Thoughts On Spotify

SSpotify, the subscription-based music service has incurred losses of £16.6 million during 2009. Although much of this figure can be attributed to royalties paid to record labels, the Swedish company has again pushed back its service’s introduction into the US market.

I like the ethos of Spotify. For one thing, it’s free; and for a second thing, it’s easy to use. Sure, it hasn’t (at the time of writing) updated its database to include Yngwie Malmsteen’s new Relentless album, but it does include much of his back catalogue. It’s almost like being your own radio DJ, because if one opts to use Spotify for free, the only hindrance is the presence of an ad every few songs played—you do get to choose the songs, DJ!

The underlying question is whether there is room for a profitable music medium, which also offers free content to its users. I’m not quite sure that Spotify will ever boast quite as many subscribers to its services as it does free members.

Spotify

It would be interesting to find out just how many European Dotted Music members are also members of Spotify. Does music have to be free for you to enjoy it? What is your personal estimate regarding how much you would pay per month to gain access to Spotify’s music database? With the Premium Spotify package currently standing at £10 per month, do you find that to be a reasonable figure? There are a lot of questions to be answered before Spotify’s business model can be exported to the United States. Do Dotted Music members in the United States want to see the introduction of this subscription-based service in their own music market?

On a personal level, I’m not entirely sure that a subscription based-service is the best progression for the music industry. I think that although it seems to grant hitherto unprecedented listening access to vast numbers of songs, it seems to ignore the probability that for as long as there is a wholly free element to Spotify, it will most likely represent the most popular aspect of the service. This really puts the onus of funding Spotify upon advertising, and with a not so meagre few million pounds coming from this source, it wouldn’t be surprising to see Spotify’s owners tapping that resource further.

If you look at the United States radio network, it does rely more upon advertising than the BBC-dominated UK. Perhaps that is enough information to go on for Spotify’s owners to take the risk in the United States. Being acclimatised to frequent advertisements, the US listener would perhaps be more patient with the brief advertisements ubiquitous in Spotify’s free service. A hindrance to UK listeners could prove to be but a minor snag for the US market.

One word of advice though: don’t take this product to the USA without a strong business plan; failure could spell the end to a Spotify service, which, although intriguing, cannot afford to suffer losses at its 2009 rate for much longer.

By Sam Agini, for Ultimate-Guitar.com and Dotted Music.