Comments on: Hold on tight, Spotify is taking us on a ride!

By: Newyouril

Newyouril — Sat, 30 Apr 2011 11:09:22 +0000

By: Thomas Drapier

Thomas Drapier — Tue, 04 Aug 2009 17:32:21 +0000

Thanks for your insight Janek. I agree with you, the music industry is to stay. What is changing is the way they are getting their income: as you described, through a streaming license rather than through more traditional revenue channels such as CDs and downloads. The pressure is now on Spotify, they need to pay for these licenses and make sure they do not fun out of funds with that small ratio of paying/non-paying users. It looks like they have it sorted out for now, as they’ve just raised some cash with a $250 million total valuation.

The fact that the iPhone app will only be available to paying users is news to me, and if you’re right I think it’s a pity. It would indeed be a way for Spotify to increase that ratio.

By: Iain

Iain — Sat, 01 Aug 2009 18:36:48 +0000

Look what popped up on Digg.com

http://www.engadget.com/2009/07/31/fcc-now-inquiring-about-atandts-involvement-in-google-voices-iph/

“Yeah, we’re pretty much all peeved by Apple suddenly ejecting all traces of Google Voice from the app store, but now it looks to have drawn the ire of the Federal Communications Commission…”

This might make Apple think twice about turning down Spotify!

By: Iain

Iain — Sat, 01 Aug 2009 18:18:49 +0000

Great insights. It’s easy to forget how many different parts of the technology world these changes reach.

By: Janek Mann

Janek Mann — Fri, 31 Jul 2009 16:20:13 +0000

I have to disagree with your premise that spotify is a danger to the music industry… Every track played on spotify makes money for the music industry, and most music on spotify is distributed through the major labels… In fact it is only recently that spotify had opened up to independent artists through their collaboration with independent artists.

Now one might argue that a CD costs a lot more than listening to a track on spotify, however the majority of consumers have always had a very limited monthly spend on music… Perhaps 1-3 CDs per year. In contrast a subscriber to spotify pays 10£/m every month, 120£ per year (of which we can assume that a significant proportion ends up in the coffers of the music industry, even if partially by subsidising the streaming rates for non-subscribers). Of course less less than 1% of spotify have subscribed so far but even the streaming rates that spotify pays are more than most of the alternatives for the music industry (bittorrent say).

As for the iPhone app, if it gets approved, that will only be usable by paid subscribers and should lead to a significant increase in their numbers.

Of course it is always a challenge for an industry to adjust to such a new model, and the music industry could have had something not too dissimilar in the Napster trying to go legit around the time of its lawsuit, but it has taken them this long to adjust to the reality (and, I would argue, the potential) of new distribution models.