Google is now going after the music business

It is rumoured that a new Google service will offer digital track and album downloads à la iTunes, on a per-track or per-album basis and also a "digital locker" streaming service allowing users a $25 per year subscription to online access to their music library via desktops or mobile devices. Any tracks purchased via the download option would also have those tracks automatically added to the locker as well.

It is claimed that Google also wants a license to allow users to listen to a full-length preview of any song once, after which they would be limited to 30-second previews and will enable users to create playlists that they can share with friends that would allow them to listen to each track in the playlist once before being limited to 30-second previews.

Google clearly are after the media space and to offer media on demand albeit books, music and of course video via YouTube

Spotify Now Growing Premium Service

People keep asking why we support Spotify so much and what’s so special about it. The answer is simple if you recognise and believe that online is going to dominate the future and the streaming music is no different to streaming, film, TV and of course books. The other interesting aspect is the business model which challenges payment and replaces it with advertising and subscription but still offers payment!

The Swedish music streaming service has declared that it now has over 320,000 premium users and some 1,000 more joining their paying service every day. We get it bundled in free with our Andriod Hero phone which means we have it on all our devices. Premium users enjoy better quality and advert free music on and off line.

Spotify is now available in six European countries including the UK and has a further 7 million users who enjoy the vast catalogue for free with an advert every 30 mins.One interesting point reviewed by Spotify is that 30% of playlists are of whole albums, which is interesting given the recent Pink Floyd case and today’s obsession with individual tracks. lkb proving that not all web users are more interested in individual tracks rather than albums.

So were Spiral Frog failed others such as Spotify are succeeding and they are not only changing business models but also consumer habits. It certainly will be interesting when they land in the US.

Warner Threatens Music Streaming Model

We have long watched and waited for music streaming to become commercially viable and right back to the days of Spiral Frog we could see the potential, it was just a case of getting the model right.

The big success story of last year was Spotify, who took captured 7 million users across six European countries and presented competition for others such as Last.fm and We7. The record companies came on board, the consumers came onboard, the advertisers came and importantly they started to break the mould. Some said it was just like having your own radio station, playing your own selections and for a premium payment, you could even switch off the adverts. However the majority selected the free model based on advertising sponsorship over subscriptions. Three mobile even plugged Spotify premium into their contracts and we got it included in ours.

Now Warner, one of the four major labels, have declared that streaming services were "clearly not positive for the industry". The real issue is that they are not lucrative enough for labels and the fact is that the are popular with the consumers and are legal.It obviously would make sense to fight piracy with something that consumers clearly want than acting like a spoilt child and saying ' we don't want to play'.

So 7 million are on Spotify, 2.5 million are on We7 and there are others queuing up to offer the new service and we also have the likes of the mobile operates getting in on the opportunity, but a major label now wants to change the game and move the goalposts. Does it sound familiar to other media markets where commercial controls are being fought over?

Will Warner merely tear up the deals they have and tell 10 million consumers they got it wrong and don’t want to play any more? Will they try to shift the price up, demand subscriptions for all and demand a greater return? Will they honour what is in play today and squeeze future deals out?

What is clear is that Warner are showing the sort of uncertainty and arrogance that has been indicative of the music industry labels since the advent of digital. The one industry not to follow is music and its digital music experts, that is unless you want to know how not to do it.

The main legal streaming services have deals with most major and independent record labels and pay royalties for each song played but the amount is less than a label would earn if that song was downloaded or if they had a greater slice of a listener's monthly subscription.

However just to demonstrate that music is a minefield of contradictions, Rob Wells, senior vice president of Universal Music Group International, said only last month that Spotify was well on the way to proving its commercial viability and had, ‘a very sustainable financial model - full stop’.

Will Warner pick up their sticks and leave the field demanding their new terms are met? Will Spotify delist them? Will consumers go back to downloads and the old model or will they return to the pirates? These are dangerous waters and raise many questions about who controls what? It is also about giving consumers a continuity of service and trust that what they have bought or signed up to will not be withdrawn because someone changed their mind.

It would be a tragedy if Warner renegotiates with Spotify,content is withdrawn and the commercials are rewritten before they have had chance to settle. It isn’t just about getting premium subscriptions but also about the advertising model and shifting to streaming technologies and that takes time and importantly needs consumer confidence to be sustained not played with.

The pirates will obviously be watching with interest as Warner tries to correct what they see is wrong with the model today.

Are We Listening To The Music Industry?

We are often asked to look at other media segments and learn from their experience and one that is often quoted is music. We are also often asked to fear ‘free’ and a change to the business models of today. Some would say the mistake the music industry made was waiting too long to provide a business model to support pay for digital and everyone got accustomed to the idea of free. Other would say that it was their inability to understand demand and react. Napster, Kazaa and others merely did what everyone was doing anyway but did it better.

So it is very interesting to watch music today as it grapples with the new Spotify model which is now one year old. Not only are they going to new places with their free model but they are also treading an interesting path with their premium £10 a month model. A premium user can now store more than 3,000 tracks offline, to listen to as and when you want and these are accessible on the move via an iPhone, iPod Touch or Android phone. The equivalent cost of ownership would amount to some £2,3005 or 20 years subscription on Spotify! An added bonus is that you can switch off spotify payments and when you switch them back again you still enjoy the same level of access.

Now Napster is to offer unlimited streaming for £5 per month plus five DRM-free downloads without charge with extra downloads charged at a modest 59p.

Forgetting the current skirmishes between napster and Spotify what is fundamentally changing is the way we collect and consume music. Why buy when you can rent and pay by the frink, or for many on Spotify, pay nothing to use. Spotify's use of "freemium" where you can use the ad-supported version forever and move to premium on demand makes sense for all. The question now is does this model work in other sectors such as books? Well we do have the public library challenge that is still outstanding and offering a similar opportunity. It is easy to see the appeal of a Spotify for books model – after all its all media. So while the industry continues to demonstrate that it can’t make it mind up on ebook pricing, as always, others have the potential do it for us.

Spotify Number 1 Top of the Pops

Even though its usage is restricted to Europe and it costs £10 a month to use, the free at point of consumption digital streaming service has within days of its release hit the number one app download spot. iTunes App Store free downloads The Spotify application, which also allows offline listening, was released on Monday for Spotify premium subscribers in the UK, Sweden, Spain, France, Norway and Finland.

This ad free service gives subscribers access to millions of tunes and pays dues to the artists. It certainly a model to watch not just for music but other media. They now have the audience, the model, the channels (they also have an Andriod offer) and could effectively revolutionise how we access, pay and enjoy a library of works.

We now wait to see if Apple want to revamp iTunes or are happy to see their lunch being eaten off their table.

Watch Spotify on an iPhone

We previously reported about the streaming music service Spotify development of an iPhone app. Before it has been accepted by Apple Spotify have now released a YouTibe video showing just how it would work on an iPhone both on and off line.

Apple has already approved streaming music applications from Pandora, Last.fm and Sirius XM, so it will be interesting to watch their reaction to what is clearly a cut above them all Spotify. The iPhone application will require users to be premium service members which is ad-free and costs £9.99 a month.

We now wait and hope it will be approved.

Spotify Android Move

It has been widely reported that Spotify, has demonstrated an offline version of the service running on a Google Android mobile phone at Google's I/O developer event and it appears that just like the desktop client it’s a potential winner. It even has "offline mode" that uses cache to store a playlist and turns the phone into an offline MP3 player with Spotify as its client.



Spotify is working on several mobile versions but the big question is wheter Apple will allow or block what is a clear threat to iTunes. Here is an earlier TechDigest video 'showing' Spotify on a iPhone.

Spotify Continue to Make Smart Moves

We continue to be impressed by the clear thinking of the people who run what is fast becoming the music model streaming site. Spotify continues to learn from others and navigate what are challenging waters where many have floundered before them.

They now allow unsigned musicians to upload their music onto the service. So are they now going to get flooded with pirate tracks and illegal music and wash their hands and claim a safe harbour like many today across the media market or take proactive action to control what is uploaded? Spotify has signed a deal with Ditto Music, where acts can upload their music and are now be able to type their band's name into Spotify and see their tracks. Ditto Music charges a £2 per month and has made a name for itself bringing unsigned acts into the charts through digital distribution. Like regular acts, unsigned bands will be entitled to royalties when their tracks are played . US band Finch, will be one of the first available on Spotify through the new deal with Ditto Music. By introducing a filter and charged service they have taken a wise step to avoid pirate uploads.

Spotify has also gained official approval by the UK’s Performing Rights Society (PRS) which clearly places them on the right side of the industry and avoids the disputes that others have found others such as YouTube embroiled in.

Spotify Plans and US Entry?

Our favourite music streaming service, Spotify, which has more than a million UK users and provides a legal alternative to unlicensed file-sharing services and enables artists, record labels and music publishers to receive royalties, has announced it plans. They are working on an iPhone application, but also wants to make the service available on other handsets. The mobile service will be only available to paying subscribers.

They also aim to improve sound quality, enabling new releases before they hit shops, more social networking features, exclusive tracks, behind-the-scenes material from big-name artists and merchandising such as T-shirts, concert tickets and vinyl will be sold to fans as they are listening to their favourite band. Spotify are working on a deal with Last.fm to provide song recommendations and making it easier for fans to find acts they like.

Spotify is currently available in the UK, Sweden, Norway, Finland, France and Spain, but now plan to take the service to the US.

Spotify Continues to Grow Announcing Libspotify

We have been strong supporters of Spotify, which lets us play music on-demand and share playlists for free if you don’t mind the 20 second advert every 30 minutes. It makes more sense to listen to what you want when you want where you want rather than buying loads of tracks most of which sit dormant on the drive like the CDs on a shelf. Its somewhat strange to be ahead of the curve in the UK and Europe but Spotify certainly is one step ahead of the game and clearly states where music is going. All four major labels and indie consortiums The Orchard, Merlin and CD Baby already allow Spotify to play their music in an increasing number of European countries.

We reported on the recent move to team up with 7Digital to offer purchasing of downloads.

However its getting a whole lot better with the news on the launch of libspotify which gives developers the ability to build services on its platform using an API and port Spotify to a variety of different devices . We could be talking Spotify on mobile phones, XBoxes, PlayStations, TVs, networked audio players and any other place developers want to put it.