Snowcrashing

Spotify To Napster, Like Amerigo to Columbus?

Posted on 12. Oct, 2009 by Antonella Stellacci in Music Industry Trends

Columbus – which America celebrates today – was a disruptor but he didn’t really know to what extent. He dared challenge the ocean for 36 days, and landed on what he thought was India. He lived with that belief. And changed history forever, for the better or the worse.

It was supposedly Amerigo Vespucci, who realized that it was a new land, and the German cartographer, Martin Waldseemüller, named it after him: America.

In the music industry, it was Napster, 10 years ago, the one to open the gate of the digital innovation to an industry plagued by payola, fake talent, and the monopoly of a few ultra-billionaires. By disseminating the digital culture inside the music business, Napster initiated a disruption that his creator was probably unaware of.

In the years after Napster, the very concept of music distribution, marketing, copyright, music ownership and consumption have profoundly changed. Daniel Ek, from Spotify, wants to be the Amerigo of that revolution and wants consumers and industry players to follow him. He is not an innovator as Shawn Fanning was, but he might end-up linking his name to the final acts of the digital music revolution.

From a consumer standpoint, Spotify for the first time has fully embraced the concept of music in the cloud vs ownership- which was a legacy of the physical world.  The pillars of the Spotify product and marketing strategy

• Streaming as the core of the music experience. Your music library is ubiquitous, as it has to, in the post-Walkman, post-Napster generation. Sharing, Collaborative Playlists, Scrobbling for finer recommendations are nifty features to make the experience social and the discovery personalized.
• Mobile as key enabler of the freemium membership, because that’s where scarcity springs, not online with the gazillions of BitTorrents.
• Free and Freemium as complementary models because music is not a one-way funnel of conversions. The targets tend to infinite: from the teenage  girl who was born wired to her cellphone to the music freak who listens to music non-stop downloading BitTorrents of anything digitized in the last 10 years.
• Impeccable quality: a p2p tech system that makes the streaming experience almost as good as in real-life, high quality sound, and a higher one for finer ears willing to shill 10 pounds/month along with other compelling perks as the mobile access.

The challenges: consumers are still in a limbo between the physical age where they were hard-wired to the concept of “owning” music as the ultimate music experience, and the digital age, where bits are defiant of any ownership, copyright, and ubiquitous.  The post-Columbus age is not one to happen overnight, the shift takes time. But Daniel Ek knows it.

From a business standpoint, it would be easy to assume that money will follow the value and believe in all the “feels like free” speeches. But the reality is somehow harder, record labels don’t want to admit to shrinking revenues, and pretend to ignore that streaming is a marketing channel.

Will Spotify succeed in its ambitious conquest of the new world under those terms? Some are warming up already to sing its death song, others elevate hymns of liberation from the Itunes monopoly.

Time will tell. What seems certain is that the biggest threat, given the level of sophistication and superiority of the service,won’t come from consumers.

Tags: Spotify