Wednesday, July 22, 2009

Spotify Continues to Break New Ground

The music streaming sector is just about to become significantly move interesting. We have long supported the Spotifty service which in our opinion is one of the music models for the future and makes consumer and business sense. Spotify has just announced a deal with IODA (Independent Online Distribution Alliance) which will add a further 2 million tracks to its catalogue. We are also aware that it has plans to launch in the IUS later this year and there are rumours of an iPhone app.

However, we now await the heavily rumoured Microsoft offer, (they always appear to be late to most parties today). We believe the Microsoft entry will have a significant impact in raising the profile of streaming services, add competition if integrated with its other offers, could pose a threat to Spotify whose stellar growth has been largely built on word of mouth. The US may prove a major battleground.

The other interesting aspect of Spotify’s latest deal is that it will not only bring in independent labels and artists such as The Prodigy, Bob Marley and the Wailers , but also Stephen Fry’s witterings. This in turn starts to question why not audiobooks ? The question is whether a streaming service should be restricted to one genre, media format or whether it should be open to all. The obvious line in the sand today is audio versus visual, but is that a real line tomorrow? When video can easily accommodate audio, should audio restrict itself and in doing so leave itself exposed?

If we were audiobook publishers we may well be tempted to start to think hard about Spotify. Forget trying to imitate and copy it or looking for a specific audiobook service. This approach is too narrow and often tied to day’s model, but look instead at making a step change that is clearly making sense to others. What will it mean to audio rights, royalties, earnings – we don’t know today, but that is no excuse to ignore it.

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