Wednesday, 8 July 2009

Spotify. The next big thing?

is somewhat old news. It launched silently launched in the UK back in October last year and received a small amount of press coverage at the beginning of this year. Spotify provides a free streaming music service over the internet, it's like iTunes but you can only listen when you're online. The other key difference from iTunes is that you can listen to full tracks and albums free of charge.

At launch, Spotify was invite only so that they could control their growth rate. I recieved an invite from Morcs back in January and after signing up I quickly dismissed the concept when I discovered hat I'd have to install some client software on my PC to use it. "You're going to stream me music, and you want me to install something? Haven't you heard of software as a service?" I cried in an indignant technological rage. A few months later, when there was a lot of noise amongst my friends and colleagues about Spotify I bit the bullet and installed the client. I've been using it for about 6 weeks now, and I'm so impressed with it that I've become something of a Spotify bore/zealot.

Here's the key reasons that I'm so impressed:
  • It's a free, legal internet music service which has the support of the record industry - The record industry have been absolute dullards when it comes to harnessing the internet as a platform for retail and distribution (a topic worth a whole post in the future I think). Despite the idiocy of the music industry and their currently small user base, Spotify already have buy in from Sony, Universal, EMI and Warner and have commited to provide their entire catalogues for your listening pleasure. They've also recently signed Record Union, who are a distributer for independent artists, so hopefully this will bring even more interest to the music available. Currently, they're adding around 150k tracks a week - I've seen the fruits of this as searches for artists which I like initially returned zero hits and are now returning entire discographies (6.9 hours of Hybrid anyone?).
  • Excellent audio quality and user experience - Spotify uses the Ogg q5 codec which is roughly 160kbps and sounds great. Search results are returned lightning fast and even though they're streamed to you, tracks start playing almost instantly (it turns out that you need to install a client because P2P techniques are used, which I'm sure helps with the instant play feature). Spotify even works reliably over a 3G connection.
  • Playlists, sharing and collaboration - You can create your own playlists quickly by dragging and dropping albums and tracks. Brilliantly, playlists are tied to your login not your computer so they are accesible wherever you login from. Tracks, albums and playlists can be shared with friends via simple HTTP links, and playlists can be made public so others can add to your existing song selections.
  • Spotify radio - Only want to listen to 80s disco? No problem, With buttons to select time periods and music types, you can let Spotify play you tracks randomly based on your choices.
So what's the catch then? Well, crucially you can currently only use Spotify when you're both at your computer and online. In addition, the free service is paid for by adverts, so every 20 minutes or so, a 30 seconds audio advert get played inbetween tracks. At the moment these are invariably hilariously lo-fi and I haven't found them irritating, although with a limited selection of ads at the moment they can get pretty repetitive. I'm finding the adverts are a small sacrifice in exchange for unlimited, high quality, legal music online. Further, this catch actually leads onto another great Spotify strength:

  • Smart premium options - currently there are 2 premium options available in the UK, a monthly subscriptions (£9.99) or a day pass (£0.99). Both bring the benefit of no advertising, and the monthly premium option also brings a higher quality stream (Ogg q9 which is roughly 320kbps), unlimited use of Spotify while abroad and additional invites so you can share Spotify with your friends. The day pass is particularly clever as it enables you to put together a party playlist which you can then stream advert-free all day for less than the price of a loaf of bread. For more nerdy types, the premium subscription also enables you to use the open source DeSpotify client if you wish (The free service blocks DeSpotify, and rightly so).

Looking forwards, Spotify are certainly one to watch. I firmly believe they have the potential to revolutionise how we buy, store and listen to music. So what can we expect from them in the future? Well, given that they've just added their first audiobook, perhaps they will branch out into delivering other types of media such as TV shows or movies. Mobile clients have already been confirmed with iPhone and Android apps in development, and their jobs section suggests they're also working on a client for Nokia's S60 handsets. In the video below, you'll see that they're demoing a syncronisation feature to enable you to play tracks on your mobile even when you're offline - you can bet that this will only be available to paying subscribers, but the prospect of unlimited music both at home and on the move for just a little more than a single album from iTunes is highly compelling.

When the mobile clients launch, I can forsee Spotify partnering with the handset manufacturers or mobile networks to bundle the client onto new phones, or include a premium subscription within the price of a data bundle.

I also think there's an opportunity for an additional charge on top of the premium subscription which could be used to give you access to pre-release music. The idea would be that as soon as you heard the new Dizzee Rascal song on the radio, the label would have made it available to Spotify and you could go and listen to it online before it's release. This would hopefully cut down on the piracy of pre-release music by enabling people to get their fill of brand new tunes legally, but without diminishing their appetite to buy them on release.

Finally, my pipe dream is to see them enable the synchronisation feature for the desktop client and then intergrate the client directly with the iPod. Of course desktop synchronisation is fraught with pitfalls because of the record labels hang ups about digital ownership. Individual files for synchronisation would need to be DRMed and achieve this with the iPod, Spotify would probably need to licence Apple's FairPlay DRM technology. I actually doubt Apple would ever allow this to happen, but it seems to me to be the best way to make Spotify mass-market - there are a lot of people who'd need some serious convincing that they should use their mobile handset instead of their iPod to listen to music on the move.

It's going to be very interesting to see if Spotify can overcome the hurdles in front of them and emerge as the success that I think they deserve to be. Can they scale their service? Can they make the model profitable and attract the elusive 50 quid man? Can they win users from iTunes and Amazon? Time will tell, and I for one will be watching closely.


Deejster said...

Welcome to the party! :P

Dean Upton
Check this out - Spotify - it's excellent.

*Tons* of free, searchable music, streamed to your computer. It's an Application like iTunes, but has FULL versions of the songs instead of clips, and without all the iTunes rubbish. VERY fast search, and a high quality audio stream.

Just install, search for your favourite song, and enjoy. The artist gets paid, and if you don't like the Ads you can pay to remove them.

26 April at 23:56
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Dean Upton
Spotify is simply the best thing to happen to music since 1982. Absolutely the future. (Download spotify at )

06 June at 11:23
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Anonymous said...

Fascinating. I'd missed the fact that they use Ogg. I think it will be interesting to see whether they do manage to get an iPhone app into the store - although it's true that Last.FM has one, Apple might decide that this is a little too challenging to their business model around iTunes.

I'm a big fan too. I haven't used it much... I still prefer to own my music, for some reason, but I see myself being weaned off that slowly. One to watch for sure.