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Free mobile version of Spotify to be introduced

According to the Wall Street Journal, Spotify is about to introduce a free mobile version.

The new ad-supported offering will allow nonpaying mobile users to play a limited number of songs on demand, but will mostly serve up music based on the user’s input, much like custom radio services such as Pandora.

This move makes a lot of sense.

The usual path of a Spotify user was to get the free desktop version and then they would eventually upgrade to premium. Either because of the ads or because of the mobile version which is currently limited to premium users.

But given that traditional computers are on the wane, Spotify is slowly losing their only channel for users to upgrade.

Of course the free mobile version will cannibalize some of the premium users. But how many users are there that would pay €10 for the full mobile version, that would swap that for a free radio service (with only limited on-demand songs)? Probably not many.

Hat tip for getting that deal with the record labels though. Must have been a nightmare to negotiate.

10
Dec 2013
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New Artist website from Spotify gives interesting insights into business model

Exciting stuff going on over at Spotify: Today a new website for artists, www.spotifyartists.com, was introduced. On this website, Spotify gives – among other things – some interesting insights into their business model.

Spotify Revenue Model

So basically, Spotify take all the revenue from paid subscription and ads, keep 30% and multiply the rest by the times the relative number of streams of an artist. This is what the label gets. The artist ends up with whatever is left after the label takes their cut as negotiated in the individual contracts.

So Spotify does not pay per stream, but rather pays according to the formula above (i.e., in relation to an artist’s relative popularity on Spotify). Of course it’s possible calculate the per-stream payout ex-post:

Recently, these variables have led to an average “per stream” payout to rights holders of between $0.006 and $0.0084.

Has anybody calculated yet how that compares to CD sales? Taking into account – and I believe that’s crucial – the long-term revenue stream? As far as I can see it one of the key differences is that Spotify will create revenue for every stream, long after the last CD has been sold. I’ll take a closer look at that…

04
Dec 2013
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Rdio, please don’t die!

Rdio LogoAccording to Techcrunch, Rdio is laying off people – allegedly up to 35 people or 25% of the work force –  “to improve its cost structure and ensure a scalable business model for the long-term”, as TC quotes a Rdio spokesperson.

In other words: Rdio’s investors are getting cold feet thinking about the burn rate. Which is quite understandable in a way.

Seeing that Spotify and Deezer seem to be putting a lot of investments in improving their service (see my recent posts on Deezer and Spotify) I have my doubts that now is a good point to start cutting investments – least of all in engineering, where reportedly “significant cuts” have been made.

Also, if the number of (paying) users are falling behind expectations, cutting your marketing budget isn’t going to help either.

On a more personal note, I really really don’t want Rdio to day, as I’ve just decided to move over from Spotify. In my opinion, the app is superior in many ways, as I’ve discussed recently.

So Rdio: PLEASE DON’T DIE!

22
Nov 2013
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Deezer introduces “Personal Music Feed” and “Deezer Editors”

Deezer just introduced the “Personal Music Feed” as well as “Deezer Editors”. Here’s a quick wrap up on what it’s all about, and how it compares to Spotify.

The feed can be found as “Hear This” within Deezer. Looks pretty good – and quite similar to Spotify Discovery, released back in May.

In the FAQ Deezer gives a few more details on how the newsfeed is generated:

“There are several types of recommendations:
– choices based on your listening habits
– selections from the Deezer Editors around the world
– new music from artists you love
– Deezer Sessions, Deezer Apps. and partnerships
– suggestions from your friends”
(source)

With the Personal Music Feed, Deezer tries to give their users a richer experience of music discovery. The big challenge Deezer tries to solve of course is to help their user find new music, without having to actively search for it.

(more…)

22
Nov 2013
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Just ran into Spotify 3,333 track limit. Not happy.

Spotify_exclamation

About 90% of the time I use Spotify on my mobile. However recently I just so happen to travel a lot in regions with a bad network. ‘No problem’ I thought, ‘Luckily there are Offline Playlists in Spotify’.

This worked quite well for a while, however I quickly ran out of space on my phone. Since I’m on iPhone I didn’t just get a new 64GB sdcard for 20 quid, no! I bought an iPod just as Steve Jobs would have wanted me to.

Anyway, so I decided to get all my playlists – and I have quite a few ones – offline. After a while however, syncing stopped and all I got was red exclamation marks next to my songs, indicating that they could not be saved offline.

After a bit of  research I quickly found in the Spotify FAQ:

You can sync a maximum of 3,333 songs per device and stay offline for up to 30 days. (source)

Well this sucks balls. Some might point out that those 3,333 songs are about a week’s worth of music, but that’s not the point: If you are a music junkie and want to carry around your entire music collection (which you could on an iPod) than those 3,333 songs (or about 250 albums at an average of 13 songs per album) are just not enough.

Why on earth would they impose such a limit in the first place? Well, as one of the forum admins suggests:

The limit is down to the licensing agreements Spotify has with the record labels. (source).

Funny thing is that Rdio or Deezer do not have such limitations. Even if Spotify was the first in the game and go a worse deal then their followers, now would be a good time to re-negotiate some of the contract’s parameters.

 

12
Nov 2013
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Y U NO HAVE COLLECTIONS, SPOTIFY?

One thing I still miss on Spotify is a convenient way build your music collection. I may be old fashioned, but what I basically want is to have a collection of “my albums” in one place so I can browse through my music and decide what I want to listen to.

Since there’s no way to do that in Spotify right now, I currently build my collection using playlists and playlist folders: I basically create a collection for every album, then put all those album into a folder called “Collection”. Since there’s no way to sort playlists alphabetically, I have to do that myself – manually. So while it kind of gets the job done, it is quite inconvenient and cumbersome – and takes ages. Here’s what it looks like:

DIYcollection

Looks quite alright and is reasonably convenient – once it’s set up. Also, there’s no way to do this within the iPhone app at all, so when I’m travelling I have to wait with my organizing until I log into my Windows app on my laptop.

I really wish Spotify would start offering a solution similar to Rdio. Rdio has done a great job allowing for this use case:

RdioColl

Really super slick and it works great!

Back in December 2012 Spotify announced they were going to introduce collections as well. As of now, however, they sadly still haven’t found their way into Spotify.

However, it seems like they’re working on it: Try entering “spotify:app:collection” into the Spotify search bar (thanks to the Spotify forum for the tip). You’ll see an early draft of the Spotify collection:

SpotifyCollection

Alas, it’s not quite a music collection a I would imagine it, as it only contains albums “Recently Added” and “Most Played”. Still, it is a start, and hopefully Spotify will continue improving on it.

 

04
Nov 2013
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The 3 stages of music discovery

Recently Spotify’s Daniel Ek introduced Spotify Discovery (read the wrap up here). In his speech he pointed out the benefits of context for music discovery. So just to pick up his point, here’s what I think are the three stages of music discovery – radically simplified.

1) User searches

2) Recommendations

3) Context

In the most simple form, music streaming services offer their users access to music. To find something to listen to they would have to enter a band or song into the search tool to find what they wanted to listen to.

In the next step, recommendations, the tool will suggest something to listen to. This may be based on the user’s history, other users, genre-classification or whatever.

The next stage adds an extra layer of context on top of that. Instead of just giving recommendations, the tool will add context – why should you listen to a given song or album.

Let’s see what comes next!

22
Mar 2013
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Do we really care what music our friends like?

spotify_hearts_fb

Back in 2011 Spotify said that “Music is one of the most social things there is.” In what sounded like a threat they added “You’ll now start seeing new music posts and play buttons all over your newsfeeds.” And indeed, we did. Even when the posts became more balanced, I never really felt that it was that interesting to know what my friends were listening to (still far more interesting than pictures of food, offspring, or offspring eating food though. You know who you are!).

The other day I came across this article by Robert Andrews where he concludes:

“For me, music is not “social” but is, in fact, the most personal cultural artefact imaginable. So, when Spotify has shown me what my friends are listening to, I just realise this — I love my friends, but I hate their music.”

I think he’s absolutely right – of all possible sources of music recommendation, “what my friends listen to” is probably the least relevant one.

But what’s the real reason for the facebook integration?

I doubt that giving people valuable music recommendations is really the reason why Spotify wants to flood our newsfeeds with music posts. The real reason – and far more compelling at that – is probably just to get some buzz and visibility on facebook, be it relevant or not. If I see 10 times a day that someone in my network listens to SOMETHING on SPOTIFY, there’s a chance that once I decide to try online streaming Spotify’s going to be the first thing that comes to my mind.

In other words, Spotify is currently in the growth stage of the product life cyle. The advertising focus during that phase is typically to build awareness in the mass market (see Kotler’s classic ‘Marketing Management‘ or one of the summaries (e.g.).

In conclusion, Spotify does the absolutely right thing in terms of marketing their product. Helpful recommendations, however, are an entirely different story.

 

17
Jan 2013
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WiMP enters German market

After the music streaming services Rdio, Rara.com and Deezer only recently entered the German market, yet another player will join the merry crowd : WiMP (yes… let’s hope they change their name for the English-speaking market!) is the name of the service, and users beta access can be requested on their German website www.wimp.de.

So what are they bringing to the market? As Thor Martin Jensen, Global Editorial Manager of WiMP said on musikmarkt.de, editorial content will be at the core of the service. Also, their plan is to allow the music industry to participate in the development of the service.

According to Musikmarkt, WiMP the editorial content will come in the form of playlists, recommendations and other editorial content that’s targeted at the German music market. In addition to offering the latest releases, WiMP will also focus on allowing users to “rediscover the back catalogue”.

Let’s see how that goes. By the way, Spotify, where art thou?

08
Feb 2012
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Piracy is the new radio?

Piracy is the new radio. That’s how music gets around.
(Neil Young at the D: Dive Into Media conference, via allthingsd.com)

As much as I appreciate Neil Young as an artist, I very much don’t agree with this sentiment. For one, if a song is played on the radio, the artist gets royalties. Second, the radio, as opposed to pirated music, is not a substitute for a CD or a legal download (turns out home taping is, after all, not killing music).

Pirated music, on the other hand, is quite a good substitute, as the popularity of piracy demonstrates.

His point is that pirated music may help to promote music. But if music “got around” by piracy, very few people would still buy CDs or legal downloads.

It may not be a perfect substitute, but it’s good enough for most people.

Furthermore, for an established artist such as Neil Young the small number of people that would still buy CDs and go to concerts may be enough to pay his rent, but it would not allow newcomers to survive.

03
Feb 2012
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