Last class we talked a bit digital sales, and its impact on the music industry. No surprise that revenue from sales has dropped. Through the MMA club, earlier this year we met with a music agent who described a paradigm shift. Whereas previously music tours were used to promote CDs, today, songs are used to promote tours, therefore the big money-maker has shifted from "cd" sales to concerts, tours, and the like. It was a simple explanation, but one I hadn't thought about before.
Spotify, briefly mentioned in Jeremy's presentation last week, has finally been released in the U.S. (2 weeks ago).
A brief summary: It's a European music listening cloud - based service that is supposed to be such a game-changer that users could replace iTunes, Pandora, and Sirius XM with the new service.
The key difference? It's like iTunes except instead of having only access to your online library, you have access to their ginormous library of 15 MM songs, and they have a 3 tier subscription based fee (free, tier 1 and tier 2) kind of like Netflix.
In this sense, it's a paradigm shifter, like Rhapsody and Pandora such that music listening is no longer about ownership, but about access.
Will it be a success?
People seem to think so. No one yet offers the aggregate services that it does, apparently users are priority over ad revenues, there has been a lot of US pre-launch buzz, and it's already integrated with FB for instant reach. It's projected to reach 50 MM users within the first year!
The challenge? Control. In light of the recent uproar over Netflix's subscription model changes, people should remember that it's all about upfront investment and gaining market share. We have little control over what happens to our music in the future without ownership rights.
Also, like most content streaming services that seem too good to be true, Spotify is already being sued...
1 comment:
I'll be the one to yell the emperor has no clothes and come out and say it- I'm not that impressed with Spotify. The website does have an amazing library of songs, but that's basically all it is- a library for music. While it can tell you what your friends are listening to, unlike Pandora, it doesn't recommend or play songs based on your previous selections. So once the user, like me, listens to the one song they know they like, there's no mechanism to keep them listening to other similar songs. A large part of the success of Netlfix and Amazon is due to their recommendation engines. While outsourcing all of this "to what your friends are listening to" seems like a good idea, for me it doesn't cut it.
Additionally, while I'm used to the ads on Pandora, ads on Spotify seem to be extremely large and intrusive. The service itself is not good enough to make me overlook this. Audiences in England might find these things not to be a problem, but I'm pretty sure that American listeners, once they get over the newness and thrill of Spotify, will.
Post a Comment