- 26 Feb 09, 16:17 GMT
In the last couple of days, I've talked to three people about the future of music - the head of digital at the world's biggest music label, a very wired music consumer, and an executive at a fast growing new streaming service. I asked them all the same thing - will the arrival of that new service Spotify change the music industry?
Unsurprisingly, Roberta Maley from Spotify was convinced that this was a game-changer, not just another me-too service. She did give me some new figures on its growth - 250,000 UK subscribers, 800,000 worldwide, with Sweden and Spain the biggest markets.
But she was less forthcoming about two vital issues for the future of the company - the split between those who listen to the ad-supported service for free and those who pay for an ad-free service, and the possibility that users could listen on the move. Spotify is keen to have a "mixed economy" with new arrivals drawn in by the free service then migrating to the £9.99 per month subscription deal to avoid the ads.
Right now you only hear one thirty second advert every twenty minutes, as compared with 12 to 14 minutes per hour on commercial radio, but Spotify plans an increase to two and a half minutes per hour soon. The trick will be to have enough advertising to make some money and convince existing users it is worth upgrading to the premium service - but not enough to put off those trying out Spotify for the first time. Roberta wouldn't confirm the story that Spotify is working on an iPhone application - I understand some work has been done, but mobile music is still some way off.
Rob Wells is Senior Vice President, Digital, for Universal International - in other words he is in charge of making sure the world's biggest music business finds a way to prosper in a digital age which has so far been pretty disastrous for his industry. When we spoke over a Skype connection to Los Angeles, he seemed pretty enthusiastic about Spotify - but keen to put it in the context of a whole range of new services, such as Nokia's Comes With Music and Sky's upcoming broadband service. He says consumers are changing, "away from the per-transaction model, where they buy a body of work, and into a subscription model where they pay for access to all music. That subscription could be bundled into the cost of a mobile phone contract or a broadband connection."
He was obviously keener that Spotify users upgrade to the premium service - the labels earn a bigger share of the revenue that way - but was also hoping that a free service would wean music fans off the file-sharing habit. "The consumers are already familiar with not paying for their music when they download it off the internet. So we have to do more and more interesting deals to make them listen to music in a legitimate format where we earn revenue."
But it is Dan Moon whose views really matter. He is the very model of a modern music fan. He has put all his CDs away, and has about 30Gb of music stored on his laptop, which he streams over his wireless network to an amplifier and then to a pair of big speakers in his attic flat in London's Maida Vale. But he has also started using Spotify, mainly to explore some new music rather than listen to stuff he already knows.
Dan says he used to go to file-sharing sites when he was a teenager - but now prefers to buy his music in the form of downloads from iTunes to be sure of a quality product. He's not entirely sure whether Spotify will kill file-sharing: "If I were a heavy file-sharer, there would be a pull on the usability front. Spotify looks nice, quite pretty, while file-sharing is a bit laborious." But he says it's difficult to beat the likes of Limewire on one front: "There isn't a better model than free - with file-sharing there's no adverts either." And the fact that he can't take his Spotify music with him is another downside: "When I'm on the tube there's no Spotify. I'm quite tethered to my laptop. It's not portable."
Spotify won't change the music industry on its own - and still has to prove it can attract both a big crowd and a lot more advertisers. But, along with a host of other new services, its arrival does seem to herald a change in the way we view music. Rob Wells of Universal thinks the fact that his industry has cut deals with the likes of Spotify shows that it has turned a corner: "These new deals show that the industry is maturing, the market is maturing and consumers are willing to pay for music."
Maybe. But let's wait and see what happens with the new U2 album, "No Line on the Horizon", so important to the revenues of Universal. You can stream it on Spotify, you can pay for a CD or download - or you can go and get it from a file-sharing site for nothing. The choices music fans make will show whether an ailing industry really has found a profitable way forward.
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