The clock is ticking for Spotify

http://www.bbc.co.uk/news/business-38930699

101 110 9 years ago

bbc.co.uk

dano• 9 years ago

Spotify's revenue model will not differ significantly from Pandora's. Same cost structure.

iamben2• 9 years ago

I can't be the only one that has almost zero faith the music industry won't ruin Spotify? I'm sure it won't be deliberate, just a combination of stubbornness, greed and living in the past.

Spotify and music is like a library and books. It's fantastic and accessible for listening and discovery. I'm hard pushed to find a friend that didn't use napster or limewire that's moved to Spotify - it's just easy, there and the price is right. And with the exception of a few hold out artists (lost back catalogues, or smaller artists who are unaware of 100% revenue services like distrokid.com) it's pretty complete. It'll be such a shame if it slowly goes the way of the buffalo.

Eridrus• 9 years ago

I think Spotify's saving grace is that it's not owned by a big tech company. I think the music industry would prefer to negotiate with Spotify than with YouTube.

Micoloth• 9 years ago

Isn't it a big tech company itself?

Well at least they want to be one. It's not like they want to be the good guys there. This is what disappoints me a little bit

patrick_haply2• 9 years ago

What I often find is that artists will have have everything on Spotify except their latest album, at least for a few months. Fair enough, they want people to buy their albums; it's just one area where I find Spotify consistently incomplete.

pimeys4• 9 years ago

There are other big areas where it's seriously lacking content:

1) Modern contemporary electronic music, which is usually available vinyl only.

2) Classic albums in their original form. When there's a remaster, Spotify typically only has the remaster, original was either never there or will be removed when remaster is out.

Now, when you start to invest to your sound system even a bit (not talking about 100k wires here), you notice the lack of dynamics in many remasters. The originals just sound better with good soundsystem, not so much with below-average systems.

When I listen to music, I like to have the best possible master from it. And preferably lossless, or that I have the control of the compression parameters and format. I guess Spotify will take the masses, but I'm not the only serious listener who prefers my own files and physical copies.

Streaming is handy, but you can do a lot of things already with big hard disks with your computers, some syncing NAS system (as in Synology), beets[0] and a big enough microSD in your phone.

[0] http://beets.io/

ProblemFactory• 9 years ago

it's just one area where I find Spotify consistently incomplete.

At first (especially some years ago when the catalogue was much smaller) this used to annoy me. But Spotify has made a lot of progress in side-stepping the issue.

The Discover Weekly playlist of recommended music in particular was a great invention. It doesn't matter that much if artist X's latest album is not on Spotify, as long as they can find some other music that satisfies what people are looking for. Some techno with no vocals to code to, something chill in the evenings, like a personally curated radio, not a perfect on-demand player.

Focusing more on recommending music instead of having people search for music means that they get away with missing some artists - and they can take the cost of licensing deals into account when picking the recommended songs.

bogomipz9• 9 years ago

"I can't be the only one that has almost zero faith the music industry won't ruin Spotify?"

But will it be the music industry ruining Spotify if that happens or will it simply be a failure of the business model? You could certainly argue the latter.

nine_k• 9 years ago

Is dealing with the music industry, which cranks licensing costs up every year, a failed business model? Maybe. Spotify is allowed to live but not to thrive.

ivraatiems3• 9 years ago

The music industry doesn't need to ruin Spotify. It's ruining itself.

Its support is abysmal, its apps are bug-riddled and get worse with every update, and it's consistently doing boneheaded "pivot" moves (like mandatory Facebook login a couple years back, "version 1.0" of the desktop app more recently), and so on. It's squandering the good faith and great library it has.

rak00n2• 9 years ago

Still it's arguably better than the alternatives out there. When I cast music to my TV Spotify has a nice interface. When I cast Google Music there is this icon dancing around all over the TV. I think their web interface is superior as well.

zpr• 9 years ago

I agree. Never cared much for the UI, and always found it too buggy to keep using. At my old job, we used it for office tunes, and it was often showing the wrong song that was playing, (so you never knew what you were listening to unless you used something like SoundHound), and going to previous or next tracks was inconsistent, so you might not get back to the last song ever again.

Pardon my ignorance but why is Google Play Music not worth mention here?

gdulli• 9 years ago

I loved the music discovery aspect of Spotify but bad software pushed me away.

Even to me it sounds counterintuitive. Finding new music I love should have been worth more to me than a player with a lot of features. But my instinct was to let foobar2000 pull me back. Something about sophisticated control of playback and playlists turns out to be really important too. But power users are the minority, I'm sure.

hellopat• 9 years ago

I have absolutely no issues with the mobile or desktop versions of the app.

elfchief• 9 years ago

I'm still shocked that the spotify desktop app won't let you output to anything other than the default audio device. There's an open request with thousands of votes on their tracker that has been in "not right now" state for half a decade. I know people with multiple outputs aren't a majority, but c'mon, it's gotta be less work to add than pretty much every other "feature" they've added in that time...

Flow• 9 years ago

And adding playlists to your account without telling you. This was on a free account, but still, it felt like they had no integrity at all.

NTripleOne2• 9 years ago

with the exception of a few hold out artists

fuck you Tool. :(

sydd2• 9 years ago

I think Spotify will die in 5-10 years, but not because of royalty fee woes. We will not go back to the "buy a song for $1" model of the early 2000s.

But it will die because of the moonopolistic and anti-competitive practices of the popular OSes: Apple preinstalls Apple Music, Google Play music, and Microsoft Groove (all 3 clones of Spotify). This agressive, monopolistic behaviour will kill Spotify, just like MS rival browsers with Netscape.

iamben2• 9 years ago

If it goes that way, I'd imagine it'll go like Netflix / Prime / Whoever. One deep pocketed music service will bid a load for 'exclusive rights' to [popular artists] and you'll need to subscribe to more than one service to listen to everything. Except eventually most will just pay for none and revert to whatever way lets you do it for free in one place (youtube / piracy / whatever is about then).

madebysquares• 9 years ago

This is becoming my biggest annoyance with streaming services. The integration with your OS(iOS or android) makes it a much more attractive option when using those devices.

My second biggest annoyance is the increasing trend of "artist exclusives" if you pay a monthly fee and your favorite artist are giving exclusives to the other services I'm less inclined to continue using that service(Spotify) because I don't get the content I want. I don't want to pay for 2 or 3 streaming services. That fracturing of availability is more likely to people going back to pirating music in my opinion.

binarymax• 9 years ago

I completely agree with the OS integration annoyance. I use Spotify but it doesn't connect to Siri and the UX is abysmal on CarPlay.

Nullabillity• 9 years ago

The integration with your OS(iOS or android) makes it a much more attractive option when using those devices.

Let me guess, you use iOS? Play Music and Spotify both integrate roughly equally poorly with Google Now/Assistant. You can say "play some X", and it'll ask you which you want to use the first time.

Unless it misinterprets which you wanted to use, which happens 90% of the time for me. It consistently interpreted "Movits!" as "Movies", even despite having their whole discography favourited in both Play and Spotify.

dexterdog• 9 years ago

Piracy is always better in terms of content. I know they should not be giving everything away for free, but as soon as there are more than two silos (or a world where the combination of any two silos compares to the offering you get with piracy) then piracy will be superior and hopefully force the industry to offer something better.

dontreact3• 9 years ago

I personally hope that piracy is now viewed more as stealing than in earlier days. I think there is a greater understanding that the culture of music as a whole will suffer if we don't put any money into the system. I at least hope that members of the HN community don't view relying mostly on piracy to get music as morally OK.

The problem is that digital music is a type of good that is mispriced by the free market: a public good. There needs to be just enough money to going to the artist to get the album recorded, and once that amount of money is there, there is no incentive for anyone to give more money. Giving more money won't make it easier for more people to get the music, because distributing it digitally is pretty easy/cheap. Kind of like a public park. Because this incentive is only there up to a point, the good gets mispriced.

gambiting• 9 years ago

On the other hand, Spotify has an upper hand at the moment by having a client on absolutely everything. I have a spotify client built into my TV for example.

Apple might pre-install their app on iphones, but they don't support even 10% of the devices Spotify does.

m_fayer• 9 years ago

And creating a multiplatform coherent, attractive, and performant UI on top of an infinite catalog of music, with recommendations, shareable playlists, "radio stations", and on and on - is no small feat. Apple shows no capacity for doing this any time soon. Heck even Spotify is barely holding it together, and this is their entire business.

glitcher• 9 years ago

(all 3 clones of Spotify)

When Spotify first came out, my first thought when I saw the UI was this was an iTunes clone :) Of course it was much more than just that...

dageshi2• 9 years ago

I think youtube is its biggest competition to be honest. Because youtube has a frictionless method of payment (ads), has a paid option if you don't want the ads and is massively useful for "discovery".

I could see youtube killing Spotify and all its competitors.

sydd2• 9 years ago

I don't think so. I use Spotify a lot on the go, and YouTube is not suited for that. (can it even play stuff if your screen is locked?)

Also Google doesn't want to cannibalize their own Play Music sales.

danr4• 9 years ago

One strategy that makes sense to me is going for the Netflix model - become a "record label" themselves, sign some quality artists, help create quality music, win some grammy's and then you rid yourself of those pesky licensing issues. Only problem is that they need to do it before they burn all their cash, which won't be easy.

RamenJunkie_• 9 years ago

The problem with this model, especially in music, is that music is way more reusable than a TV show.

So in the end, if everyone follows this trend, you'll have to subscribe to 3-4 different services at $10/month to get a complete library, and each will be trapped into different apps, so you could end up no being able to play songs together.

Unlike Netflix/Amazon/Hulu, where you could easily subscribe to or drop one month to month to watch different shows.

abe_duarte2• 9 years ago

You are right in music the older catalogue is reused more often.

Netflix can produce a series which you will watch once and seldom see again. New content is king.

In music you mix old with new. If you lose the old content you will greatly limit the listening experience.

Scown• 9 years ago

They do this, albeit on a smaller scale, with the Spotify Sessions stuff (https://en.wikipedia.org/wiki/Spotify_Sessions)

bogomipz9• 9 years ago

"One strategy that makes sense to me is going for the Netflix model - become a "record label" themselves, sign some quality artists, help create quality music, win some grammy's and then you rid yourself of those pesky licensing issues."

I think if you were at the mercy of the traditional record industry for licensing and you went an signed an artist to your label whose contract was up with say Warner Bros Records you could expect some pretty unfavorable terms in licensing content from Warner Brothers in the future. This is just one example but its a slippery slope.

It would certainly be much better for artists to get paid directly from the streaming provider, no doubt about that. But I think if you are out promoting that business model you are going to find it harder to license content from people business model if based on the "old way" of doing things. I think would have to forgo licensing from them almost entirely and carry only original content. This is more or less the model that is/was Tidal. I don't think has worked out too well for them.

In this regard there has been some criticisms against most of the current streaming providers as simply "propping up" the oligarchy of the big 4 record labels.

GrinningFool• 9 years ago

But to GP's point - Netflix put themselves in the same situation in regards to their original content. While it has impacted their selection of titles from the companies they compete with, it wasn't in a catastrophic way.

gourou• 9 years ago

Apple Music is becoming a record label now, they pay artists a few millions so that the album is only available on their platform for a month or so. Universal didn't like it much https://www.theguardian.com/business/2016/aug/23/universal-s...

superplussed2• 9 years ago

Don't the music labels own a big percentage of Spotify? Hasn't that been the whole argument that the labels are unfairly taking money out of the hands of the artists by owning a piece of the distribution? It seems to be that they have a vested interested in working with Spotify to ensure its long term health.

LoSboccacc• 9 years ago

Labels already owns most artist past present and future works, distribution channels doesn't really matter at this point.

superplussed2• 9 years ago

Of course distribution channels matter. If the labels own part of the distribution they don't mind if the distributors give a smaller cut back to the label and artist than another channel. They are able to keep that ownership of their distribution percentage away from the artist, it's the whole reason Spotify was originally so guilt-inducing to people concerned about artist's being treated fairly.

laurentdc• 9 years ago

Somewhat unrelated but.. is the music industry expecting that we go back to buying CDs (or $0.99 tracks) if streaming services die out?

Because I'm pretty sure I won't. I can't see myself going back to physical media or DRM-laden files any soon.

EduardoBautista• 9 years ago

iTunes purchased music has no DRM. Ironically, we have moved to prefer services with DRM.

x43b• 9 years ago

"Somewhat unrelated but.. is the music industry expecting that we go back to buying CDs (or $0.99 tracks) if streaming services die out? Because I'm pretty sure I won't. I can't see myself going back to physical media or DRM-laden files any soon."

iTunes dropped DRM between 2007-2009. I don't think anyone is expecting you to go back to "DRM-laden files" anytime soon.

ZenoArrow• 9 years ago

I don't know what the music industry expects to happen in the future, but I'm fairly certain that the best approach for supporting musicians would be for Bandcamp and/or similar sites to grow in popularity. They've got the right approach IMO; high-quality DRM-free digital files, with the majority of revenues going direct to the artist, as well as curated lists (made by Bandcamp and music fans) for discovering new music.

https://bandcamp.com/

https://en.wikipedia.org/wiki/Bandcamp

bogomipz9• 9 years ago

Its worth noting that Universal, BMG, Warner Bros and EMI are all investors Spotify. It's kind of an odd situation in that respect, the labels don't need Spotify to go public but their other investors do.

The big 4 record labels are the recipients of the $5 billion that the company has paid out in royalties to date. They've surely recouped any initial investment they put in by now. So they kind of have a vested interest at the moment anyway for keeping things just as they are.

delinka2• 9 years ago

With respect to accounting, you don't recoup your investment (where you purchased part of a company) by collecting licensing fees (which you'd have received anyway) from the same company.

bogomipz9• 9 years ago

Sure, I didn't mean in any kind of GAAP sense, just that the investment has already borne fruit is all.

bjelkeman-again• 9 years ago

I wounded if this could be considered a cartel in this context?

abe_duarte2• 9 years ago

This is an interesting idea you put there, labels would like to see a weak Spotify.

bogomipz9• 9 years ago

That wasn't the idea I was trying to put though. I don't think the labels necessarily want to see a weak Spotify but only that the status quo is just fine for them. They would be happy to see the current situation remain in perpetuity I think. Spotify investors however do not.

rurban• 9 years ago

The clock is ticking yes, but of course - click-baiting - the clock is ticking in a good way to the gigantic IPO. All the numbers do look fantastic. They are earning the most, they are paying the most (by far, compared to all other streaming services), and they have 40M premium members already. Every artist is hoping for Spotify to succeed, and all the others being crushed by it.

adzm• 9 years ago

fwiw Spotify just offered to bundle HBO Now for a reasonable price, actually, but when I decided to go for it, I was told it was not available in my area. And it was never seen again. Apparently they have been testing responses to these bundles without actually following through, but it's a good indication of future movements.

tresante• 9 years ago

I'm a long time Spotify fan using it on everything from my Mac to our Shield TV and Echo. Music is a staple of my life and I regularly spend my working day listening to Spotify.

Call me an optimist but I see a huge opportunity to capture additional $'s from less price as sensitive people like me. I'd happily hand over more money to the artists I actually like and listen to regularly but no platform gives me the means to do that (ala twitch cheer). They should start building premium features that connect subscribers more intimately with artists through gigs, merchandise or content. I see a lot of headroom in the price - $14.99/mo for 6 accounts (family plan) IMHO is very cheap.

disantlor2• 9 years ago

yes, 1000% agree. i would pay an extra $10-20 a month, especially if there was some mechanism to select which receives the extra and showing who supports which artists, etc. basically some of the ideas from bandcamp

myfonj• 9 years ago

So … why don't you just support those artists at Bandamp?

In fact that is exactly my current pattern: wen lazy, conveniently discover [1] and browse more famous artists at Spotify and purchase their albums at Bandcamp. Very few IMPoW "good" artists lack BC page.

[1] "Discover" function at Spotify got really nice lately supposedly thanks to the last.fm integration (?). Last.fm used to be my favourite discovery page in the past, and even today I'm not able to ditch it completely.

dontreact3• 9 years ago

Yes, I'm willing to pay more for a streaming music service that gives more money to artists that I listen to more, but I have not seen such a service.

dontreact3• 9 years ago

Yes, I'm willing to pay more for a streaming music service that gives more money to artists that I listen to more, but I have not seen such a service.

mattlondon• 9 years ago

Too expensive for me. When I had the Google equivalent (now cancelled too) I found that I just ended up listening to the music I already know/own anyway, so what is the point of paying to listen to the music I have as MP3s?

I've found YouTube has been a great replacement for listening to any music I don't already own.

puddintane2• 9 years ago

I recently switched to SoundCloud free and the ads are really not that bad (only con for example if your playing off your phone and it hits a video ad you can't lock your device till the SD finishes). However if the device screen is locked you'll only get audio ads (short and sweet at that).

Like YouTube though it will suffer from take down notices on some stuff you book mark, as well as mainstream stuff you can only listen to the first 30 seconds (but I've never been big into what's radio popular).

rorykoehler• 9 years ago

I use both. Soundcloud audio quality is way lower. Not suitable for all day listening without fatigue.

lorenzhs• 9 years ago

Did you try the discovery features? Many people find them to be among the most valuable features of Spotify. I quite like the discover weekly playlist that is auto-generated every Monday, and the daily mixes are quite good as well. Or see in which playlists other listeners discovered an artist and see if there's anything else you like in there. There's also a "generate more like this" option in playlists' context menu.

petval• 9 years ago

You know what? Company that silently ignores hundreds of its Android users requests to implement such a basic functionality like playlist reordering for more than 3 years maybe deserves to die. It's a book exanple of business and customer service fail and tremendous arrogance.

Hard to belive but still true: https://community.spotify.com/t5/Live-Ideas/Rearrange-tracks...

467568985476• 9 years ago

I think it's more likely that Android represents a negligible share of their users than some kind of intentional malice.

ivraatiems3• 9 years ago

It's not hard to believe. It's one of many, many things Spotify has done to indicate how little they care about their users. Here are a few more, arranged somewhat chronologically:

* Forcing mandatory Facebook logins, only to walk them back

* Releasing a "version 1.0" of their desktop app with no CTRL-F support and dozens of missing features

* Breaking people's hardware with bugs that made hundreds of unnecessary reads and writes to drives, denying the issue existed until pressed to fix it

* Silently removing basic features from their apps, or pushing UI updates that make said features harder to use

yazbo_mcclure• 9 years ago

Radio is awesome in my town. Radio feels better more connected than any stream service long live radio

dest• 9 years ago

Are there lots of ads on your favorite radios or are they OK?

nik736• 9 years ago

I am still missing Rdio and hope Pandora Premium gets the UI/UX and the music suggestion part right. It's sad that Spotify is still years behind a product that died in late '15.

tmalsburg22• 9 years ago

Spotify are aggressively exploiting artists and yet they are not making money. Not sustainable, and it's not really suprising. If someone offers you all the music of the world for 10 bucks that is just too good to be true. I closed my Spotify account because I didn't want to be complicit in the exploitation of artists. I'm now using Qobuz ($20/month) and hope that they are paying more fairly (couldn't find any numbers, though). $20 per month still doesn't feel right to me, but unfortunately there are no better options.

gumby• 9 years ago

Spotify are aggressively exploiting artists...

What do you mean by that?

And separately, is it better or worse or the same as how the music industry has exploited artists over the years?

tmalsburg22• 9 years ago

I'm not defending the music industry. They deserve to die. But, yes, Spotify is worse. At least that's what all musicians I talk to are telling me unison.

ng12• 9 years ago

Spotify are aggressively exploiting artists

Many of my favorite bands love Spotiy, going as far as making it the platform they pre-release music on and back-catalog out of print albums. Why? It's an engine for discovery unlike anything else. A lot of people were pirating music not because they were cheap but because it gets too expensive to drop $20 to figure out if you like an album. Spotify also rewards the right behavior -- if you make the kind of album I want to listen to over and over you get a bigger return. It also automatically notifies your fans of new releases and nearby concerts which puts more money in your pocket. It's a different model than the record labels but it's far from "aggressive exploitation".

leoc• 9 years ago

The thing that really vexes me about Spotify is how many listens they're giving away to YouTube by making it impossible to search for and listen to a song without losing your place in your current album or playlist: the interface has no concept of tabs or easily-accessible bookmarks. There's a back button, but it doesn't remember what time or even what track you were on, and even with that memory it would be a second-best alternative anyway. The upshot is that even if you're listening to Spotify at the time you decide to search for a particular track, the instinct is to pause Spotify, go to the web browser, open a new tab and search YouTube! YouTube has other things that Spotify lacks like video, song descriptions and (for better and worse) comments, but I think it's largely just the inconvenience of losing your place that drives you away from Spotify in cases like this. For a company which is scrambling to survive, and which I assume would be better off with more plays and more and happier subscribers, it looks like reckless or hapless squandering.

NTripleOne2• 9 years ago

You need to start using the queue.

In the middle of an album but want to hear another track without stopping the album? right click -> add to up next (or tap-hold, add to up next, if you are that way inclined). It will then play after your current track and before the next track in your current playlist/album.

The clock is ticking for Spotify

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