Friday, October 9, 2009

The state of Spotify?

I am something of a Spotify obsessive. I believe that it can play a major role in the future of the music industry, I just fear that it may not be allowed to.

In prior blogs I have doubted that the current advertising and subscription model could work, I believe it can - but not at the current price.

Today Spotify founder Daniel Ek writes eloquently to/in The Times and makes some excellent points about the industry as a whole.

To an extent it's a vicious circle, a catch-22: the advertising-model will only work when they reach a vast number of users and the company will only last when it achieves the right balance of subscribers to free-users.

For the ad-model to work they probably have to crack the States, where Spotify is still not available. One label is holding out on them and Ek's letter and the subsequent news-article are part of the ongoing process in attempting to change that situation. He needs to buy time.

They are interesting arguments, but if Ek succeeds in re-modelling the price of streaming (to his company) the labels may find themselves besieged by radio stations and similar music-broadcasting companies also wishing to re-negotiate their rates. It should be noted that radio stations in America work under different rules relating to payments for their music, an explanation of which can be found here and here

Though I have vested interests in saying so, I strongly believe that radio will play an ever-increasing role (in the UK particularly)in the divisive areas of streaming and music discovery. UK radio is uniquely placed in already having agreements with the labels & publishers, as well as direct relationships with the artists which could see it moving to a different level.

Streaming itself may well (eventually) succeed in killing the illegal download, removing the motivation or necessity to do so, but if we believe that file-sharing exists because of pricing issues then it may be that the Spotify subscription price may also have to change.

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