Spotify – A Business Perspective

A few days ago I told you what Spotify is, and I also told you the reasons I like it so much. I can bet that I am not the only one who likes it, and even though many people will probably just use their free service, there must be a reason they are still in business. The Copyright infringement issues are very openly addressed in Spotify’s commercials. They clearly state that the artists and copyright holders are paid in order for us to have the privilege to listen to their music, as “without them there would be no music to enjoy” (or something like that).

music moneySo, where do they get the money to pay the bills? The site, developed in Sweden by Daniel Ek and Martin Lorentzon in 2006 and launched in the UK in October 2008, is financed by audio commercials followed by call to action links included in their software. Spotify users can avoid the commercials by paying for either an “Unlimited” subscription or a “Premium” one. The “Unlimited” membership gives users the possibility of listening to unlimited, uninterrupted music on their personal computer for just £4.99 per month. The “Premium” subscription, however, seems like a more interesting option and, to me, to offer more value for money. For £9.99 per month you get unlimited access to music on all your favourite devices and the possibility to download all your favourite songs “for when you don’t have a connection”.

Lets crunch some number, shall we? According to a market research conducted by KeyNote back in 2010 the number of downloads in the recording market has been increasing continuously since 2005, with a whooping 557.9% raise until 2010. KeyNote estimated that the downloading market will increase from 14.1% of the total sales in 2008 to over 65% in 2012 and 87% by 2014, while the physical market will only be worth £350m in 2014. I don’t know about you, but it seems like a pretty profitable business to me that still has room to grow.

rdio vs spotifyBut lets see exactly if value is offered for the money where their music catalogue is concerned. The Bulletin mentioned back in 2011 that the Spotify music catalogue is formed by over 15 million songs and it has probably accumulated more songs between then and now. Andy Baio has complied a comparison for Wired based on the 5700 songs that have been in the Billboard Top 100 between 1955 and 2011. He found that out of the 5,700 songs in the top 100, 5,026 (88 percent) were available on both Spotify and Rdio. An additional 81 (1.4 percent) were only on Spotify, and 100 (1.7 percent) only available on Rdio. If we limit it to only the 570 top-10 singles, 518 songs (over 90 percent) were available on both Spotify and Rdio. Both services stream virtually every song every to appear on the Billboard charts, but they don’t overlap perfectly. Each has secured different licenses with record labels, giving each exclusive access to some songs and artists.

I don’t know about you, but I’m very satisfied with their licensed music collection, but you can always add your local files and have your most beloved music a click away.

Thank you for tuning in again. Until next time, have a delicious day!

Love,

Maddie.

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What is Spotify?

SpotifyTo start this topic on a rather euphemistic note, Spotify was regarded by John Dvorak from PC Magazine as “The online streaming service [that] seems to have solved the music industry’s problems” and “the culmination of 15 to 20 years of user experimentation”.

But what is Spotify? According to Anne Shelley, “Spotify is an audio player with an experience more like iTunes than its streaming music peers.” It uses a downloadable platform for both Windows OS and iOS with which you can search for artists, songs, albums, etc. and create playlists to share with your friends over Twitter or Facebook. If you hear a song or album you like, you also have the option to purchase it from one of Spotify’s online music store partners.

spotibook-560x373However, before you can do all that, you’ll need to create an account. You can either use your Facebook account for the ease of connection between the two accounts, or simply create an account with Spotify and then connect it to your Facebook account, provided of course that you have one. Some time ago you would only be able to create an account if you already had a Facebook account, but this has changed to please even the less social people who like music.

You have many features available with the Spotify client. You have the music catalogue, the radio, a player for unlicensed music from your computer, the ability to sort your music into playlists, sharing your playlists and songs you are listening to with your friends, finding new music with the help of your friends, or through the news feed on the home page, and many, many apps designed to make your life easier.

One other feature that “Premium” users will find very useful is the offline listening that allows you to synchronise your playlists and then not use a byte of your internet connection for 30 days. The reason behind the fact that you need to go online at least once every thirty days, as Spotify puts it is “just to make sure that your subscription is still active and so … [they] can keep track of how many times the tracks have been played.”

What is your favourite feature?

Have a delicious day,

Maddie.

Sources:  Business insider , Spotify

Spotify – A User Perspective

lovemusicI must say that I am the one in that one in five statistic I was mentioning yesterday, and I do consider music as being one of my main hobbies. I may not be as informed as other “ones”, but I hardly pass a day without listening to music. I remember that from my first allowance I bought two albums. I was 12, and I really liked All Saints, reason for which I really wanted their album. Unfortunately for me I was 12 and stubborn, and I was determined to do this all by myself. Needless to say that my stubbornness bought me an ATC album (well it wasn’t even an album, it was an LP with 13 remixes of the same song) and Vonda Sheppard’s album, which my brother already had. I therefore decided that I would rely on my brother’s collection until I got old enough to know what I’m doing.

Soon after, I started to borrow CDs my brother didn’t have from friends and classmates, and I would ask my brother to make copies if them. I didn’t realise at that time that I was infringing copyright or anything. All I knew was that I really wanted to listen to music and that I really loved my brother’s “Mix CDs”.

rightoneIn high-school I started using YouTube to watch videos but it was really annoying for me to not have a playlist that would run uninterrupted, which is why I turned to LastFM. The problem was that the subscription fee was rather high for my student budget, and I gave this streamer up really soon. The next thing I tried was 8Tracks, which I still use from time to time. But my favourite discovery was definitely Spotify.

What do I like so much about Spotify you might ask. Well, first and foremost, I love the integration between a desktop music player and an online streamer, as well as the extension to all my other devices (smartphone and tablet). I love the fact that I can create multiple playlists to help me organise my (well, their) music according to my mood, that I can upload music that they may spotibook-560x373not have straight from my computer, I like thier radio very much (you can start the radio with a song you love and it will suggest songs that are similar and the best thing is that you can save the songs you like in a separate playlist) and I love the “sing along” app. And of course it has a social feature that simply cannot be overlooked. You can share what you’re listening to, listen to what your friends are listning to and check out other users’ playlists.

There are three different pricetags attached to these services: the basic listening to music or radio on your desktop (or laptop) is free, but is interrupted by ads. The unlimited and uninterrupted version is £4.99, while the subscription which allows you to listen to your favourite music on any device (and download the songs as well!) in £9.99. Maybe I’m biased, but I feel that it gives a lot more value for money that iTunes does.

There you have the personal perspective on Spotify. But what is the business perspective? You’re going to have to tune in again for that :).

Until then, have a delicious day!

Love,

Maddie.

Recording industry

Buying vs. DownloadingFor nearly 10 years, the recording industry has been plagued by uncertainty over how to adapt to new technologies which have dramatically changed the traditional methods of selling recorded music — in a nutshell, the transition from ‘physical’ products such as vinyl records or CDs, sold to the consumer as singles or albums, to the downloading of random tracks to home computers or mobile phones, often for no payment.

The downloading statistics, attendance at live concerts, the success of musical talent shows on television and of musical video games are all reminders of how important music is to society, irrespective of the technology involved or the channels of delivery to the consumer.

One in five UK adults describe music as a “main hobby” (either playing, watching live or building a collection), but a much higher proportions of the population say that they listen to music every day, listen to it on the radio regularly or enjoy browsing in music shops, and 45.6% of homes contain a musical instrument (with just over a quarter of adults able to play one).

HMV

But how do people listen to music today? The recent disruption in the high street market distribution has been obvious with many stores such as HMV closing down. This is a clear indication that people have switched from buying CDs & DVDs to buying singular tracks or albums in a digital format. I am one of those people who stopped buying CDs a long time ago, when I realised how frustrated I was by having to buy an entire album for just one or two songs I liked.

itunesThe pioneer in the field of legally downloading individual songs was iTunes. It has revolutionised the market and has addressed the piracy problem that came with the development of the internet in a very smart way. People were now able to buy just one song and listen to it on their favourite device. Well, that is of course if their favourite device was an “iProduct”. However, considering that only 39% of all smartphone users rely on their Apple device it was clear that there was room for some other big players in this market. The first one to dig into the big pie of MP3 revenue was Napster 2.0, a re-furbished version of the previously popular illegal downloading programe, Napster.

streaming-logoStreaming websites have also made themselves available for a share of the big pie. Of the most popular ones I would mention LastFM, 8Tracks, We7. They act as a sort of online radio station, with the difference that you can choose what type of music to listen to, skip to a different song, and in exchange for a small monthly fee you can get the music without any annoying ads or interruptions. My favourite one, however is Spotify. I like many things about it and the following post will be dedicated to it.

Have a delicious day!

Love,

Maddie.

Music – The Beginning

Music has been a part of our lives since the beginning of our existence. Even in the simplest of forms, we have been drawn to beautiful sounds and have tried to mimic them.

Just like everything else, music has evolved over time, but its main purpose remains the same: to create and project emotions across countries, civilisations and time. Perhaps one of the reasons that music has evolved differently around the world was the difficulty of transmitting the information.

One of the earliest known device for recording sound was the phonautograph, invented in 1857 by Édouard-Léon Scott de Martinville. It’s only use at the time was to study acoustics and only in mid 1877 Charles Cros realised that the recordings could be converted back into sound. However, Thomas Edison’s invention, the phonograph was the first one to actually be able to reproduce the recorded sound. Alexander Graham Bell has also made some improvements to the device, but only at the turn of the 20th century, Emile Berliner initiated the transition from phonograph cylinders to gramophone records: flat, double-sided discs with a spiral groove running from the periphery to near the center. This has been one of the dominant audio recording formats throughout much of the 20th century.

Engineers at AEG, working with the chemical giant IG Farben, created the world’s first practical magnetic tape recorder, the ‘K1’, which was first demonstrated in 1935. American audio engineer John T. Mullin and entertainer Bing Crosby were key players in the commercial development of magnetic tape.

Mullin’s tape recorder came along at precisely the right moment. Crosby realised that the new technology would enable him to pre-record his radio show with a sound quality that equaled live broadcasts, and that these tapes could be replayed many times with no appreciable loss of quality. Mullin was asked to tape one show as a test and was immediately hired as Crosby’s chief engineer to pre-record the rest of the series. Crosby became the first major American music star to use tape to pre-record radio broadcasts, and the first to master commercial recordings on tape.

The next major development in magnetic tape was multitrack recording, in which the tape is divided into multiple tracks parallel with each other. The first development in multitracking was stereo sound, which quickly became the norm for commercial classical recordings and radio broadcasts, although many pop music and jazz recordings continued to be issued in monophonic sound until the mid-1960s.

The first digital audio recorders were reel-to-reel decks introduced by companies such as Denon (1972), Soundstream (1979) and Mitsubishi. They used a digital technology known as PCM recording. In the consumer market, however, tapes and gramophones were largely displaced by the compact disc (CD) and a lesser extent the minidisc. These recording media are fully digital and require complex electronics to play back. Digital sound files can be stored on any computer storage medium. The development of the MP3 audio file format, and legal issues involved in copying such files, has driven most of the innovation in music distribution since their introduction in the late 1990s.

So, where is music going? What further developments have arisen and who has benefitted from them? These are all topics that we will discuss in our next encounter.

Have a delicious day!

Love,

Maddie.