18 May 2010

Spot(ify) the Trend

One of the reasons that digital music will be free - whether the recording companies want it or not - is basic economics: the marginal cost is practically zero, which means that the price will tend to that point, too. And now we have this:

Spotify is slashing the cost of its advert-free music streaming in the UK and Europe, in a bid to win more paying customers besides just mobile users. It comes in two new tariffs Spotify’s introducing…

—Spotify Unlimited: £4.99pm/ for no-ads music, but no mobile access, no offline or MP3 play and no higher-bitrate quality.

—Spotify Open: Free, with ads, no invite required, but no mobile, no offline or MP3 play, no higher-quality and limited to 20 hours a month.

What's interesting here is that Spotify has already been accused of not paying artists much for each play: this new pricing scheme is likely to mean their fees won't be going up anytime soon. The sooner artists use free digital music to enable them to make money from analogue scarcity, the better.

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Andrew Katz said...

The next stage is to get rid of the pinch point in music distribution which is the label.

Last.fm used to have a facility for anyone to register as a label or an artist, and upload music. This would then be hosted by last.fm, with the option to have the full mp3 downloadable by listeners, or to have the full track streamable on demand (to anyone, subscriber or not).

This was an excellent friction-free music distribution mechanism, and enabled artists to play on a level field with the labels.

However, this facility recently disappeared, with a rather unconvincing explanation here: http://blog.last.fm/2010/04/12/yes-it-does

General outrage amongst users ensured, some of which can be seen here: http://blog.last.fm/2010/04/21/the-artist-feedback-loop

We are currently waiting to see whether they are going to (re-)introduce the functionality we signed up to last.fm (and in my case, paid for) in the first place.

Spotify has no facility to upload music directly, although there is a discussion of alternatives here: http://getsatisfaction.com/spotify/topics/can_i_add_my_bands_music_to_spotify

glyn moody said...

@Andrew: excellent points. There's a huge opportunity here for someone...Spotify would be well advised to grab it before someone else does.

Tony Locke said...

I think the 20 hour monthly limit on the free version is new. Spotify is betting on people switching to the paid version when they hit the limit, so their overall revenues could go up.

glyn moody said...

@Tony: a natural enough desire on their part...