Crunch Time for Spotify

http://jacquesmattheij.com/crunch+time+for+spotify

by relix • 15 years ago

23 35 15 years ago

I agree with Jacques's analysis. What will be interesting to watch is the uptake rate of the paid version in countries where they have extremely widespread usage (like here in Norway.)

I'm already a paid subscriber, and gladly pay 100NOK/month for the premium service. I'd be disappointed (but not completely surprised) to find that people don't think the service is worth that.

swombat5• 15 years ago

I don't find that a service for simply listening to the radio is worth paying for on a monthly basis. If I can't download it and listen to it whenever I want and wherever I want, it's not mine, and it's worth paying for.

I would happily pay a significant amount of money every month (say about £30-40) for an all-you-can-eat buffet of DRM-free downloads covering all the released music (since the beginning of recorded music) by all the major labels.

This would translate into some £480 of income from me for the recording industry, versus £0 at the moment. I'm pretty sure I'm not alone. I wonder how much money they're leaving on the table by offering inadequate products like Spotify.

arctangent• 15 years ago

I'm a paid subscriber and I'd like to correct what I think may be a faulty assumption (which may be due to poor wording in the original article).

Spotify does more than let you listen to the radio - they have a large catalogue of music that you can search through and play at whim.

You can also save music to your mobile device and listen to it later. If you want, you can go to a friend's house, login to Spotify on your account and then listen to your music there.

http://www.spotify.com/uk/about/features/

All this for just £10 a month! For all intents and purposes, Spotify is "all-you-can-eat" for the needs of most people. I wish they'd improve the range of tracks they have but that's somewhat beyond their control - this will always happen until the market tips enough to get certain old-world businesses on board.

Before this comment runs the risk of sounding like a hagiography, I should point out that the features for creating and sharing playlists are fairly limited and the client software is fairly basic (at least on OSX, which is the only version I've used).

Edit: Beaten to the punch by ladon86 by a couple of minutes. I should learn to type faster, or perhaps just use fewer words :-)

urbanjunkie3• 15 years ago

So, for £40 you want the ability to download every piece of music ever released and own it for ever? Once you've spent your first month downloading everything you've ever wanted, what's the incentive to re-up your subscription the following month? Are you really going to pay that subsequent fee to download a few new releases?

Not sure your model works.

EwanToo6• 15 years ago

Why would you pay for the 2nd month?

Spotify isn't a radio service, it does have a (fairly iffy) recommendation service, but it's a fundamentally a "I want to hear this track or album by this artist, there it is, click play" service.

Confusion• 15 years ago

I happily pay Spotify €10 a month for an all-I-can-eat buffet of DRM'ed downloads, covering much of all the released music of many of the major labels. I'm certain I'm not alone.

I don't care that I'm left with nothing when they fail or change their policy so it doesn't suit me and I decide to take my money elsewhere. They offer me a convenient service. I'm not even interested in buying CD's.

w1ntermute• 15 years ago

I don't know about anybody else, but this is exactly why I'm leery about any of these "cloud services". With my local music collection, I know that future developments are of no concern.

Another area in which this is very important is gaming - Steam has a near-monopoly on online sales of PC games, and if they were to go under, a lot of people would get screwed over. I rarely (if ever) play video games, but I've bought all the Humble Indie Bundles just to support an option that doesn't put customers at the mercy of the retailer's servers operating properly.

justincormack• 15 years ago

I see Spotify more like a radio service, albeit one I do pay for. If the radio station shuts down I find another way of listening to music. I still buy some music in addition. I dont feel I own the music in Spotify so if it went away I havent lost it... I could never afford to own that much music.

JonnieCache4• 15 years ago

Although this will likely cause outrage from the entitlement brigade, I think it's pretty reasonable.

If you feel the need to listen to a track more than five times a month then that's surely an indication that it's worth chucking the artist/label ~£1 to get the MP3/FLAC. Once you you've done that you can move on to finding another new track to obsess over on spotify, with no opportunity cost.

In short, this emphasises spotify's suitability as a discovery service for new music, rather than as a way to avoid having to curate your own music collection. This was always it's strength anyway.

The problem is that spotify is probably banking on the latter use case to support their business.

chris_j• 15 years ago

You raise a good point about the distinction between a music discovery service and a way to avoid having to curate your own music collection. My personal use of music streaming services (we7 in my case) is built around the latter. If I have a party at my house, it's pretty useful to plug the laptop into the stereo and let people choose music from we7 rather than me having to specifically go out and buy any song that gets played.

It sounds like Spotify are probably shooting themselves in the foot by destroying a good part of their value for a lot of their customers.

semanticist• 15 years ago

If their users aren't paying them money, then they're not Spotify's customers, they're the product Spotify is selling to advertisers.

Spotify's audio adverts can be really intrusive - it's definitely not something you'd want to cut in during a party.

asb• 15 years ago

As I understand the wording on the blog post, it's 5 plays ever and not 5 plays per month.

larrik2• 15 years ago

Over the years, I have had a ton of people approach me about doing various startup ideas. For some reason, 90% that are pitched related to music.

I immediately say no to any startup involving music. I know pg has the same policy now, but I've been saying it for about 10 years now, and my reasoning is a bit starker than pg's.

Basically, there are only a handful companies making good money off of music, and you aren't going to be one of them. (the labels and Apple, basically)

* This is slightly less true when you are including instrument makers, but musicians are an AWFUL market to try to sell to, since the only ones who actually make money tend to get everything free anyway through sponsorship deals. IE. musicians can't spend money, and if they can they won't anyway.

P.S. To the guys in Glastonbury I recently spoke to through email and who I know read HN, this isn't directed at you, even if it may sound like it.

ra2• 15 years ago

As a customer, paying a monthly subscription roughly on par with the price of a CD for "all you can eat" music is, I think, bloody good value.

It seems to me that Spotify are killing it.

JonnieCache4• 15 years ago

There may be some confusion here, ra means "killing it" in the inverted slang sense. "Killing it" here means "laying waste to all before them," rather than "destroying their own business model."

larrik2• 15 years ago

I don't disagree with your post, but I'm having trouble seeing how it relates to mine.

I wasn't saying you can't make good or valuable music companies. I'm just saying almost none of them make a decent profit, and therefore I won't touch them.

I mean, satellite radio was basically built on talk shows.

Or Pandora, the current winner in internet radio, from their IPO filing: "The company has brought in $90.1 million in revenue as of the first three months of its 2011 fiscal year and has lost only around $300,000." (VentureBeat)

It's an industry where even the winners are failures.

erikstarck• 15 years ago

My guess is this is a requirement from the record companies for a US launch.

So, might actually be good news for Spotify - and you americans who can't access this excellent service.

muyuu2• 15 years ago

I can see myself uninstalling Spotify by the time it starts failing to play the music I want to play more often than not.

This sums it up, I think (quote from the link):

The blog ends with "Above all, this means we can continue making Spotify available to all in the long-term." which suggests this move is made out of need rather than of want and effectively that translates in to 'an advertising supported free music service is not viable'.

Crunch Time for Spotify

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