Spotify Australia MD Kate Vale says Australian streaming market ‘absolutely not sustainable’





The global creative head of Spotify and the local managing director joined Mumbrella this afternoon to talk about marketing and creativity on music streaming sites, and the state of the Australian market.

Spotify, which launched in Australia in 2012 and claims over 24 million active users and 6 million subscribed users globally is one of a number of music streaming services to launch locally in recent years with international offerings including iTunes Radio and Pandora competing with local platforms such as iHeartRadio, Rdio and Mog.

“It’s absolutely not sustainable,” Vale said during the hangout when quizzed on the state of the streaming market in Australia.

“The Australian market is pretty attractive to launch this many players into the market given that we’re the 6th largest music market in the world we obviously spend more per capita than huge countries around the world. What we do see in most markets, it’s not sustainable and it does happen in a lot of markets where there are a many players initially. What generally happens is three or four players maximum will succeed.

“According to Nielsen at this point in time we’re around 70 per cent of the streaming market, so I’d like to think in a few years time we’ll be one of those survivors.”

The platform is continuing to grow, with launches throughout Asia.

“About a year ago we launched in Hong Kong, Malaysia and Singapore and we’ve just recently launched in the Philippines and we are definitely looking at growing the number of countries we’ve launched in Asia and I guess particularly important is now we’ve got a mobile offering and mobile is so huge through Asia,” said Vale.

“I can’t comment on how quickly it’s grown because we don’t give away numbers but I can tell you we’re having huge success in Asia.

“We are already a serious player in this space. In many European countries we are ahead of iTunes now in terms of the money we’re generating for the artists, the labels and the industry and we’re second behind iTunes globally. You can see the numbers for streaming, the growth is huge and we’re starting to become really significant for the entire ecosystem. Last year alone, in 2013 we gave back half a billion dollars to the industry and since our inception one billion dollars so half a billion in one year is very significant.”

Frankel spoke about the company’s recent acquisition of tech company The Echo Nest.

“A couple of MIT PHD guys who built this smart company which has been able to look at understanding the meta-tagging in ways the labels have never thought of and we’d never be able to do on our own,” he said.

“We tend to think about our analytics based on what we can understand which is how our users behave but these guys take a completely different look. They take a pop song and divide it into really interesting taxonomy on the genre.

“They can can listen to song in two-and-a-half seconds and tell us more things about the song than we thought was possible. They scour the web everyday so they understand the genomic insight around the song and then they look at all the social around the song.

“That’s a ripple that’s going to make a difference technology wise. It’s going to fuel much better discovery tools for our audience.”

Frankel joined Spotify in 2012 as creative director, working with brands to develop campaigns for the platform. Prior to that he had a varied career as an advertising and creative director for several major record labels, was one of the marketing team which launched MTV in the US, and has  directed Grammy Award wining music videos for scores of artists including Sting and Janet Jackson.

More recently he joined Ogilvy & Mather as the first executive producer in their entertainment unit which specialises in holistic branded content for brands, and co-founded marketing consultancy Indigenous in 2010 which specialised in creating original content and experiences for media companies to offer to brands looking for deeper engagement.

Vale joined Spotify in Australia in 2011, and has managed the platform’s launch to both listeners and advertisers in the local market. Prior to that she was Google’s first regional hire, starting the sales operation for the search giant from her living room in 2002 to what is now Australia’s largest digital business. She then joined YouTube in 2009 building the team and brand in the region.

The hangout was broadcast live on this page at 2pm AEST today, with questions put to Frankel via the comment thread below and via Twitter using the hashtag #askspotify.

This Thursday Spotify is hosting a Partner Summit in Melbourne for advertisers and brand partners. At the event Frankel will be chatting more about innovation, the platform, brand partnerships and opportunities, best-in-class case studies, and the future ahead.

For more information you can email or visit the event website.


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