A while ago I put together my case for how Spotify could revitalise the music industry. So far the stats supporting that are gradually growing, but it’s yet to prove as spectacular as I anticipated, something that Daniel Ek the co-founder of Spotify has put down to the current economic climate.
At the time of writing I noted how the service was looking to develop a mobile version of the program for use on platforms such as smartfones and primarily the iPhone, something that is yet to develop since, and something that I believe has held the service back.
Now I’m gonna jump across the pond. The USA, where an equivalent service called Pandora is making some serious waves in the way music is purchased. Pandora is a similar application to Spotify, an on demand internet streaming “radio” service where the majority of it’s revenue is generated by advertising. However, it has also started making credible income via affiliate links to buy the tracks via iTunes and Amazon.com.
Spotify has also started doing this, however, they link to the 7digital service, far from the market leader in music downloads. They also fail to provide click-able links next to the track listing, instead they require the user to right click on the track and follow the path to “download”, hardly the most user friendly process. So far we have 2 ways to improve Spotify’s affiliate service, firstly involve the market leaders iTunes and Amazon, and secondly make it fool proof.
Finally the third and most important point…make it mobile. Mr Ek confirmed at the Great Escape music conference in Brighton that the mobile aspect of Spotify is something they are looking to roll out soon, however, we heard that a few months back as well. The reason it will be so important for the service is again evident in the case of Pandora. Pandora recently reported that 20% of its affiliate sales came from users going through the Pandora iPhone application to the iTunes iPhone application to purchase their songs. If that doesn’t seem that significant a figure, just have a little review of the hypotheticals the Washington Post are throwing around in regard to how much potential revenue Pandora may be generating from continued growth of the service in comparison to the whole music industry. All this from an app on a phone which has realistically only experienced a limited uptake in terms of the complete mobile phone market.
Mr Ek has also expressed a desire to charge for the mobile applications of Spotify, I can understand why, it’ll be a popular app, why not make some cash from the initial download. It will be interesting to see if the key to maximising revenue from the service is from getting the highest uptake and going via affiliate sales like Pandora, or charging for the service and hoping everything else will fall into place from what is likely to be a smaller user base.
However, I would advise keeping the option of a monthly fee for ad free mobile music streaming. If I was going to pick up on one complaint that seems to be common from Pandora’s users, it has been the lack of an option to pay a subscription fee to get rid of the ad’s on both the mobile and standard version of the service.
So if Spotify want to go about overcoming the current economic climate the key appears to be getting the service mobile asap and in the simplest guise.
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