We can't get enough of the @songkick app! Check it out in today's App of the Day: http://t.co/z4ltKYTo
One's company? Send us your "happy to be single" tracks to build a great playlist for next week http://t.co/Vzh7f174
#BobMarley would've been 67 years old today #MusicMonday http://t.co/YZNqOrCx
Do you have any playlists with #BestBandsIHaveSeenLive? Share them! #playitforward
RT @himupnorth: @Spotify Radio app is fantastic. Discovered loads of new artists that way.
What's your 'how-did-I-ever-live-without' #SpotifyPlatform app? Share with us your favorite new feature!
#FollowFriday our friends from @thisdayinmusic who gave us the tunes for this week. Check their playlists here http://t.co/g2Te1NSw
Punxsutawney Phil saw his shadow. Here's a playlist to help you cope with the news. http://t.co/EDZ5BynZ #playitforward
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Check out our playlist with the nominees from the @NMEmagazine Awards 2012 http://t.co/hZ5kqIoX
A few thoughts on the past year by Daniel Ek.
I’ve spent some time thinking about the last twelve months and I wanted to mark the one year anniversary of Spotify with a few thoughts about where we have got to as a business. I’ve set those out below. I want to start off by saying a very big thank you for the support we have had from all the record companies, large and small, music publishers, collecting societies, managers and artists who have supported us, been progressive and helped us grow this business to where we are now.
Spotify has a long way to go but this continued support from the music industry in the face of a recession and rampant piracy has made the difference and I feel that we are set up to succeed with this kind of willingness to innovate and try new things from the music industry…together we can do even better things.
So, here is my view on Spotify and where we have reached after a year in business…
It’s been an interesting year within the music industry, with many insiders questioning whether Spotify’s model is a sustainable one. Meanwhile, it’s been amazing to see just how our users have taken Spotify to their hearts.
I first considered writing about the state of ad-supported music, and given that I care more than most about figuring out a revenue model that doesn’t devalue music, it probably wouldn’t praise wholeheartedly (as some may have expected it to do) the ad-supported space. Especially since Spotify’s business model is, and has been since launch, more about the mix of subscription and ad supported. The truth, however, is that I feel there’s a bigger point worth making.
The notion of overnight success is very misleading and actually rather harmful to any hope for long term and sustainable growth in this industry. Yet this is unfortunately something the music industry as a whole is particularly good at, expecting business models to be proven within months of inception.
The truth is that even the most successful digital business to date, iTunes, missed its revenue targets in its first year by 30%, and label executives were far from convinced that this was the future. And we of course know how that story turned out with iTunes and the hardware being the defacto digital music business of today.
It would obviously be wrong for me to compare Apple’s success with iTunes to Spotify. We are two very different companies in two different phases of a company’s cycle. I’m also very aware (and we are regularly reminded) of the digital music graveyard where many start-ups are to be found dead and buried. Yet whatever the business, big success takes years to build and there are very few counter examples.
So to make it very clear - we are in this for the long haul. We are committed to building a music service that works across different devices, enables you to share music socially and that gives you the ability to choose how you want to access music. We aren’t interested in just trying to hype the company and then “flipping it”. The media coverage that Spotify has received so far is because of the product. The product has been our core and our main marketing message, and perhaps now is the time to modify that message.
Someone asked me a while back, during a fireside chat, what was the biggest mistake I’ve made so far with Spotify? I can’t recall my answer, but I’ve since thought more about the question. I would say that the biggest mistake that I’ve made is that Spotify, unlike any of the other businesses I’ve been a part of, depends on our partners (artists, composers, labels etc.) and I haven’t always acted with this fact at the forefront of my mind.
If we’re asking the industry to change, we need to be transparent and honest about the end goal - especially since we’re asking everyone to make a huge leap of faith to an unknown place where you could potentially argue that the industry risks its most profitable customers. We haven’t been as open as we could have been up until now, and that’s been an oversight on my behalf.
So I thought during our one-year anniversary as a service that I would at least partly correct that by sharing our view on the future for Spotify and the music industry.
Starting with the product, I must admit that I’m (almost) always encouraged when I hear people complain about the service, because it means that people care. It is clear to me that our product is far from perfect and needs to evolve significantly, but the fact that people are giving it so much thought tells me that we are at least roughly headed in the right direction. Spotify shows a lot of promise, but it’s still a work in progress.
There are a couple of focus areas for us now in terms of developing the product. Besides better monetisation, those areas include better library handling, making Spotify socially capable as well as significantly improving our portability.
In terms of monetisation, we’ve admittedly not made it easy for our users to buy music. That’s an area we need to improve, but at the same time I want to come back to the point I made earlier that the notion of overnight success is misleading, we’re only at the beginning of our journey and I’m dedicated to moving even faster than we have already. We are far from satisfied with where we are now, but at the same time it is important to realise that even though we are only a year-old service we have already passed some milestones that separate us from most digital music services.
We are probably Europe’s biggest paid subscription service with hundreds of thousands of paying users; we are one of the biggest affiliates to music downloads (despite 80% of our users unaware that they can actually buy music); plus our advertising revenues have now passed the millions of Euros per month mark.
However, none of this matters unless we can continue to enjoy the support of our users and partners. So we ask you all to have patience because we know we’ve yet to figure out the differentiation between free and paid, and we know we need to make it easier for our users to pay for the music that they love and so dearly want to enjoy. We are working tirelessly, though, to improve Spotify and to make it the platform we know the music industry needs.
Because the music industry that I envisage is a business that has the potential of becoming a $40-50 billion industry and growing stronger than it ever has, I think that by increasing the streams to the trillions on a monthly basis that we can take big chunks of people and move them from illegal file-sharing services to legal services.
However, for that to happen, the industry needs to think outside of the box and realise that the new business model in music is a mix between ad-supported music, downloads, subscriptions, merchandising and ticketing where the user comes first and where the key to monetisation comes from portability and packaging access rights.
I believe this is something that most people in the industry can agree to, but it can’t happen if the industry continues to enforce the per-play fees it has tried so hard to hold on to. The new model is about figuring out how to increase the revenue per user (RPU) between the different models - not squeeze as much as possible out of every single transaction. And that is how we can grow the overall business and work to protect a business that is in decline.
Overnight success takes a long time. To quote Daft Punk - work it harder, make it better, do it faster, makes us stronger, more than ever, hour after hour, our work is never over.
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Thanks for sharing your thoughts! /JB (Spotinews blog)
The priority for Spotify going forward has to be changing hearts and minds in the music industry. The music industry themselves are the only weak link in the Spotify product right now. For sure improvements can be made to the client, new features added and more platforms supported, but if the content isn't there it counts for nothing. The per-play fees are the most important issue for Spotify as a business, but are largely irrelevant for customers. What customers want is: - All content to be available globally. - Releases of new content to be made globally and at the same time. - For content to be removed from the catalogue only as a last resort and not just because of some inefficient and outdated bureaucracy within the music industry that it irrelevant to customers. If the music industry does not adjust to fit these requirements they have absolutely no hope of seeing a decline in the amount of piracy on the internet. Spotify as a product is 'good enough' everything else now is only bells and whistles or icing on the cake. But what has to change is the attitude of the music industry towards digital streaming. Keep up the good work Spotify, but keep the pressure on the music industry. They have to change!
@digithed - the industry has changed enormously over the year that we've been live and have been very open to changes so expect more good stuff. Rome wasn't built in a day. :)
In a global european market it doesn't make sense to prohibit the use of Spotify in all the countries. I am French, leave between Spain, France and Switzerland and can´t open Spotify in Switzerland. So stupid! When will it be possible???
Beautifully written! Good luck in the future Daniel, keep up the good work! Don't let Ludde drop out!
This must mean that it's now a year since I started my subscription. I haven't regretted it for a second. From the moment I first tried Spotify I knew that this was it. Finally, someone got it right. Given that Spotify couldn't have happened without industry co-operation, it's ironic that the one piece of news about Spotify that has actually bothered me was when I found out that the majors own a large chunk of it. Apparently, all you have to do to cause that reaction in me is spend ten years desperately trying to stop the future. Although it seems clear by now that the tide has started to turn, a certain industry has a long way to go before I start getting a warm fuzzy feeling at the mention of its name. I hope things keep moving in the right direction. Here's to a great second year (with Squeezebox support and more public APIs :)! skål
I still want to own my music, and so I find it too hard to stomach paying the Spotify Premium fee on top of the money that I already spend on downloads. I suggested a model whereby users could pay a small price per play and then optionally "upgrade" to download the song/album, with a discount equal to whatever they had already spent streaming it: http://getsatisfaction.com/spotify/topics/a_pay_per_play_pricing_model Napster's new business model (£5/month for unlimited streaming *and* 5 downloads) is also very compelling to me.
I would dare to say that Trent Reznor's RPU (or RPF = revenue per fans) is one of the highest in the industry and he is also the first one to tell any record label to f*ck off. It is great to see this service develop, but please don't forget that the artist is your most important partner. We are fans. We want to give. We went to piracy not only because it was free.
I love the service!! Thanks for the last year, but i am also troubled with the fact of limitation on country border level in the usage. Most of the illegal traffic is usually from non-spotify allowed countries. Well anyways "digithed" said most of the stuff i think many people are waiting. I believe you are in the process doing all that in a time-line, which is not known to outside people. I would like to know some road map visions for Spotify. I mean expansion means more users and more streaming capability to be available, so quality of service is then the key issue in that i think.. :). About the paymet of the service i am totally fine with a flat-fee model without ads, since i listen to chosen music randomly like my own radio-station. I like also to be recommended similar type music, so i find new artists. But i totally hate to be fixed to a selected music, which i would buy and then listen. I need music per situation and mood not by artist.. ;)
Interesting reading! If only the industry could stop using insane levels of dynamic compression so people can actually listen to all the great music that is released today. END THE LOUDNESS WAR! (which spotify makes obsolete)
congrats for your excellent work!!! can you please send me an invite i need 1 for my girlfriend osvaldo_glz@hotmail.com thank you guys.
Spotify is the Revolution of music, all over again ^^ Love The Quote
Je crois trés fort en ce nouveau mode de diffusion musical. Very good work ,and thanks for us , the lovers of Music.
@kevin7211 - Although I am based in the US, I've been fortunate enough to have a Spotify account for many months. Having spent one third of my life in the music business, it is inspiring and refreshing for someone like Daniel Ek to come along and innovate the industry in a way that's never been done to date. I was fortunate enough to read Gerd Leonard's book called The Future of Music about 4 years ago, it was upon reading this book that my life and career has changed forever. Spotify was not a reality at the time this book was written, however, Gerd Leonard's prediction of a Spotify like service is quickly presenting itself with Spotify. Separating the business side of Spotify and focusing on the consumer and user experience, every time I fire up the Spotity application on my desktop I know that I am going to go on a quick journey, discovering something new EVERYDAY! Not only has Daniel and his team created an amazing service, but Daniel is proving that today's CEO has to be completely open, transparent, and willing to take criticism, which Daniel eloquently displays in this post. Congrats to Daneil and everyone at Spotify! www.twitter.com/kevin7211
Thanks for sharing your thoughts and a amazing product! My reflection to think outside of the box and realize that the new business model in music... Is how about a special Spotify Premium for students? It could cost approxamently 49 SEK as long as you can verify that you are a student.. Then the user comes first and we would satisfy the "generation Y" that is a big part of the future! / Viktor (@mecenat.se and csn-kortet.se)
Why do they call it beta? ;O ben a lot of builds since the first realese.
I was surprised to see such an honest post about spotify and it's future, I love it. I've been using spotify for a long time and it already has changed my life significantly since music plays a big role in my life. It's really hard for a normal guy who knows very little about the music industry to understand why the subscription model is so hard to reach. I had been dreaming about it for a long time for music and HD video content, and spotify really opened up the future for the music lovers. I really hope that spotify and the staff reach their goal, I know it cannot been easy to get to where it is today. Thank you for your thoughts Daniel!
Yeah, indeed good work with Spotify. A product like spotify can always be improved. And the music catalogue feels a bit more stable today than it was in the beginning when half a playlist could fall out because of rights. I love to recommend people to get spotify, i teach people how to use it. Give out invites, but the main problem for my friends is the country rights. Just a couple of minutes ago i tried to give it to a friend in austria. But spotify wasn't avaliable there... So the main focus on the product is working with the rights in the music industry. Good work girls and guys. Love the product and deleted iTunes nowadays on my computer and saved 20 gigabytes of music i can stream thanks to you. Loads of love from Stockholm
Record labels shouldn't exist. Artists should be able to sign with spotify and get the whole piece of the cake which belongs to them, not the labels.
Congratulations on all success. I have only one wish... A "shuffle button" by the playlist, so one can shuffle the order of a playlist to not get tired of it. Thanks. /B in Stockholm
how much do artists actually get paid for each play on spotify? is it 1 cent a play or something?
Damn! When are you goin' to release Symbian app? Nice thoughs thou =]
Congratulations with the first year! May there be many more to come! After I became a Spotifyuser last year, an now also a premiumcustomer, I have not downloaded a single song illegaly. Not that I was a big pirate, but still. I am probably not the only one, and this should be a big incentive for the recordlabels to keep supporting Spotify. A tip for improvement is to let unsigned artists upload their own songs, so that they can distribute their music more easily. If you need to hire more people to this, then contact me, PLEASE!!! Again, congratulations, and keep up the good work! I LOVE Spotify!
Daniel, I thoroughly enjoyed reading your post. And I recently read Bob Lefsetz's review, and couldn't agree more with his positive feedback. Particularly, and this comes through in your own writing, your commitment to finding a solution which is sustainable. One thing is clear, something must change! The economics of the entire industry are puzzling at the moment, an imbalance is present. If I may be so bold, I'd like to suggest that the "imbalance" may not be solved by extracting more revenue from consumer licensing. Rather that, an equilibrium will be reached, when the licensing fees are dwarfed. The question becomes, why would content owners ever want to take less per license (and why should they)? And the answer that I would like to discuss with you, in person, stems from the same line of thought that you were discussing... overall RPU. In the future, content owners will be satisfied to earn less on consumer licensing fees because they will extract sufficient funds from consumers in more modern ways. I do not wish to say that consumer licensing is dead. Only that I believe it will play a slightly different and smaller role in the coming decades. Your partners will be satisfied with smaller, more sustainable licensing fees, when they have adopted other modern solutions for monetizing IP. Sincerely/MVH, Ray http://musicgivesback.blogspot.com/
Nice article. Congratulations on the anniversary and good luck for the future. Spotify has completely transformed how I listen to music. The more labels and artists that come on board, the better it will get. Stu
Congratulations on your anniversary. When will we see digital gift cards? The gift card page has been out of stock for months! Is it possible to buy the codes from pressbyrån and 7-11 in sweden and use them in other countries?
Hi Folks, All my friends have Spotify so I have a few spare invites. If anyone would like one please email me at andreww3362@yahoo.co.uk. Happy Birthday to Spotify and may I wish you all continued success. Just listening to, and enjoying REGINA SPEKTOR, who I would not have discovered without you. Along with so many other artists. You are well worth £9.99 a month. Thank you.
Nice post Daniel. Great to see the progress and good luck with the next stage. Hopefully this will quiet the naysayers.
Thank you for this message and statement. A great first year and I wish you all the best in the future, I will continue the journey as a premium user. Best regards: Spotify user: metalually.
I hope there will be an equivalent to iTunes' Genius? Something like an option to click "get 1000 songs like this" based on what users typically have on their playlists where the currently playing song is in. Also, on Mac OS X Snow Leopard, why it's impossible to pause or play Spotify with the F8 alternative play/pause shortcut key without the iTunes showing up? - Though I think it's more the Mac OS's fault than Spotify's - anyway, it's annoying.
Artists: 367307 Albums: 442663 Tracks: 4991643 available in Sweden. No surprise that you can find some with wrong tagging. But where do I report spelling corrections and and mixed-up album titles? For example: Joan Armatrading's album "Into the blues" contains music from The Roches album "Moonswept".
Really well written Daniel. I'm one of the many who have converted from illegal file sharing to this amazing service, and am happy to have done so :)
where can I see how many tracks are available in a country ? Can I see the catalogue too ?
4 things I really want from Spotify. 1) ALL the music I love to be available. A lot of it already is, but a lot of it still isn't and Napster still has twice the number of tracks as Spotify 2) I would like to be able to hear Spotify everywhere and not be restricted to listening via an expensive 3G mobile phone which I have yet to purchase. It would be great if Spotify could work with innovative companies manufacturing next generation internet radios e.g. Pure, Revo to make Spotify widely available on future portable internet radio's plus personal stereos - imagine a small easy to carry Walkman type device that plays digital radio, internet radio and Spotify that works on both WiFi and 3G and allows you to play Spotify offline too and is reasonably priced too so that you could happily take it anywhere unlike say an iPhone. And how about being able to listen to your customized Spotify station through your car radio via 3G and also offline where 3G is not available? 3) Customized ads - Give listeners the ability to choose the type of ads that they want to hear on Spotify - Advertisers will love the opportunity to personalize their ads and so will listeners. For instance I like to hear ads about new music or what's on at the cinema so I would choose to hear those. Someone else might like to hear ads about holiday deals, another person might like to hear ads about special offers in supermarkets and another about new cars. Also you have to sit back and just listen to the ads and wait until they're finished - Spotify requires broadband anyway so why not allow the option for Spotify users to watch video ads in their player instead of listening to audio ads and make them interactive too? People don't mind watching ads at the cinema - seeing cinema type ads through your Spotify player wouldn't be a bad thing and would probably make Spotify loads more money than just the audio ads. 4) Music videos - how about having the option to not just hear a Spotify track but to watch it too and an option to only play those tracks on your playlist which have Music videos so that you have a seamless visual experience through your Spotify player? At the moment everyone goes to You Tube to watch music videos (usually in low quality) - why not allow people to stream any music videos they want through the Spotify player too? The possibilities are endless! ;) By doing all the above I think Spotify's long term future will be secure.
Guys, don't kid yourselves. I'm a premium user, and to be honest your in danger of taking one of the brightest new brands and turning into a duffer before you've started. Why - because the idea (great) simply isn't supported by the implementation. The iphone app is woefully non user-friendly and has taken the rare step of providing an update which fails to make any significant progress and in fact makes things worse. How much am I enjoying consuming all my bandwidth downloading again the tracks I'd already downloaded once? Someone is going to come along and do these better, or cheaper, or both. Take care of your existing customers today.
heja Gnaget!
Lotsa words for a few thoughts! Don't like the idea of iTunes Genius. Next thing, we will having technology listening to our music of us [instead of us listening oursleves. Isn't half of the enjoyment of sound in the act of discovering tunes that hit our buttons by accident, word of mouth or exploration. Though I appreciate technology -- I do think it important that we walk down those paths ourselves, taking our own turns and diversions without having iTunes Genius or some other such programme defining the paths for us!
I have only recently subscribed to Spotify and find it fantastic. Congratulations and please keep up with the work. I told family and friends in Germany about Spotify and they were all asking when Spotify will be available in Germany. Sure, the market for potential subscribers in Germany is huge. Lastly I wonder why there is only 1 Album of Silvia Droste available ?
Thanks for the inspiring words. About your quoted quote: Overnight success takes a long time. To quote Daft Punk - work it harder, make it better, do it faster, makes us stronger, more than ever, hour after hour, our work is never over. Here is what 4 guys can come up with Spotify and Daft Punk an saturday evening. http://www.youtube.com/watch?v=Sltkh4QtI3U
Good luck! I hope the industry will maintain their faith in this project and you'll become profitable and stand on your own legs for a safe haven of music to turn to! :)
First off. when spotify first launched in 2009 (during resession) the music industry wasnt too good. i admit i did take alook at Spotify and i was wondering about purchasing a subscribion. i hit the buy button but then shock!. paypal and debit cards where not accepted!. we kept asking and asking and i had given up (i switched to a differnt site) then one day hey lets take alook. (nothing on the spotify blog to say paypal is now accepted but hey) and then wow a paypal button!. im now subscribed to spotify and i love and have loved every second! keep up the great work spotify and we dont want you to disappear too quickly!.
I love Spotify and am a Premium customer. I think that there should be a bigger difference between the features available for paying versus non-paying customers. This will attract more Premium users and in the end more music and services. Have you considered lowering the subscription rate to perhaps half of the current? This may be the key to attracting a lot of younger listeners, students etc. to Premium. Another option would be different subscription rates depending on how much you're listening. 25, 50, unlimited number of hours per month etc.
Spotify is great in my opinion. If there is one thing I don't mind spending £10 per month on it is music in such quantities that's for sure. One additional feature I would like to seeon the player and that could well only be available for premium subscribers I think is a crossfade option. That would be wicked. Thanks for the Android app too, it's great.
Thanks for sharing your thoughts. I'm still a free user, but once the Symbian app is released I'm going premium. Any hints on when this app will be released would be great! Also, as you mention, better library control would be great. I'm missing a 'my artists/albums' funtion..
Thank you for those thoughts! Tack för de tankarna! Jesper
"We haven’t been as open as we could have been up until now, and that’s been an oversight on my behalf." I am still waiting to see if I should become a subscriber. What bothers me is the "normalization feature". You have decided that customers have no business knowing what processing you filter the music they hear through. It is your intention to deprive your customers the ability to listen to the music the way the artist meant it to be heard, no doubt because you have settled on a listening experience you figure serves your business goals. Granted the technically inquisitive can find the preferences page and tun it of,(unless you have a PPC mac, the bug is still there)but you prefer to keep your customers in the dark. So lets hear it then, extend the courtesy you promise "the industry" to your customers and come clean about the "normalization" feature, what it technically does (any compression eq and limiting in there?) and the motivation and thinking behind it. Honesty is in this case the best policy. Peter
I hope you are taking notice of Mog who have just launched a very similar service to Spotify in the US at only $5 per month; http://mog.com/david_hyman/blog/1534743
Spotify is beautiful. Your platform is amazing - not only is the music superb, but the amount I have learned through Biographies and Reviews is astounding. Someone from a label once said: "Listening to the music you want to listen to is not your right". I agree, it isn't.. it is a privilage. Thank you Mr Ek for giving us this privilage. You have improved my quality of life. I'm more into music now, as a result of your service, than I have ever been. Hopefully the music industry will realise the profound impact this services has on so many peoples lives and understand that this is the only way forward.
Take a look at this: Awesome pop spanish band Los Besos del Corazón (Kisses from the heart) Lets support spanish bands! Why isn't this band at the Spotify catalogue? http://www.youtube.com/watch?v=1dz7DhPnjds
Daniel I think Spotify is Genius. Economics of price vs demand are preventing me from paying £10 per month for ad free 320kbps streaming. But at £7 per month I'd sign up. How many 1000's of other paying customers feel the same as me? You do not know. Why not asking non-paying listeners via your ads. Do the maths. Maybe you can accelerate spotify's monetisation and really be THE alternative to pay per track myopia.