Friday, September 11, 2009

Spoti-fried

So apple approved spotify for itunes, people were surprised. Perhaps they forgot the business that apple are in - selling hardware. itunes exists as a means to an end, to supply music/apps to ipod devices. As anyone who sells to it will testify - itunes is not a brilliant retail platform, it is functional at best. It has the massive market-share as a result of the desirability of the devices, not by being retailer of the year.

It remains to be seen whether spotify is the itunes killer. Given that the spot-app is only available to those paying the premium I would suggest not. As usual there are economic reasons why I feel this way. Spotify premium is £9.99 per month and, whilst it has some great bells and whistles, you still don't own the tracks. In essence it just adds to their portability.

Given that most people go to itunes for single tracks (£0.79 to £1.29ish?) and single tracks are seen as the future perhaps the Spotify premium fee will be the hurdle that is just too high.

At the initial advent of Spotify many of my colleagues had predicted that the natural route for itunes to take would be full-track-previews. Perhaps they didn't fancy the fight with the labels to acquire such rights, maybe they've moved on.

Some of those same friends and colleagues are now convinced that apple are getting a large chunk of the Spotify premium fees, in time this may or may not be proven. If, as many believe, Spotify's business-plan is to build the numbers then sell-out this may well be true.

In the week that they were added to itunes Spotify UK went back to being 'invite-only' for non-premium subscribers. This was either very clever or very stupid - at the time that you get your best press you remove the option of the free trial. If you want to move people on from file-sharing-freeloaders to heavy-streamers it is certainly a big mistake.

In the meantime apple just sell more devices, and one of the additions to the new nano - an FM radio. Once wi-fi becomes king, broadband becomes super-reliable everywhere and the iphone is the device du jour maybe we don't need Spotify as we'll have access to any radio station on the web, including those new ones that let you choose the songs........

2 comments:

Niklas said...

Interesting post! While I agree with a lot of your points, there are some that I disagree with.

"Given that most people go to itunes for single tracks (£0.79 to £1.29ish?) and single tracks are seen as the future perhaps the Spotify premium fee will be the hurdle that is just too high."

We will have to wait and see. Do people want to add ten tracks per month to their mp3-collections or have access to millions of tracks everywhere? Spotify is immediate. You think of a song, you search, you listen. iTunes and piracy don't offer immediacy. Spotify hence is the game changer.

"This was either very clever or very stupid - at the time that you get your best press you remove the option of the free trial. If you want to move people on from file-sharing-freeloaders to heavy-streamers it is certainly a big mistake."

I think you are making too much out of this. Spotify want to give users a 100 percent quality experience. Too many users too quick threatens that. Besides, it's not that much of a hassle to find a Spotify invite these days...

"Once wi-fi becomes king, broadband becomes super-reliable everywhere and the iphone is the device du jour maybe we don't need Spotify as we'll have access to any radio station on the web, including those new ones that let you choose the songs........"

This was a bit confusing. Are you saying that once there are pirate alternatives that offer the same service as Spotify, people would choose these? What Spotify has done so far is certainly not easy and it's for sure not something that just any company can to for free. Or just how did you think that an on-demand free streaming radio station should be financed?

PF said...

I was writing off the cuff to an extent, reacting to the news of the removal of 'free-access' without giving it too much contemplation. As you may see from other posts I do believe that Spotify is a game-changer.

In terms of the final confusion; if we accept that the iphone (and it's ilk) are the portable portals to the web - and that one day there will be more radio stations playing 'on-demand' tunes then they may be the eventual challengers to Spotify.