Why Spotify will be worth the wait
Spotify is a web platform that allows users to stream music, offering a real time, no-buffering-required listening experience of a vast back catalogue of music. It makes it easy to listen to millions of tracks on your desktop or on mobile, and crucially it makes sharing those songs and discovering new ones a seamless experience.
I’d argue it offers a way of connecting with music fans that other platforms, advertisers and record labels themselves have lost. And it’s timely – the overall global music market decline is at around 3%, sitting at $16.2bn last year. Shortlisted for Best Overall Startup of 2011 by Techcrunch, Spotify is claiming 12 million subscribers, three million of whom are paying to skip ads or download content to mobile thanks to Spotify’s various payment tiers. Obviously that’s not straight profit for Spotify; it means a return for the labels who have licenced their archives of music, and it means a return for advertisers who benefit from targeting users via demographic data as well as by music genre.
According to Kate Vale, new MD of Spotify Australia, the audio ad has been very effective for brands elsewhere, “they work incredibly well to target highly engaged listeners. Jaguar in the UK targets men aged between 35-50 who listen to classical jazz, and that works extremely well for them.”
Another reason for this engagement is the crucial element of discoverability. Unlike iTunes, Spotify’s open nature means users can compile playlists and share them easily. Spotify’s social dimension is paramount; the Facebook and Twitter integration is genuinely very smooth, and means that you can create connections and share music with anyone. It offers a Pandora style radio station function that generates playlists based around a particular artist, but the main focus is on what my friends are listening to. I very much enjoy the eclectic selections that iTunes Genius offers me, but this is only a juxtaposition of records I already own plus suggestions created by an algorithm, whereas I primarily look for recommendations about new music from people I know and trust.
It’s open and syncs easily with the social web, and gives us that feeling of serendipitous discovery that reminds me of the heady days of the mixtape.