The social-media craze that kicked off with having Xanga, then led people to have a Myspace, and ended up with the all-powerful Facebook is now crossing boundaries into music and music technology. Spotify has taken the lead in the music world when it comes to streaming music and connecting people. The highly controversial company has revolutionized music in the same way MTV did, Napster (who remembers that?), and has taken online streaming ten steps farther than Pandora ever dreamed.
A little background
Spotify originated in Sweden in the fall of 2008 and after two years they had 10 million people subscribing and by the end of last year they had about 20 million users on the music service. What is incredible is this rapid growth has little to do with the U.S. market as it was not added until summer of 2011. Currently there are two main user options for Spotify; (1) free subscription, acts a lot like an online profile connected to a persons email, but gives them access to music but with commercials; (2) a paid subscription which comes with various benefits, the two biggest being offline access to the Spotify library, and also the elimination of the pesky and annoying commercials.
Currently Spotify is available in more than 20 countries, and music is available in the native language but any user can access any of the 20 million songs in the library regardless of language. Currently the Spotify headquarters are located in London, England, but all of the developments for the program are run through the original Stockholm, Sweden location.
Also notable, the vision for this music to company is to become an “operating system” for music as Huffington points out. This means the streaming service is constantly improving the user’s interface, and also developing various applications that run off of the system to enhance the user’s experience of Spotify. One might think of Spotify as iTunes on steroids. Despite the rapid growth of 1 million paying subscribers in March of 2011, to 4(+) million paying subscribers currently, Spotify still has yet to turn a profit. Many Wall Street analysts will be quick to point out that many great companies take awhile to become profitable. When you have people like Sean Parker as a financial backer, you get an extended grace period to turn that profit.
Speaking of Sean Parker, did I mention there is a big controversy with the use of Spotify? If unfamiliar, Parker founded the infamous Napster (while a teenager) which was an illegal music file-sharing website that subsequently launched him into millionaire status. This also brought about Parker’s uncanny ability to help develop social media as portrayed in the movie “The Social Network” (2010), essentially think of Sean as having the computer knowledge of Zuckerberg, and the social skills to make stuff happen. He is the Midas of the social media realm where anything he touches literally turns into gold which has helped establish him as a billionaire internet guru.
So what’s the big deal anyways? A streaming music site opens up a world of music accessibility unparalleled in history ever. If anything it is a great success keeping in mind that recording technology is not very old, especially considering the first playback came from a cylinder made of wax. While an avid user of Spotify, many are concerned about this advance for several reasons.
1. Music culture globalization. The world is shrinking, and that has been overall effect of the Internet, it wasn’t a concern of musicians until they realized their languages were losing unique identities. The more music that is written the harder it is to create and write in an original voice. This means having a niche sound becomes nearly impossible. There have been a few bloggers complaining that their local scene is becoming diluted by the same sound, which is also what happens to be trending simultaneously due to services like Spotify.
2. Payment. Spotify when first starting out was notoriously awful about what they gave to artists per stream. They still are only paying fractions of a cent for a play but they have been getting better. Last year their numbers put them at spending $150 million in payouts per stream. When you have 20 million songs in the collection it still does not end up being a lot, especially when you consider that each fraction of each cent goes to the Label. The label then takes their keep and passes it on until it finally reaches the artist. This amount pales in comparison to record sales as well and there hasn’t been much correlation between users listening on Spotify and then buying the album.
These are just some of the complaints I’ve found so far, and while I have not extensively gone into them, it is because a lot of these are more emotionally and intellectually based arguments, coming from musicians who have sat and stewed over the issue for sometime on their own. Other bands/management have also had qualms with Spotify such as Coldplay, and the Black Keys (pardon the French), yes, even Adele. The questions remain. How is distribution through Amazon, iTunes, and Spotify shaping music and are what are the long-term effects of our desire for instant and cheap music that is also super accessible? Most importantly, how do we handle this responsibly so creating new music to be distributed is encouraged, and we allow these artists the opportunity to make a living from music without needing to be a celebrity either? This will be interesting to see what happens down the road and the ramifications we are accruing.
Spotify is also responsible for bringing people awesome videos like this one with a personal favorite of mine, MUTEMATH.
Don’t get me wrong either; I’ve been using Spotify while I’m writing this blog. I’m an avid user but I still reserve my skepticism too. I’m still waiting to see how beneficial this is, in this scenario the consumer has won, the users have won, the labels are in a middle ground and many artists find themselves losing or pressured into going with system. All I’m asking is for heightened awareness, and to be reminded that if something is too good to be true, it most likely is.