Spotify will do something in the US market, especially with this level of hype and financing. But there's a serious battle ahead, one that promises to produce huge consumer lessons. Coming this fall, it's Apple's iCloud in one corner, and Spotify in the other -- and here's why the iCloud ultimately prevails...
(1) The iCloud Is Cheaper
At present, Apple is planning to price the iCloud at $24.99 - a year - which easily trumps Spotify's Premium pricing plan of $9.99 a month (or even the $4.99 Unlimited charge). And price matters,
especially 'in this economy'.
(2) The iCloud Might Become Drastically Cheaper...
Remember, Google's music cloud is still in beta, and could be free. Which means, Apple may decide to drastically drop its price - or even position the iCloud for free as well.
(3) It's a One-and-Done Market...
...at least on the paid side. Consumers don't need two clouds, multiple apps, or overlapping services. And if they pay for one, the industry should consider itself lucky.
(4) There's No Missing Music.
Sorry, I don't get it. Spotify says they're giving me the universe of music at my fingertips, but I keep finding annoying gaps. Then, I'm told I can fill those gaps with my own collection....
That's one approach, but the iCloud is simpler. It's just your personal collection - one thing, the music you want, accessible anywhere. Which raises the next point...
(5) The iCloud Is Closer to Current Usage Patterns.
Subscription remains a theoretical possibility in the US, but downloading and owning music are very tangible realities. Extending that collection into the cloud is less of a stretch for consumers. And remember, subscription has been struggling for about a decade on this side of the Atlantic.
(6) It's Apple.
And people are infatuated with Apple. But beyond this sometimes-ridiculous love affair, Apple has a bigger marketing platform, and their own hype cycles (especially this fall). They also enjoy the luxury of constant consumer contact, especially when the hype wears off on Spotify.
(7) People Don't Care About Music as Much as We Think...
This is one of the hardest pills for music industry types to swallow. I've been spending the last few days on Spotify rating obscure disco songs and delving into the Samiyam catalog, but that's not the world! Most listen to a small percentage of their existing iTunes collections, and aren't plunging into the Tail. And that favors a structure like the iCloud, not Spotify.
Comments Closed
Karen Oh Wednesday, July 20, 2011
Wow. I couldn't disagree more with this assessment.
First things first, the iCloud isn't a subscription service. That means that you have to buy that, then purchase tracks individually. If you buy fewer than 5 or 6 tracks a month, it may be cheaper. But in the long run, i think people DO want all the music at their fingertips. They just don't know it yet...
Subscription, not cloud is the future.
aaccardo Wednesday, July 20, 2011
Karen,
You echo an article by Glenn Peoples on Billboard.biz yesterday about Spotify, where there is the same confident assertion that access will trump ownership. I find this confidence misplaced, even as I admit it is a possibility. Truth is, we don't really know what the future is, and any assertions about it are simply guesses. I think Paul's more nuanced analysis does more accurately reflect our inherent psychological need to claim, own and organize the things that reflect and enhance our identity. It more closely reflects our connection to music, whether a mainstream Ke$ha fan or a Samiyam devotee. However, if Spotify can replicate the benefits of owning music through the social sharing and playlist functionality, it may very well be possible that these psychological needs could be provided through access, paving the way for the future that you're asserting so confidently. But in the end, the fact remains, we don't know if access will be the dominant form of consumption in the future.
Anthony
HansH Thursday, July 21, 2011
Karen, I fully agree. Paul is so wrong here. It's like comparing a harddisk with a CD. You still have to fill the harddisk with music. The CD comes with music.
rod.ski Thursday, July 21, 2011
Totally agree, Karen. Totally disagree, Paul.
It is VERY different to simply find all music that you'd want to listen to in a streaming subscription service in comparison to upload your "own" music files to a cloud storage.
You'll never have to worry about synchronizing music files anymore and certainly the days of purchasing music files are over, god bless. It can't get more user-friendly than this.
Rod
rzaidi Wednesday, July 20, 2011
One other important issue to keep in mind is that the battle isn't just iCloud vs. Spotify. Poor Spotify, as slick and well-funded as it is, will have to battle all the other subscription services: Rhapsody, Napster, Rdio, Sony's Qriosity and on and on...
I could see myself having one subscription service and one cloud
storage/streaming service (for stuff not on the subscription service)
but would be happier if they were one and the same...
Visitor Wednesday, July 20, 2011
Paul, great assessment of reality. Kudos. Hard to believe Spotify can win, especially when he is getting close advice from illegal Napster founder, Sean Parker. I also don't believe the delusional hype recently is having a positive effect on Spotify paid subscription interest.
My inside sources tell me that Spotify has less than 700,000 paying European subscribers and not the 1.6 million reported by Spotify recently.
I challenge Spotify to prove their subscriber numbers by hiring a major North American auditor preferrably appointed by the most senior partner in that accounting firm.
/yv
ryemcd Friday, July 22, 2011
I'm pretty sure Napster turned the music industry upside down. I couldn't disagree more with your statement. This article compares apples and oranges.
@UncommonRecords Wednesday, July 20, 2011
Nasa/Adam Warlock
spot. On. all of this is true.
@geoffsmith Wednesday, July 20, 2011
Geoff Smith
I wonder if this guy is right?
@Opeyonline Wednesday, July 20, 2011
Michael Lawson
Interesting read new Spotify users...
wrong Wednesday, July 20, 2011
The future is legal access to nearly everything, not clouds where you put "your" stuff.
Personal preference or future? Wednesday, July 20, 2011
What are we talking about here? What we think the future of music consumption will be? Or how we personally like to consume music?
If its the latter, I for one like the subscription method. As one commenter already noted, the iCloud paradigm would still force you to PURCHASE new music (assuming you don't pirate), whereas with a subscription, you pay flat per-month fees and can consume as much as you wish.
With the ability of smartphones these days, I can "download" particular tracks to my mobile and access them offline (I'm not sure how the licenses allow for that, but that's for another discussion). Moreover, I already have many of the songs I "own" loaded onto my mobile device, so I can still access those if I want to.
Full discolsure: I've been a Rhapsody subscriber for a number of years now (way back to the Yahoo! Music days) and I'm convinced that were it not for one of the most botched (or simply non-existent) marketing campaigns of all time, this service would be ubiquitous among music hard-liners and cubicle warriors alike.
But hey, however we get it, it will be gotten, and thats the important thing. (right???)
Yup Wednesday, July 20, 2011
Paul's right, but even he doesn't give enough weight to his point #6.
It's Apple. Their brand equity + existing customer base + ability to make it seamlesly integrated with iDevices + their ability to take the Spotify app off the Apple store = they will beat Spotify on Apple devices, and beat them handily.
But who will win on Android? Google will surely come out with a competitor soon and will likely make it more seamlessly integrated within Android. So, Spotify will lose there too.
Windows? Who knows.
But Spotify is fighting against the biggest giants in the technology space, and all of them are waking up and realizing (finally) that music is 'core' from a strategic standpoint. Apple doesn't make much money off of music, directly. But it sure sells a lot of devices because of music. So having control over that complimentary product of music is critical to success. Google knows this.
Neither Apple nor Google are going to stand for this contagion in the water, and the labels won't be able to do much to stop it (despite the fact that a strong 3rd competitor would give them leverage agaist the other 2), as they are living on a razor's edge right now themselves and all hoping to keep their jobs by not screwing up in the short term.
Greg Thursday, July 21, 2011
I agree with this point completely. Apple's "win" is not from music sales but from device sales. They "might win" in the end by virtue of that seamless software/hardware paradigm that is now clearly their HUGE bullet in the proverbial chamber. Apple's recent fiscal reports show that.
I say "win" because like a lot of comments on this thread, I think all the points of view are correct to a degree. Theres's not going to be one winner.
Spotify/Rdio/Rhapsody/et-all will have a place in this space because Apple won't ever go to a "consume all you want for 'x'" model. They don't care about that. So, music consumers that enjoy that model vs "buy all of your music from us, store it in our cloud, and sync it to your devices you bought from us" (Apple) simply points out the 2 models that will compete in this space for consumer dollars.
Personally, there's value to both models. We know we'll never have ONE company providing both services. Certainly not from Apple. They aren't in the music business. They are in the PRODUCT business and they want us to buy more and more newer and newer devices to consume the music they have made agreements to make available to us in their SOFTWARE service (iTunes).
Spotify for me is cool so far, but to another point from the author, it has flaws. But I like it. It's a nice step forward in this space and for the record Rdio is really slick too from a music discovery perspective.
The best part of this subject is, we have OPTIONS. All of us have options. Who "wins" in the end is impossible to predict. Regardless, the consumer will dictate the direction of the space. Clearly, that direction right now is "we want both an own and consume model". We'll see how it shakes out.
Jennings Segura Saturday, July 23, 2011
I totally agree.
Greg Thursday, July 21, 2011
I agree with this point completely. Apple's "win" is not from music sales but from device sales. They "might win" in the end by virtue of that seamless software/hardware paradigm that is now clearly their HUGE bullet in the proverbial chamber. Apple's recent fiscal reports show that.
I say "win" because like a lot of comments on this thread, I think all the points of view are correct to a degree. Theres's not going to be one winner.
Spotify/Rdio/Rhapsody/et-all will have a place in this space because Apple won't ever go to a "consume all you want for 'x'" model. They don't care about that. So, music consumers that enjoy that model vs "buy all of your music from us, store it in our cloud, and sync it to your devices you bought from us" (Apple) simply points out the 2 models that will compete in this space for consumer dollars.
Personally, there's value to both models. We know we'll never have ONE company providing both services. Certainly not from Apple. They aren't in the music business. They are in the PRODUCT business and they want us to buy more and more newer and newer devices to consume the music they have made agreements to make available to us in their SOFTWARE service (iTunes).
Spotify for me is cool so far, but to another point from the author, it has flaws. But I like it. It's a nice step forward in this space and for the record Rdio is really slick too from a music discovery perspective.
The best part of this subject is, we have OPTIONS. All of us have options. Who "wins" in the end is impossible to predict. Regardless, the consumer will dictate the direction of the space. Clearly, that direction right now is "we want both an own and consume model". We'll see how it shakes out.
wrong Friday, July 22, 2011
Spotify is working in Google's office space. Just saying.
Thanks for playing.
lroose Wednesday, July 20, 2011
Hi Paul,
Until Apple adds free, on-demand content that is not owned by the user, you are comparing apples to oranges.
If you own the majority of the content you'd like to hear, iCloud/iTunes/Amazon/Whatever is going to hold the advantage.
If you do not own the majority of the content you'd like to hear, like myself and Spotify's target audience, services that simply serve you content that has aleady been purchased aren't even the same product and shouldn't be compared to Spotify.
All day I've been using the Spotify invite DMN sent me to listen to charting albums I've been wanting to hear, but haven't wanted to hear enough to buy. No other major service gives me this kind of free, on-demand access in exchange for a 30-second audio ad after every 5th song.
Will Apple, Google and the other bigs be able to fairly easily replicate what Spotify is offering? Sure, but until free, on-demand listening is integrated into the offering, we're comparing apples to oranges.
Thanks again for the invite - listening to all this new stuff has been a blast.
LG Wednesday, July 20, 2011
Spotify has a big advantage, 15 millions songs to play the first time you login.
iCloud needs you to own those songs in the first place. (well maybe not!) but in theory, you'll still have to buy (or pirate) those 15 million from somewhere before iCloud will match the fingerprints and give you access to them in the cloud. I prefer the method of filling in any gaps with my collection than the other way round.
There's plenty of room for improvement in Spotify - the discovery aspect is lacking (they seem to be hoping social + apis will sort it for them - i'm not so sure - some basic charts by genre charts would help) but they are very well run and made all the right decisions to date.
Steve Ali Lee Wednesday, July 20, 2011
I don't know...I just started playing with Spotify... It seems like APPLE had something to do with the delay here in the US.
I'm impressed with Spotify because you have your library and access to new music without the immediate outlay which is way cool. I've yet to mess with iCloud but I'm eager to see how it stacks up...because I can't place iCloud on my Android phone. But I can place Spotify on my Touch...
Yves Villeneuve Wednesday, July 20, 2011
Just to add a little clarification that is not lost on everyone:
You have to purchase a subscription every month to have unguaranteed unlimited music (you may or may not like), as Paul correctly pointed out.
In the download model, you can purchase what you want, when you want and be guaranteed unlimited music enjoyment at no extra costs.
The download model is the natural way to go for most music consumers as Paul also pointed out.
Clayton Wednesday, July 20, 2011
That's actually a matter of opinion, that it is "the natural choice". Quite frankly, I do not WANT to own music. At all. It takes up space on the hard drive (Quite a bit of space in fact). And to be honest, playing from spotify seeks faster than itunes can off of my hard drive. It is less bloated, despite having ads! Hmm, imagine that.
Ruckus was kind of like spotify, at the time, but their mistake was to give it all away specifically to college students, who are the lazy masters of cracking encryptions. So all that music got stolen anyway, which is counterproductive to the goals of the labels.
As far as gaps, I definitely can't find any. And I listen to some fairly obscure things. And besides, if you have to pay for iCloud, THEN pay for content to put on it... what's the difference between that and buying songs to associate with spotify? Once you buy them, just populate to whatever devices you like.
The apple Kool-aid may be yummy, but you don't have to do kegstands of it. In my opinion, subscription makes a lot more sense.
Visitor Thursday, July 21, 2011
The sales facts speak for themselves, that is, download is the natural choice for most music consumers.
By the way, iCloud is free; if you buy from iTunes it is automatically stored in iCloud, this service is automatically free. I am not quite sure if uploading to the iCloud is free.
The iMatch service is $25 per year. There seem to be a little of confusion of what customers are actually paying for.
You shouldn't find Yves Villeneuve music on Spotify but you will find it on iTunes. Spotify is not authorized to use my music, art cover, or tracking list to promote Spotify.
Rocman Design Wednesday, July 20, 2011
So far... pro Spotify
I've prided myself on my iTunes library for years, the best feeling on my commute to work was knowing I had a couple new LPs to dig into each day. P2P networks like OINK and blogs like Hype Machine made music discovery a dream. But, sharing music with friends has always been a nightmare, the free file sharing resources always have caps in size or timed expiration. Spotify has made me seriously question the benefits of a thorough "personal library". It's also relieved the tension of knowing there may be some metadata incriminating my DL methods if I choose to UL to a hosted server for myself or to share with others.
Mike McCready Wednesday, July 20, 2011
There are those who disagree, but I think Spotify has a real shot at winning the music game in both the US and Europe – if not beyond.
It makes almost all the music in the world available to you on-demand, 24×7. That’s just going to beat any cloud service that requires you to pay for the cloud plus pay for the music you’re going to store in it. And yes, the paradigm of owning all the music you play is familiar to the public but when access is perceived as good as ownership minus the storage and organization headaches, I can’t see how anyone is going to prefer to own more digital files than they must. Storing and organizing your documents is hassle enough for most people. A solution that helps you avoid that kind of pain will be welcome relief for most.
Apple and Amazon are formidable opponents. Spotify isn’t going to win easily and several solutions will co-exist for some time to come – but eventually, I imagine Apple and Amazon will have to become more like Spotify to remain competitive rather than outperform Spotify with their current propositions.
I’ve been a premium Spotify user for almost 18 months and a free user when I’m in Europe (1/3 of the year) a lot longer than that. I practically quit buying music as soon as I became a premium user, which enabled me to use Spotify unlimitedly in the US. I even opened a second account and gave it to my dad for his birthday last year. He quit buying music after that too and hasn’t turned back.
When access emulates ownership in the way Spotify pulls it off, there’s just no need to own music anymore. Sure, Spotify has gaps in their catalog but I’m betting market forces will require content owners to resign themselves to Spotify’s ways rather than have their content increasingly omitted from play lists or worse – forgotten – by an audience that becomes accustomed to Spotify’s access model.
And yes, I know there are other access models here in the US that have been around for the better part of a decade such as Rhapsody and more recently MOG and Rdio. But they don’t have a freemium model that lets people get a taste. That’s where Spotify can drive adoption and get people used to the access model and foster brand loyalty at the same time – thus beating their access competitors as well.
It will be interesting to watch.
Regardless, other players will do what it takes to compete more effectively against Spotify. MOG, for example, is close to launching their own freemium model and there are parts of their interface and a few features that give Spotify a decent run for their money. And Apple is not one to be in any game and not be the leader. In my estimation though, it’s just a matter of time before they will have to change their model to ultimately win against the currently superior access model and the more compelling user experience.
Visitor Thursday, July 21, 2011
iCloud is nothing but a feature. It is cheaper than Spotify, because you need to own the music and add it to the digital locker first then you can play it. Unlike Spotify when the catalogue is already there.
iCloud is the same as Google Music, Mp3Tunes, etc. Its a storage service
Spotify, MOG, Rdio, etc. give you the catalogue to play with. No need to buy and all the music in the world is at your finger tips.
madhuri Thursday, July 21, 2011
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alex Thursday, July 21, 2011
Spotify is a streaming-service.
iCloud is a music locker for iTunes.
You're comparing Apples and Oranges.
Personally, I think Spotify completely pwns iTunes.
filtrum Thursday, July 21, 2011
The difference between "owing" music and having it all "at your fingertips" is that you don't want to buy all the music you want to listen/check out. If a frend recommends you a new release, you don't go and buy it right away - you want to listen it first, maybe more than one time. With Spotify you can listen to a part of a track, skip, rewind, come back to a certain track etc.
And if you want to buy a track/album (in order to support an artist or because you're afraid that it might be removed from Spotify by the label or that Spotify itself might go bankrupt or whatever) you can still buy it right from Spotify (at least in European version). But even in this case it's still better to stream it because in this case an artist will get a couple of cents from royalties:)
@christianward Thursday, July 21, 2011
Christian Ward
More Spotify skepticism from Digital Music News. I wrong to be baffled by this?
Bill Rosenblatt Thursday, July 21, 2011
Paul,
Sorry but I disagree with every point you make except the last one. We're both too close to this to see how the masses will accept these services.
However, I think that your reference to the Apple hype is a recursive self-loop that many others have fallen into. iCloud is ultimately iNothingMuch, just like the other cloud storage/sync services. You are grossly understating the impact of discovery. iCloud does not help you with this; it is just a place to park and move bits.
People already rely on social interaction to discover music. I'm not talking about Facebook, I'm talking about the real world. The service that wins is the service that fits alongside and then ultimately supplants real-world discovery. Is Spotify such a service? Not by itself, but it's much closer to being such than iHype.
Besides, look at the latest uptake figures in subscription services, which I have assembled into one convenient place: http://copyrightandtechnology.com/2011/07/20/do-paid-music-subscriptions-indicate-a-tipping-point/
@kristyengels Thursday, July 21, 2011
kristyengels
Not sure I agree but good argument.
@spotidj Thursday, July 21, 2011
spotidj
In for a laugh? Then read this.
@finetunes Thursday, July 21, 2011
finetunes (official)
An interesting analysis.
lsapadin Thursday, July 21, 2011
Paul, I think there is definitely room for two kinds of services: a convenient way to listen to the music you own anywhere, and an inexpensive (or free) way to hear new music.
In the past, people bought their own records, and also listened to the radio to hear new music (and eventually buy some of it). No one had to choose one or the other.
Today, my "records" are on my 160GB iPod, plus I subscribe to Rhapsody (and a bunch of podcasts) to listen to and hear about new music.
If Spotify (or a competitor) can combine the records people own with a well-made and fairly priced (or free) subscription service -- essentially satisfying both functions -- then that could well be the winning combination, and the winning company.
Guy Eckstine Thursday, July 21, 2011
I rarely disagree with you but this time I do.
"It's just your personal collection - one thing..."
That's exactly why Spotify will be a major player as there is no need to own your personal collection anymore. This is a game changer, and this is the large crack in Apple's armor.
Consumers don't have to worry about uploading or purchasing anything anymore. Unless Apple offers up a streamed service ala Spotify (not your personal uploaded collection) I don't see Apple competing with Spotify at all. Not too mention when cable and phone/Internet services offer Spotify as a utility.- it's over.... With the coming convergence of tv and computer in the home and mobile. the iPod will go by way of the Walkman, and Droid mobile platforms are going to have a say in this too further eroding Apples dominance in the smart phone realm. The only drag is there is no Blackberry Spotify app yet, so I may have to switch to Droid- certainly not the iPhone.
My .02 worth.
Visitor Thursday, July 21, 2011
Those in the minority are always the most vocal.
Please don't forget Sean Parker's comment of eventually "squeazing the balls" of Spotify customers. The comment should be found in DMN archives.
For those who don't know Sean Parker, he is an investor and close advisor to Spotify and was the founder of illegal Napster.
/yv
Spotimy Thursday, July 21, 2011
Sorry but I fail to see your argument. Are you really saying that because Spotify has 'a few gaps' in it's enormous amount of music at your fingertips, you'll instead pay $25 for the privilege of listening to your own music collection.
It's like being given the opportunity to travel the world for the price of a taxi ride and then arguing that you didn't visit every country.
Spotify gives you the opportunity to listen to vast amounts of music, music you've never heard before, it gives you the chance to discover new music, the chance to listen to many thousands of albums all for the cost of a few albums a year.
The Aging Populace Thursday, July 21, 2011
net based subscription offerings, once you get past the techno-hype, isn't really all that different than radio, although radio is far more reliable than the net, especially outside the metropolitan areas.
my 8000+ album collection, with quite a few out-of-print albums and live ROIO soundboards, is mostly digitized in 24/96 FLAC files, and I just bought a 3TB disk for ~$150, which is connected to my tube amp. Obviously I see value in this, both in the selection and in the audio quality, whereas I'm not convinced that the subscription/cloud hype represents much of a value proposition for the consumer.
mind you, i also think listening to music on a phone or an ipod *devalues* music. i suppose i'll hold off on icloud and spotify until the industry starts addressing product quality, instead of simple delivery. assuming there's still an industry left, that is...
St Mark Thursday, July 21, 2011
Thank you for the analysis. However:
(1) iCloud is cheaper
Annually, $25 for iTunes Match vs. $120 for Spotify.
This fails to take into account the cost of buying music for iTunes. The iCloud price advantage only works if one intends to add a rather small amount of music to one's collection every year.
Contrary to initial speculations, iTunes Match does not grant amnesty for illegally aquired music. One is still expected to acquire the music legally and with respect for intellectual property. See here, for example:
Will 'iTunes Match' Make Your Pirated Music Any Less Illegal?
http://techland.time.com/2011/06/09/will-itunes-match-make-your-pirated-music-any-less-illegal/
Regards,
St Mark
Jun Mhoon Thursday, July 21, 2011
People really don't care about artists or their artists branded music as much as they used to. Yes, we/they still love music and have to listen to it but who they're listening and what they are listening to is becoming less and less important. I'm setting in Starbucks as I write this and listening to I Don't Know Who, on their in store system. By the time I realize that I'm liking what I hear, it's over and the clerks don't have a clue either to what's playing and they hear it everyday. So, I'm a digital music distributor and producer and I'm turning down artists these days because they don't get it. It's not about the artists. It's about the content and being able to monitize it Quickly. artists and musicians need to focus on making Great content, packaging it and shipping a track a day. This is where I feel we are now. iTunes is still and will continue to sell Hardware. That's what iTunes is and was created for. Spotify doesn't have products so good luck to them. They better take the venture capital and run. God Bless them and Help us all.
Spotify will be sold Thursday, July 21, 2011
Really, people? Really? Friday, July 22, 2011
I find it hilarious to read all of these replies, ragging on Paul's opinion. Why? Because all of these repiles are written (most likely) by those of us living in the music industry vacuum. It's no secret we all prefer and see the value in Spotify vs. iCloud, however, no one is thinking in terms of the AVERAGE, Joe Blow consumer. I'm sorry, but all of his points are correct, so when you post a reply to something that requires you to think like a consumer, take off your music industry goggles for a second and put on your average American blue collar.
Jennings Segura Friday, July 22, 2011
Both will win - this is not a zero sum game.
Its like the record shops and the radio. They never competed, but just provided 2 different services for the same industry. So, there will be room for both Spotify and iTunes as the digital music ecosystem replaces the analog. But, the roll each will play will be specialized - each catering to different stages/segments of the digital music market. In short, Spotify will satisfy the listeners, eventually edging into radio’s space and Itunes will satisfy the fans who want to buy music and maybe see a concert on their iPad.
My reasoning starts with this question: What purpose does Spotify serve today versus iTunes in the food chain and is it sustainable?
Artists, songwriters and producers can’t live on Spotify income. Not yet at least. But, for big labels and publishers, Spotify and other subscription services offer a propitious opportunity to leverage their back catalogs, so they are promoting it heavily. Didn’t they invest too? So, if you are sitting on 10 million songs, Spotify is great and fosters a sustainable music eco system so labels can go on making music. To me, Spotify is like thousands of local radio stations at your finger tips – and you decide the playlist!
And Itunes? Well, its where you buy music and be a fan. People still want to buy music and have that “analogue experience”. ITunes has huge support from the buyers and sellers of music because it mimics the former analog ecosystem based on CD sales which is still so familiar to us: You buy the music the artist creates, rather than just listening on the radio. That $9.99 per song is something small artists/labels can live on and goes further by creating a new generation of loyal fans who buy concert tickets and t-shirts. Live concert income may fall victim to Itunes as well.
So, what’s the future look like?
Apple enjoys a position that Spotify can and will not threaten - the combination of multiple devices plus owned content in the cloud. This is hard to match by anyone – except Google. Spotify needs to create a sustainable competetive advantage that other subscription services and even Apple can’t follow– like exclusive deals with 4G supported car radio manufactures to edge in on radio’s dominance. So, both iTunes (with its new digit locker iCloud) and subscription services (maybe Spotify will be the leader?) will cut out its own niche in the music ecosystem until a new technology re-draws the lines on the playing field. Or until Apple comes out with an iRadio.
Econ Friday, July 22, 2011
I already made my personal decision and iCloud was the loser.
Lala (the service Apple bought and shut down) was a lot closer to Spotify than iCloud is. If Apple somehow resurrects part of the Lala service via iTunes, THEN they will be competing with Spotify, until then they are 2 completely different models and I suspect that people who listen to music more than an hour a day will choose Spotify or other subscription services over iCloud.
@uvmann Friday, July 22, 2011
Uwe Viehmann
Comparing apples & (well, a bit greenish) and oranges...
ddoug Friday, July 22, 2011
The thing about iCloud that gives me pause is the upload time for my collection of a zillion CDs, most of which are available on Spotify already, even relatively obscure ones. Seems like a big time consuming job.
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