It’s been almost two years since Spotify launched in Europe – why in the hell isn’t it out in the US yet?
Yeah, yeah, the question is rhetorical because what other reason is there for blocking the domestic release of what Lifehacker calls “the best desktop music player we’ve ever used?”
Raise your hand if you guessed right – The reason why Spotify isn’t out yet is because of our old bumbling nemesis, the major record labels!
Before we dig in, I want to reiterate why Spotify is so compelling a product. The excitement of what Spotify offers isn’t so much the actual product it peddles. There are already a handful of music services that offer unlimited music playback for a monthly fee. Its main draw is that it employs a ad-supported freemium model where anyone can listen to music without charge initially. If you like the service you can pay for other compelling perks such as mobile device playback or higher quality playback.
I think the music monetization problem is twofold. The first is finding a means in delivering music to people that isn’t cumbersome and cost-prohibitive to the consumer. This is a problem that is more or less solved by Spotify. It’s easy to use, delivers accurate results, is the right price, and even incorporates innovative features like playlist collaboration/browser based sharing. The service itself appears to be a great product, worthy of people’s time. It’s not a trivial accomplishment, as most other “legitimate” music services have failed miserably at this throughout the years, including the vaunted iTunes.
What about the cost-prohibitive part? Well, according to Billboard, the main hang up for Spotify in the US isn’t due to technical reasons, rather, it’s because some labels have “expressed displeasure” with the business model Spotify employs. Are you fucking kidding me? You’re displeased at a business model which offers a compelling product to consumers with the potential to monetize the population of people who like music and are connected to the internet? (Fun fact: That is a metric FUCKTON of people.) Sure, it may not be as tempura batter tasty as selling 10 million Backstreet Boys CDs in 1999 at $15 a pop, but when your current business model is pinned on selling 1/100 that number of CDs, Spotify should look like a shiny new money printer.
To clarify, the labels have no problem with the product that these streaming services put out. Their major hang up is in how it’s sold to the customer. Really? You’ve got a wonderful product that people would die to pay for, yet you can’t keep it in your pants long enough to convince people that it’s worth it? It’s the equivalent of the most socially awkward kid at your high school landing a date with the prom queen and is inexplicably about to get to third base, but stops her because he wants her to pay for her half of dinner first.
For an example of their idea of a solution, look at rdio. rdio has some great social features and the same all you can listen promise that Spotify does, except with one major pitfall – there’s only a 3 day free trial.
Three days.
What a joke. Think about how likely you would have stayed with Netflix or Facebook or Twitter if they only gave you 3 days to try out the service before they started charging you. I’m guessing “not very.” With the way many peoples’ schedules are, you’re lucky if you get them to fill out a profile within 3 days.
How is allowing ad-supported “free” streaming on a service any different from sticking an ad on youtube before any VEVO video? It isn’t. Yet VEVO is a service ostensibly supported by the major labels because they’re the ones who thought of it. In an era where people consider music free, you have to start there and demonstrate added value in order to get them to pay.
The second problem of selling digital music is educating people that such a service exists and getting them to experience it so they can see how invaluable it is to their daily lives. Unlimited music is a wondrous product. It’s also something that a lot of people don’t wholly comprehend until they get a chance to experience it for themselves. Even for a generation that has been weaned on “free” unlimited file sharing, the value of providing a legitimate, good user experience can’t be underestimated. It’s a pain in the ass to “steal” music, but most people would rather wade through the sewage it would take to pick a song from the poop that is p2p than pay an onerous $1.29 for each track. However, give them a service that makes it simple to find whatever they’re looking for, whenever they want, and you’ve got a new convert. Once you’ve established how indispensable it is, it should be an easy sell to get people to pay for mobile/offline/high quality options. If there were a service that offered me the selection and sound quality of a high end bittorent site with the legitimacy and ease of a legit service, I guarantee I would right there with my $10, $15, even $20 each and every month.
Now, this music service Valhalla doesn’t necessarily have to be Spotify, but as of now they’d have the best chance of pulling it off in the US. It’s already proved itself in Europe with establishing a userbase and business model. People are clamoring for it in the US, even coming up with convoluted schemes to get the iPhone app working out of Europe.
So, major record labels, just license your music at reasonable rates to let Spotify come to the US already. You’re already a decade behind, stop delaying the inevitable and look towards the goddamn future already. Worst case scenario you let a service have discounted licensing rates for a little bit. You won’t have lost any more money out of pocket than you would have by sitting around trying to peddle CDs with your thumb in your ass.
But best case? Imagine selling one $10 CD a month to everyone who likes music. Think about how many people that is. Imagine how much money that would bring in to your coffers.
I’ll wait while your business development team does the cost-benefit analysis on that one.
