Spotify currently boasts 7 million users, all of them in Europe. Not bad for a product that was only released in October 2008 – this figure does only relate to the number of people on their free service, but their £10 a month premium service is also gaining traffic at a remarkable rate; they had “more than 250,000″ premium users on 23rd Jan ‘10, and are now boasting 320,000 paid subscribers, (as of the 17th March ‘10), and increase of 28% in under 3 months, and an extra £8,400,000 a year into the coffers. Spotify still needs to up their percentages though, according to UMG’s [Universal Music Group's] SVP [Senior Vice President] Rob Wells [and they would know, because they've taken shares in the business], they need to have around 10%-12% of their users as premium subscribers [they're currently at about 5%] to have a viable business in the long term. This might change as more and more advertising dollars go online though – as both Spotify’s CEO Daniel Ek and industry analysts Kantar Media are saying:
[Table via TechCrunch's article on the same]. Other interesting facts are that 15% to 18% of the Swedish population use Spotify – and the Swedish music industry’s revenues are up, and that Spotify’s p2p based system is actually using more interwebs than the whole nation of Sweden. There are rumours of a Spotify set-top box and/or home stereo system, a bit like that Sonos thing, but running off your Spotify premium account.
Other signs of Spotify’s ambition came from comments about Apple – Ek described them as having a freemium model like Spotify’s, as everyone (in his opinion) downloads a lot of free stuff and then buys the stuff they really like on iTunes:
“The vast majority of people’s libraries are free from Limewire or trading through friends. And then there’s a small portion of tracks that they’ve bought… I really believe that if music could be legally available on any device that you wanted… I think the music industry would be radically bigger than what it is today”.
He also thinks that Apple will change the way that iTunes works, to allow remote access from anywhere to your iTunes music account on a cloud: “People want to share, to access independently. I think it makes a lot of sense for them to do something in that area.”
iTunes is heading for it’s 10 billionth track sold, and has launched a promotion to encourage people to get their credit cards out. If you’re the purchaser of the 10,000,000,000th track, then that nice Mr. Jobs will post you a gift card worth $10,000 to spend in the iTunes store. Interestingly, you don’t actually need to buy any music to be eligible to win the ten thousand dollar prize; you can get a free sweepstake entry by filling out a form here, which should count the same as a song purchase if your entry gets processed immediately after the 99,999,999,999th track is sold. You can keep an eye on the track sales ticker on the iTunes homepage, and put in up to 25 free entries a day, or just log in and buy a huge pile of songs near the time. I’ll be entering, but unfortunately they don’t sell hardware on the iTunes store, so my iPad will have to wait until Christmas. Oh, and if you happened to buy from one of the artists that RouteNote has distributed music to iTunes for, then we’d be really pleased.
Classics, Nanos, Shuffles, Touches – Apple have made so many different shapes of iPod that you need adaptors for practically every accessory you can buy. Apple likes things to look sleek and neat, so having fiddly bits of plastic to swap over for each of the many iPods they would like you to buy (you couldn’t possibly take your 60GB classic jogging with you!) is not acceptable, and so for all the neat freaks and must-have-it Apple fans, they’re developing a universal dock to accommodate all different shapes and sizes. They’ve filed a patent for, as they phrase it:
A dock for supporting a plurality of differently-shaped electronic devices, the dock comprising: a housing; a connector coupled to the housing; and a compressible support layer positioned at least partially about the connector, wherein at least a portion of the compressible support layer compresses to the shape of at least a portion of an electronic device that is attached to the connector.
featuring:
A method for supporting a plurality of differently-shaped electronic devices in a dock that includes a compressible support layer positioned at least partially about a connector, the method comprising:attaching an electronic device to the connector of the dock; compressing at least a first portion of the compressible support layer with at least a portion of the bottom of the electronic device when the electronic device is attached to the connector; and supporting at least a portion of a side of the electronic device with at least a second portion of the compressible support layer when the electronic device is attached to the connector.
Which translates to a standard iPod connector in the middle of a squashy or springy surround, which you compress part of by pushing your iPod into, the uncompressed part supporting the sides of the device, perhaps a bit like one of those pin-art pads that were fashionable around when the Lawnmower Man came out. I’m a little unclear as to why you’d need one, my iPod sits on my hat on top of my computer, but then I use a PC and have been known to eat cereal at my desk – hardly the action of a stylish Mac user. Perhaps it makes your music sound better.
Apple (NSDQ: AAPL) filed it’s latest 10K with the SEC last week (if you click that link, put the kettle on and make yourself a cup of tea before the file opens, you’re in for a long read, tl;dr Page 42 for a summary) and their figures are still awe-inspiring: more than 54 million iPods sold this year, which is actually a drop of 500,000 on last year, probably caused by people choosing to buy an iPhone instead, seeing as Apple sold over 20 million of them! (Something I was surprised PaidContent’s little precis of the report failed to take into account). This is good news for RouteNote’s uploaders, as it means more potential iTunes customers, and the direct growth of iTunes’ sales is even better news; up 20% year on year, even more reason to get your music on iTunes with RouteNote.
Previously here on RouteNote we wrote about how one of our newest partners Spotify is launching very soon in the US market. However, today Spotify has new news, they have sent in their iPhone application for Apple to review. It is not guaranteed that the application will be accepted into the iTunes App store, mainly because it seems as those Spotify is a direct competitor to iTunes and their application may slow music sales in the iTunes store. Anyways, here is a preview of the new application.
A lot of people get in touch with us to ask how many digital stores we distribute music to, and what proportion of the digital music market they represent. We also hear comments on the relatively small number of people we deal with in comparison to the huge lists of partners at some of our competitors, e.g. CDbaby,Emubands, IODA…(without mentioning the duplication in the last two).
The simple truth is that while a long list of digital music stores might look good, beyond the top 3 or 4 retailers it makes very little difference to overall sales how many your music’s in. It’s fairly common knowledge that iTunes is the biggest player in the market, but the scale of their dominance is pretty staggering. Neilsen (the ratings and market reporting firm) reports total US music sales of 1,513 million units in 2008, with 1070 million of those sales being digital downloads. That’s a billion digital music downloads across the entire US.
In 2008, across all territories, iTunes sold more than Two Billion tracks.
Apple iTunes Store Music Sales
Date
Tracks Sold (Millions)
01/08/2004
100
16/12/2004
200
02/03/2005
300
10/05/2005
400
18/07/2005
500
10/01/2006
850
23/02/2006
1,000
12/09/2006
1,500
10/01/2007
2,000
09/04/2007
2,500
31/07/2007
3,000
15/01/2008
4,000
19/06/2008
5,000
06/01/2009
6,000
Excuse the horrid old excel graph, I’m still running Office ‘03…
It’s difficult to get a believable estimate for the size of the global digital music market, but given that the USA is the biggest single economy by a long way (the whole of the EU only just beats it in the CIA factbook at $14.98 trillion to $14.58 trillion), you begin to get a picture of how much of a monopoly iTunes has. Their competitors are of a different order: Amazon weighed in at 27 million digital tracks sold in the first six months of 2008, and the CEO of eMusic (David Pakman) estimated that Amazon have got about 4%-5% of the US music market, which going from Neilsen’s estimates puts them at about 48,150,000 tracks annually. Pakman also claims an approx. 10%-15% market share for eMusic, with 7 million downloads sold monthly (7*12 = 84).
By browsing eMusic’s sales milestone press releases, you can plot a rough course for their sales:
eMusic Digital Music Sales
Date
Tracks Sold (Millions)
01/09/2004
0
01/12/2004
3
01/12/2006
100
25/09/2007
160
14/04/2008
200
20/11/2008
250
I’ll spare you another ugly graph. eMusic has sold 250 million tracks since it’s relaunch in 2004, and Amazon’s only been going for about a year now, 300 million tracks let’s say, which pales beside iTunes’ 6 billion total sales.
One can argue with the estimates, but the main thrust of my argument is hopefully becoming clear. A conservative 15% market share between Amazon and eMusic, along with iTunes’ >80% doesn’t leave more than 5% for any other players in the USA: with just those three selling your music for you online, you’ve got 95% of the market covered. It’s not that the remaining 5% isn’t worth catering to, but the law of diminishing returns kicks in, and customers in the last few percentiles get harder and harder to chase down, especially given the plethora of blossoming and failing little music shops that appear and dissappear. We concentrate our efforts on the vendors that matter.
P.S.
The controversial bulk of music discovery and consumption in the electronic wilderness, outside the paid-for enclosure, is happening on torrent sites like the embattled Pirate Bay, and the more respectable Limewire and Mininova, and promoting RouteNote artists on these channels is something we’re looking into. Ubiquitous innovator Trent Reznor or NIN positively encourages people to download his music from P2P networks, in order to drive sales of his ‘premium’ paid for content.
Have you ever wondered how much iTunes account for digital sales online? One of our competitors CD Baby has published their 2008 results which shows that iTunes currently accounts for over 82% of their total digital revenues. This makes me wonder why artists are really keen to get their music in as many places as possible, instead of just focusing on the top retail points and building a base around them and their users.
The Ocarina from Smule synthesizes sound in real-time based on your “wind input” (fancy talk for you blow on it), tilt, and finger placement over four graphic “holes” overlaid on the multi-touch pad. Unlike some iPhone audio apps, the sound is not pre-compiled but is generated by the individual performer. As a result, “it allows an iPhone user to explore and master the musical sounds of an entirely iPhone-native version of an ancient flute-like instrument.” Its available for $.99 at Apple’s AppStore. Here’s a demo and be sure to check out “Starway To Heaven” after the jump. You can purchase the Ocarina Application on iTunes here.
[Table via TechCrunch's article on the same]. Other interesting facts are that 15% to 18% of the Swedish population use Spotify – and the Swedish music industry’s revenues are up, and that Spotify’s p2p based system is actually using more interwebs than the whole nation of Sweden. There are rumours of a Spotify set-top box and/or home stereo system, a bit like that Sonos thing, but running off your Spotify premium account.
Apple (
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