Indianapolis, IN - August 1, 2011
A new competitor from across the pond has entered the US music market. It's called Spotify (www.spotify.com) and it's billed as the "largest and fastest growing service of its kind." Which may be true, in a technical sense. Spotify has enjoyed considerable success in the European market and they have employed a brilliant (though perhaps overblown) strategy to enter the US.
Taking advantage of our basic desire to be part of the insider crowd, Spotify has launched here on an 'invitation-only' basis. The strategy has worked well in the past, essentially creating the mystique that something new is rare and therefore worth having, which helps to elevate demand. Google did this with GMail several years ago and again with their new social networking platform, Google +. The marketing team at Spotify no doubt took note of this success and wondered how they might improve the strategy. Which is where they missed the mark.
Instead of rolling out slowly, Spotify seems to have struck deals with anyone with a pulse to offer "exclusive" invitations to join the service. Coke, Klout, Chevrolet, and Motorola, all sent me offers for a free account. With all of these invites floating around, it seems to have lost some of it's exclusive panache, but that hasn't really stopped people from creating accounts and checking it out. It should be noted that Spotify has three different account levels, Free, Unlimited, and Premium. All of the invitations (at least those that I'm aware of) are for a free account.
So, marketing snafu (or genius ploy) aside, what is Spotify, how is it different, and should you care? The answer, as with most of these new services, varies a little depending on who you are and how you might use it.
The cool thing about Spotify is that your account will let you tune in and listen to "any song, anywhere, any time." The service claims to have access to 15 million songs, all available to listen to on your computer. You can also import the MP3s you already own, but it seems like they should already be included in the 15 million, wouldn't you say? As I mentioned, Spotify has had some success in the United Kingdom. Over there, the free account has some limitations: Ads play during your time streaming, and you're limited to how much time you can spend on the service. Initially, (to get you hooked, I presume) you get 20 hours of streaming for free and then it lowers to 5 hours a week. After six months, the weekly allocation drops again to 2.5 hours. Also, each song (unless you have the MP3 loaded from your own library) can only be streamed 5 times. Bump up against any of these barriers and the service prompts you to upgrade to one of the paid versions. It's unclear whether these limitations also apply to the American service, but I would expect they would; if not initially, then at some point in the future.
In addition to the Free account, the service offers two paid plans, Unlimited ($4.99/month) and Premium ($9.99/month). With both of the paid versions, the advertising is eliminated. The Premium version takes things a step further by enabling you to move the music from your desktop computer to your mobile devices. It also provides an "offline" mode for both the mobile and desktop applications that allows you to play select playlists without an internet connection. The offline mode is a nice touch, and could be a differentiator for the service. In a sense, it allows you to "own" as many songs as you like, as long as you're a paid subscriber.
All accounts have social media integrated at the core and operate under the premise that music is meant to be shared. It's simple to send a link or playlist to your friends (either individually or as a group through Facebook or Twitter) and they can listen instantly. Spotify claims that this social integration is a great way to discover new music, but that claim falls a little short for me. Yes, I can search for and listen to any number of 15 million songs, but I have to know what I'm looking for. The "discovery" process is really limited to finding things that my friends like or share, which doesn't seem either as compatible or as powerful as Pandora's use of the Human Genome Project, where each song I like helps the system automatically play other songs I'm likely to like. (For more on this, see my previous article about Pandora here:)
From a usability perspective, the desktop version has a similar look and feel to Apple's iTunes, so it's instantly recognizable and easy to use. Overall, I think Spotify will make a big splash, if for no other reason that it will get to ride for awhile and the "latest and greatest" train. There are other competitors already in the market, however, including Rhapsody (www.rhapsody.com), Grooveshark (www.grooveshark.com), and my continued favorite, Pandora (www.pandora.com), most of whom already have a loyal user base and similar features.
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