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.”
A report from business analysis firm Ovum says they think UK based Internet Service Providers (ISP’s) could bundle a silver bullet with their broadband contracts by adding a digital music service to their offerings. They argue that this would increase customer loyalty (Ovum call it reducing consumer churn), generate additional revenue per customer, reduce online music piracy and increase music industry revenue. They estimate (and they don’t say how they arrived at the figure) that direct revenues from selling music-inclusive deals could be around £103 million by 2013, representing 41% of 2009’s market.
Commenting on the report earlier this week the BPI’s Geoff Taylor said “It’s increasingly clear that it isn’t smart to be a ‘dumb pipe’. This report shows that the revenue potential of digital music services alone makes sound economic sense for ISPs.”
Fair enough. But take note that Universal Music Group sponsored the report, the same UMG that are desperately worried about the collapse of their revenues, and the same UMG that are invested in Spotify, a music service that could very easily sell premium subscriptions bundled with an ISP package. This is by all indications a great idea, and would go a long way to helping the ISP community appease big music – who are accusing it if not of complicity then at least negligence in the article of stopping access to copyright infringing sites and torrent trackers like the infamous Pirate Bay – but an awareness of possible bias might encourage conservatism when looking at Ovum’s estimated numbers. There are a lot of solutions vying for the fast growing digital music dollar, it’s a market in which we’re currently diversity and innovation, and a big move like the one the BPI are advocating could seal the future of music online.
Not to be outdone by streaming competitors Spotify, who are rumoured to have gained a new funding partner (and consultant) in the form of Napster/Facebook founder Sean Parker, MOG have announced second round funding of $10,000,000 dollars, which they plan to use to take the platform into Europe, as well as funding Stateside expansion. As things stand, the two competitors are entrenching in their home territories, but the date of their confrontation on one side of the Atlantic must be drawing closer, even though no dates have been mentioned by either team. MOG’s monthly subscription is less than half the price of Spotify’s, but Spotify has major label backing, plus a vocal and passionate fanbase. Pandora are keeping their heads down, and quietly getting on with dominating the internet-radio and car dashboard scene, but the clash between these two will likely define the major player in on-demand streaming. The future of this type of music consumption is far from gilt-edged, however, as Spotify are still struggling to up their paid (£9.99 a month) subscription rates to supplement their ad-funded service, while MOG are operating at about a 17% conversion rate from their free trial to a $5 a month subscription. Whether either of these approaches will be successful enough to fund them in the long term remains to be seen, but given the high level of uptake, there is certainly a market for on-demand. Who gets to service it is currently being decided.
The absolute best/worst of stadium and dad rock for you this week. It’s probably best to listen to this over your headphones, unless your co-workers have a good sense of humour, or are fans of falsetto, hair dye, facepaint and massive, massive guitars. The worst thing about it is that it’s brilliant:
Ad-supported music and digital content service Guvera has set the date for going live in the States as 30th March. The service, named for the bloody-handed revolutionary icon Ernesto ‘Che’ Guevara [wiki here, tl;dr we should all strive for personal fulfilment and be nice communists, but sometimes it's ok to shoot people in the head if they betray you] – aims to instigate a ‘revolution’ in the media industry by getting advertisers to pay for content delivered to consumers, who have chosen the advertiser whose branding they find least offensive/interruptive. This may not be quite the paradigm shift that they seem to think, but their beta service has been up and running for a couple of months in Australia now, and has been successful enough for them to roll out the full scale launch. They have deals in place with Universal Music Group, EMI Music and IODA offering consumers ‘free but paid for’ legal downloads from their full music libraries, but concerns abound as to whether they’ll be able to pay for them in the long term and on the grand scale that they hope for. Another streaming service in the States means that Spotify, bogged down making their platform profitable in Europe, will find the marketplace that bit more crowded if and when they finally get their stall laid out in the US, but they will have had the headstart in refining the user experience and gathering advertisers to their service. There is a future for online ad-supported music streaming, the appetite is strongly apparent, but it will be a hotly contested race to become the dominant provider, and Guvera have yet to prove themselves against the competition.
MOG has provided a quick intro to their new music streaming service that will be launching very soon in the USA.
There currently is a lot happening in the music space online, with Spotify delaying their launch in the USA, and Myspace Music possibly moving over to a subscription model. MOG music streaming service only costs $5 per month, which means it could be a great little option away from these other major players.
Search looks to be extremely fast, with intelligent auto-complete. Adding songs from various places in the service is simple (compare to MySpace Music, which is still cumbersome after a year). And users can make the playlists private or public.
Billboard has always been a leader in breaking news and inside sources, however they seem to have lost their way a bit online. Thus, Billboard is now looking to grow its service even further and expand into other areas. Today, Billboard is launching a new service called Billboard Live. Having the chance to stream festivals across the ocean is nice, but Billboard offers us a customized version of streaming by letting us choose what we want their cameras to focus on.
According to Associated Press, not only does this new website offer music lovers FREE streaming of selected concerts, but there are options galore! Users get to choose from five different camera angles in which they would like to view the show.
Two more factors that could possibly make this the #1 concert-streaming site? First off, the ADD generation of social platforms have the option to also use Twitter or Facebook without having to leave the website. Secondly, (and of course) it’ll be available on for iPhone.
Deezer which is the French version of We7 has released a premium offering coupled with a few new product releases. Techcrunch UK reports:
Basically, the Deezer website, where users can listen to streaming music and create playlists, will remain free of charge while users who would like better sound quality (up to 320 kb/s) and no more advertisements can opt to pay €4.99 per month for Deezer HQ. The Premium offering (€9.99 / month) is the most interesting though, since it gives users the opportunity to download a full-fledged Adobe AIR desktop application and lets them gain access to their accounts through a wide range of mobile devices, including the iPhone, iPod Touch and multiple Android-run and Blackberry devices.
Deezer also commissioned a study that showed more than 80% of its user base was keen on getting mobile access, while 40% was interested in better sound quality. The combination of in-browser, desktop client and listening to music on the go via mobile, has now made Deezer a great Spotify competitor. This is the type of convergence I keep wishing every online music service would offer.
YouTube is starting to really push into the live video streaming market, despite saying that it wasnt a viable market for a long time. The Google-owned video website has streamed the Outside Lands concert and an Obama press conference in recent months, but now it’s going to stream the Rose Bowl concert of one of the world’s most popular bands, U2.
The concert will begin at 8:30 PM PT on Sunday the 25th of October and it will be available in 16 countries. The live feed will be available on the U2 Official Channel, and feature a live Twitter feed of chatter about the concert.
The world’s largest video website, in a conference call earlier today, explained that it is seeking to experiment in live video. Clearly, YouTube sees some type of potential in this emerging market, as live video players Ustream, Justin.tv, and Livestream have started to prove the viability of this market.
[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.
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