Spotify ignites new hopes among beleaguered music fans
Advisor of Psychology and Educational Sciences Department at Universitat Oberta de Catalunya (UOC); PhD Candidate at Internet Interdisciplinary Institute (IN3)
Now that Spotify has landed in the US and a beta version of Google Music has finally been released, the competition between music streaming platforms is about to become even more fierce. They're all hoping to achieve the same goal: to convert freeloaders into paying customers.
Spotify, on the one hand, has become one of the largest streaming music services in Europe since its 2008 launch: 10 million users (1.6M paying), 15 million songs and free access to its open version are its main credentials. Google Music, on the other hand, is based on the user's music files and makes them available through any computer or any mobile device that runs on the Android operating system. Other services like Pandora, MOG, Rhapsody, Slacker, Rdio, Last.fm, Playlist.com, Grooveshark and the gorilla in the room, YouTube Music, are the main competitors. Not to mention Myspace, SoundCloud, OurStage, ReverbNation and Bandcamp, which allow bands (especially emergent ones) to share original audio files with growing global audiences.
Music lovers have reason to feel optimistic. We've passed from buying an album for $10 (analog or digital) to paying the same amount in order to have access to "Music" -- a massive archive containing the vast majority of music ever recorded. And several services offer a free legal, option with some restrictions: ads, limited time, no mobile devices, etc.
Even though the "All you can listen to" formula seems a sensible step in the context of the mass migration to the cloud, the promised "anytime, anywhere" access is still far from being a global reality. Most of the streaming subscription services operate in a handful of countries (the US, followed by Canada and several European countries). Grooveshark claims to have the widest global net, followed by Spotify, which now is available in seven countries (the US and six in Europe).
Dealing with licensing issues with record labels and rights associations is extraordinarily complex (that's why none of these services offer blanket international access). Further questions remain about mobile device compatibility, the size of the music catalogues, exclusive content, how social media will be deployed, and the way these services will handle the sampling, mashing up and remixing of the music they offer.
What seems clear amidst the uncertainty of the music business is that the Internet is no longer a menace to the industry. Piracy is still a relevant issue but the Web has proven its financial potential for the music business through the great success of iTunes, the early years of Myspace or even through mobile phone applications like Shazam. Having said that, no one can assure the success of the "all you can listen to" formula as it stands right now. Century Media, a metal music label with bands like In Flames, Napalm Death and Sick Of It All, has recently removed its files from Spotify, arguing that losses in sales cannot be replaced by subscription revenue. But Spotify claims that they're monetizing audiences who were largely downloading illegally.
If paid subscriptions grow, that could give more credit to Spotify's model, especially if incoming revenues are shared in the right measure with artists. If users, even with some restrictions, stick to the free choices, the business will become hard to sustain. Taking a small percentage of ad revenue could be enough for emergent bands, but it may never be satisfactory for seminal rock bands like Led Zeppelin, the Beatles or AC/DC which have been unreceptive to streaming services from the beginning (AC/DC is still not on Spotify or iTunes). The hope is that the music labels, musicians, streaming platforms and global audiences will find a proper way to converge peacefully into a renewed music business. The "anytime, anywhere" model may not be completely satisfactory for everyone, but it's a start.