisetrade. Frankly, it blows me away that there is so much music to be heard. With over 120,000 full length releases every year through the regular US distribution channels, and adding in all this other stuff just sitting out here for your listening pleasure, I don't know how any musician can make money out of it outside of a paying gig I suppose. As someone who toiled in the music business for many years, I can tell you that most musicians didn't actually make money in the sense you mean it. What they got was a loan (called an advance) that was never expected to be repaid. You could live well on an advance. At least for a few years. They also got expenses paid when they went out on tour. Which was applied against the advance. It was just a giant Ponzi scheme, with only a small percentage being able to have enough legitimate financial success to suck the others into it. Not really an answer or solution or statement I guess. Just an observation. As far as editors are concerned, they're toast. Along with manufacturing, jobs, home ownership and all that other post-WW2 suburban American Dream stuff we bought into.
Comment by Will James on July 16, 2011 at 10:12am
Wow, downer Ed, I was depressed enough with my wife's severed Achilles tendon. I am not unaware of the education you just provided; in my opinion the best book on the subject: Al Kooper's (former Berklee prof) "Backstage Passes & Backstabbing Bastards" (best book on the business, although it's also ironically about someone, just a good guitar player, who, because he was smart AND motivated, managed to more than make a career out of the business and performance end himself). But don't mind me (why start now), back to the latest and greatest.
Comment by David Haskin on July 16, 2011 at 11:58am

Jeez -- for years, I've been touting the advantages of "renting" music as opposed to "owning" (in quotes because even if you buy a CD, you still don't own the music -- only certain rights related to usage.)  I haven't yet gotten my invitation from Spotify but, over the years, I've subscribed to Rhapsody, the legal Napster and, now, Mog.  Perhaps Spotify's user experience will be better, but my sense in reading early reviews is that Spotify is the same concept as the others.  So why all the brou-ha-ha?  Good PR, I guess.  I dunno, but I'm glad that more people will now have exposure to this idea.

 

As for payments to artists, I believe that is a problem that hasn't yet occurred. I say that because, as I'm sure streaming music service newbies will soon discover, these services are best used for discovery purposes, not as a replacement for purchasing music.  I use Mog at my desk all the time if I hear of an artist I want to try out, but it's still an entirely unsatisfactory experience to use these services on-the-go, which is a more common setting for listening to music than sitting at a desk.  That's because there simply isn't enough cellular bandwidth to make the experience satisfactory, at least until 4G becomes widely deployed and users have devices that support 4G. So for the next year or two until that happens, using Spotify (or Mog or Rhapsody or Napster) while mobile is typically an unpleasant experience.  

 

I can't tell you how many albums I've bought over the years after listening to the track first on a streaming subscription service.  As a result, I think artists should, at least for now, be grateful for these services as powerful music discovery engines.  As such, they may not get much payment if I listen once or twice, but if I like what I hear, I most certainly will by the album.

 

That will change, of course, as more bandwidth becomes more available.  And perhaps Spotify's user experience is so superior that it will lead to fewer album sales.  But, for now, these services can be of great help to artists.  And something else will need to change: the recording industry's expectations.  This in many ways mirrors what has happened in the newspaper industry: Changes in technology that can't be rolled back obliterated old business models and new, profitable business models have yet to fully emerge.  I don't know what the answer is here, but it's probably naive for the industry -- and, alas, artists -- to expect things to be the same as they were.

Comment by Thomas Hine on July 16, 2011 at 1:01pm
Spotify's been very good for me as an artist.

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Created by No Depression Feb 17, 2009 at 9:06pm. Last updated by No Depression Sep 24, 2012.