Feeds

Spotify: We kick the tyres

Best thing since sliced vinyl?

High performance access to file storage

A future for Spotify?

Now the big question - I'm afraid it's one that involves a banned buzzword. Is Spotify's business model viable?

Well, my first reaction is obviously no, as a conventional business. There isn't enough money coming into the system. Yet with great technology and enthusiastic users, it's an attractive acquisition play: the way forward is through the EXIT door. With veterans from Skype on board, this is a path successfully taken before: find a rich buyer, and bail.

Ad supported music is a bust: it needs to scale to huge numbers to gain even pitiful revenue. Compare it with radio, which is struggling. Targetting users with ads - which are really sales vouchers - is expensive and unrewarding. And the ads need to be really, really irritating before users even consider paying for a subscription which turns the ads off. But users are promiscuous, and just as they graze from one social networking site to another, they graze between music services. When the ads exceed the pain threshold, they wander somewhere else.

Spotify is probably even worse for the music business, which appears to have given away the house under the misguided belief that it "has to compete with free" by being free, implying we won't pay for stuff. In a couple of days, I knocked dozens of potential purchases off my "CDs to buy" list, and made few discoveries - which translated into just a couple CDs.

So the challenge for both Spotify and music business is to convert us into paying subscribers somehow. What tricks might Spotify have to do this? Well, there are other options.

One is obviously licensing it to ISPs, websites or even Apple itself, as a streaming feature in iTunes. Don't forget that Apple's growth is down to making great music hardware, all content delivery is something that makes the hardware more attractive.

Another option is to make the subscription really attractive. How about downloads? Executives have hinted at adding features to the pay-for version.

The people with the most to worry about from Spotify are the much-hyped web-based services such as CBS' Last.fm and Pandora. Spotify really blows them away. By backing mid-noughties fads ("deliver everything through the web browser", "social recommendation") they backed at least a couple of dead horses.

So Spotify deserves a big round of applause - the first music service launch with a bit of a "Wow! How do they do that?" factor. But it has some way to go to match the deep integration of social options that PlayLouder MSP provides licensees with (chat, stalking, etc), and no downloads. And it will need to sprout more of these and perhaps a new approach to the market before it's viable. ®

SANS - Survey on application security programs

More from The Register

next story
Dropbox defends fantastically badly timed Condoleezza Rice appointment
'Nothing is going to change with Dr. Rice's appointment,' file sharer promises
Audio fans, prepare yourself for the Second Coming ... of Blu-ray
High Fidelity Pure Audio – is this what your ears have been waiting for?
Record labels sue Pandora over vintage song royalties
Companies want payout on recordings made before 1972
Zucker punched: Google gobbles Facebook-wooed Titan Aerospace
Up, up and away in my beautiful balloon flying broadband-bot
Ex–Apple CEO John Sculley: Ousting Steve Jobs 'was a mistake'
Twenty-nine years later, post-Pepsi exec has flat-forehead moment
Apple DOMINATES the Valley, rakes in more profit than Google, HP, Intel, Cisco COMBINED
Cook & Co. also pay more taxes than those four worthies PLUS eBay and Oracle
Number crunching suggests Yahoo! US is worth less than nothing
China and Japan holdings worth more than entire company
prev story

Whitepapers

SANS - Survey on application security programs
In this whitepaper learn about the state of application security programs and practices of 488 surveyed respondents, and discover how mature and effective these programs are.
Combat fraud and increase customer satisfaction
Based on their experience using HP ArcSight Enterprise Security Manager for IT security operations, Finansbank moved to HP ArcSight ESM for fraud management.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Top three mobile application threats
Learn about three of the top mobile application security threats facing businesses today and recommendations on how to mitigate the risk.
3 Big data security analytics techniques
Applying these Big Data security analytics techniques can help you make your business safer by detecting attacks early, before significant damage is done.