How does Spotify make sense - it seems crazy to me!!

[TheMarqueeYears]

I really like Sting,

So normally he brings an album out, and to hear it I would rush down to town and buy the CD .... it was kinda exciting.

Now he has released "If on a Winters Night" and a day later there it is FREE on Spotify.

So I'm now listening to it (sounds cool) and it's cost me NOTHING!!

I really don't get it ... it just seems madness to me.

Can anyone explain it to me.

Thanks
TMY

[psycho_monkey]

- advertising

- paid for ad-free subscriptions.

-on the go listening still requires you to purchase the CD (or at least cough up for the paid for subscription)

if it's a sustainable model remains to be seen.

[TheMarqueeYears]

Right ...

Ok so I have to listen to an ad every 20 minutes (which doesn't really bother me, as I'm busy doing my accounts when I use Spotify)

How many times do I have to listen to the album, before Sting gets the same amount of money from Soptify as if I'd bought the physical CD.

100's .... 1000's .... 10,000's ?

At the moment it seems to good to be true, yet depressing speaking as a little known artist.

It doesn't look good for my estate in Tuscany! (I can live without the Jacobian Mansion)

TMY

[hankdrummer]

i don't think spotify will last long

it doesn't generate enough money
labels get so ridiculous money from it, they remove their content from it.

Hyperdub just removed all its catalogue

[TheMarqueeYears]

Originally Posted by hankdrummer

i don't think spotify will last long

it doesn't generate enough money
labels get so ridiculous money from it, they remove their content from it.

Hyperdub just removed all its catalogue

Did they, that's interesting ....

It seems an unsustainable model to me, I have this wonderful jukebox of almost every song, I've ever loved, and jazz and classical on tap for FREE!

I have this love, hate feeling about Spotify, I love it as a listener and hate the concept as an artist/producer.

Maybe your right, it'll flop and run out of money.

TMY

[zboy2854]

Supposedly the plan is to offer it for free (or rather ad-supported) right now to spread the word and get people used to the service and interface, then introduce a subscription model.

Either way, whether it's Spotify or some other company, it is clear to me that the future of music consumption will look like this, i.e. subscription based high quality on-demand streaming of whatever you want, whenever you want, rather than purchasing and downloading individual digital files or physical CD's.

[psycho_monkey]

it's a work in progress, that's for sure.

however - sting only gets paid once when you buy his CD (regardless of if you then sell it on 2nd hand). he gets paid every time you listen to his online stream. Might only be a penny each time you listen to a song, but if you get a favourite song that you play repeatedly, it's going to add up...I'm no expert on CD royalties, but I can't imagine sting sees more than a pound per CD sold.

[Mr_David]

I'd have thought more people would like this business model.
Don't know the ins and outs of "spotify" specifically but I think it's the way forward.

Certainly, the cd business will never recover. itunes will get less and less too.

The only way the music industry can make any money will be the same way google/youtube etc do it.

Attracting people to a website and selling advertising. Free for the end user but lots of money splashing around from traffic. Hopefully, some business plans will be drawn up whereby artists/producers/labels make as much money as CD era, if not more.

That's my wishful idealistic opinion anyway.

As everything, it's gotta be done right and I'm not convinced spotify has cracked it.
Maybe when itunes is no longer viable, apple could do it and make it work.

[ssaudio]

Originally Posted by hankdrummer

i don't think spotify will last long

Nor do I - I seriously doubt it will make next summer

[Raygun]

Spotify is a very serious attempt in this business and I expect to see some substantial growth. The product is absolutely fabulous and it's a nobrainer to pay the subscription fee. What's different about the subscription deal this time is that you so clearly pay for accesssing the content, not "renting" it. The only thing that happens if you stop paying is you'll get advertisement again. With the premium account, you have the iPhone app and you can use your playlists offline as well - killer. You can use it offline on the computer as well. As Spotify gets better and better and more and more people are using it and paying the premium fee - the more money it will make and the bigger the royalties get. Artists and labels who take their materiall off Spotify.. I think they are doing THE stupidest thing possible in music today..

[t_d]

i hate subscription based models, purely from a label point of view. we get about 1 cent if someone streams a song from our catalog from a subscription service (rhapsody, etc) and 60 cents if someone buys a track from iTunes or eMusic.

[claend]

Don't know guys, but for me it seems a way to create revenue. It's been in Spain for more than a year so far, and it's widely known now. After getting a free account, 10 minutes was enough to convince myself to purchase the Premium account... it's simply a ridicolous offer from a consumer point of view. For artists well time will tell, but is better than the presnet situation (almost no revenue), that's for sure.

My .02

[zboy2854]

Originally Posted by Raygun

Spotify is a very serious attempt in this business and I expect to see some substantial growth. The product is absolutely fabulous and it's a nobrainer to pay the subscription fee. What's different about the subscription deal this time is that you so clearly pay for accesssing the content, not "renting" it. The only thing that happens if you stop paying is you'll get advertisement again. With the premium account, you have the iPhone app and you can use your playlists offline as well - killer. You can use it offline on the computer as well. As Spotify gets better and better and more and more people are using it and paying the premium fee - the more money it will make and the bigger the royalties get. Artists and labels who take their materiall off Spotify.. I think they are doing THE stupidest thing possible in music today..

Yep, totally agreed. Everyone who uses the service absolutely raves about it. This is the model of the future, the only question will be whether the artists and labels continue to cut off their noses to spite their faces and cling to a rapidly outdated model of expecting consumers to pay for music tracks and albums a la carte.

[rectifier]

what about grooveshark.com - plays whole albums and no ads.. I don't get it.

[Jam]

Originally Posted by rectifier

what about grooveshark.com - plays whole albums and no ads.. I don't get it.

There's ads on the right hand side of the screen for me.

Also a link saying "remove ads for $3.00 a month"

So it seems, without close inspection, to be the same sort of model.

James

[rectifier]

Ah ok, forgot I had ABP on.

So.. by putting on a d b l o c k Plus (and millions use it) we are right back to the start of the problem with this *model*. Anyways that's veering off from the Spotify chat a little as they use a different ad technique I think.

[author]

Originally Posted by ssaudio

Nor do I - I seriously doubt it will make next summer

I hope it will go away tomorrow.

[Jam]

Originally Posted by TheMarqueeYears

I have this love, hate feeling about Spotify, I love it as a listener and hate the concept as an artist/producer.

Maybe your right, it'll flop and run out of money.

TMY

That's weird I feel the same way, totally irrationally though, I've not seen it on any of my royalty statements yet, so I don't have the numbers.

The gossip ( totally unsubstantiated ) is that Spotify did stock deals with the majors in lieu of cash owed, so I think they'll be given time to make it work, if it can !!

James

[Jam]

Originally Posted by rectifier

Ah ok, forgot I had ABP on.

So.. by putting on a d b l o c k Plus (and millions use it) we are right back to the start of the problem with this *model*. Anyways that's veering off from the Spotify chat a little as they use a different ad technique I think.

Makes sense.

James

[zboy2854]

Originally Posted by author

I hope it will go away tomorrow.

Yes, by all means keep fighting the future. You'll be in a glass case in a museum in no time at all...

[indravayu]

Originally Posted by zboy2854

Either way, whether it's Spotify or some other company, it is clear to me that the future of music consumption will look like this, i.e. subscription based high quality on-demand streaming of whatever you want, whenever you want, rather than purchasing and downloading individual digital files or physical CD's.

Yeah, I think when it comes to media, owning physical product will die off with the Baby Boomers (outside of the small community of audiophiles, anyway). For people who spend a lot of money on iTunes/Amazon downloads (like I do), having access to an amazing catalog of on-demand music for a small subscription fee will seem like a bargain - plus, you never have to worry about hardware crashes/license transfers when you switch computers.

[beanface]

Originally Posted by Jam

There's ads on the right hand side of the screen for me.

Also a link saying "remove ads for $3.00 a month"

So it seems, without close inspection, to be the same sort of model.

James

Maybe these different sites will just replace HMV, Virgin, Zavvi etc... Its seems pretty likely. I'm sure a few will go down the pan in process. Maybe iTunes et al, are the transition models?

[Rabbit]

I was curious about Spotify but unfortunately it's not available in the US yet so there's not much for me to check out.

[mobius.media]

imeem is pretty much the same, only with a clumsier interface.

[hankdrummer]

live streaming (with offline option) is the future, no doubt, but it's too early right now.

Apple will launch it's subscription service for sure, but only in a few years i guess, when digital sales will be too slow

btw, video games stores will soon be a thing of the past as well.

[TheRealRoach]

Just heard about this for the first time today. Made the news in Canada's Globe and Mail:

How Spotify might save the Music Industry

I think the model will last. Whether it actually makes a difference with industry finances is a different story.

Case in point: my 15-year-old brother in law hangs out at my apartment a lot and brings his nifty iPod (the one that looks like an iPhone) and uses YouTube as a sort of defacto on-demand music player.

[author]

Originally Posted by hankdrummer

live streaming (with offline option) is the future, no doubt

On the contrary, there's a lot of doubt about that.

It all depends on one thing: Are artists going to be payed? Or will we just see a lot of Spotify's?

Nobody knows.

[mattssons]

It´s darn popular here although some artist drop out because they get paid next to nothing from it.

The thing to know is that from what i recall Spotify is owned by major recordcompanies and a cut for the developing company.

I hope they get the model to work well, so artist can be paid with streamings and not just gigging these days. /Toby

[Clonkified]

Spotify's business model is not sustainable. iMeem proved that. MySpace Music is trying to do ad-supported streaming but is bleeding money. Grooveshark is like Seeqpod - it will be shutdown imminently. Ad-supported music doesn't work based on the current monetary asks of the content owners (labels). Ad revenue just isn't high enough.

But don't worry - lots of smart people (and me) are thinking about this problem everyday.

[zboy2854]

Originally Posted by Clonkified

Spotify's business model is not sustainable. iMeem proved that. MySpace Music is trying to do ad-supported streaming but is bleeding money. Grooveshark is like Seeqpod - it will be shutdown imminently. Ad-supported music doesn't work based on the current monetary asks of the content owners (labels). Ad revenue just isn't high enough.

Ad supported may not be sustainable, but most people I know who have used Spotify have ended up paying for the premium subscription service, because the user experience and interface is so good and intuitive.

And that's the key. Make the user experience such a no-brainer that people will gladly pay for a monthly subscription. Spotify has done that, where iMeem, Myspace and others have failed (not to mention the audio quality issue). But as long as artists and labels are so afraid of the future and continue to cling so tightly to the current paradigm despite the fact that it's clearly sinking fast, then the process is going to take a lot longer and result in a lot more lost revenue for those artists and labels.