Spotify opened its doors as a free music service a couple of weeks ago. Up to that point the only way you could use this online music resource was to be invited or to pay for the service.Spotify itself is a streaming music service that, once downloaded and installed to your machine means you can listen to music real time meaning you don’t have to download the tracks to your machine. The interface is very much like iTunes and is even more simple to use and understand. It allows you to browse music by artist or album, you can play full back catalogues, create playlists and save your favourites lists.
Spotify, who have deals with major labels such as EMI, Sony BMG and Universal, are able to provide this service through 2 routes. Firstly you can sign up to the free service which runs 15 seconds of ads every half hour, or you can sign up to a ad free service for £9.99 a month.
Through innovation inspired by digital advances Spotify is a significant step to changing the established business model of paying directly for music. As we have seen in recent years this old business model has clashed violently with technological change that has allowed people access to illegally downloadable ‘free’ music. The argument is that this old business model must change and adapt to fit the economics of the new world. These big corporations can’t rely on people doing the right thing by buying music just because they say we should and then try and legislate against us if we don’t comply. This has to be one of the primary reasons why Spotify has been embraced by the big record companies – why would people illegally download music when it’s freely available anyway?
Of course there are pitfalls but that has to be expected for such a fledgling start up. The service is only available when you download the application to your desktop, in other words it’s not portable yet, although iPhone and S60 apps are on the way. Once the service does go mobile the only thing stopping you from listening to all the music you want while you are driving your car or out for a jog will be your connection capabilities. I’m afraid though that you’ll have to wait while TFL sort out their connection issues before you can listen to free music on your tube journey to work.
The other big question is can music be paid for purely on an advertising and subscription basis? You could argue that within this new business model of free music the mind set should be that people will pay more for the derivatives of music such as gigs, merchandise, live broadcasts and the like.
Money will be made from the direct marketing opportunities that will offer the ability for advertisers to reach specific fans segmented by location, preference, age group and gender. This though may only be appealing for advertisers of particular brands such as music and entertainment but only time will tell and as Spotify’s catalogue of tracks grows surely so does the appeal to greater audiences.
These though are hurdles that will be jumped. We need to be grateful that the starting gun has fired and Spotify have sprinted off the line.
