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.

Napster started the music revolution 10 years ago with its file-sharing network. Today’s announcement on the roll-out of a $5 subscription for 5 downloads and unlimited streaming might not sound as epic.

But the fact of the matter is that it officially sanctions the shift from Downloads to Streaming.  From Ownership to Access.

We are not yet into the full-fledged Access Era as depicted by Caraeff and Masnick with interactive listening and your library in the cloud.

And this is yet a model from the past – the subscription- which has hardly won the music fans. But it is a step into the new era where listening comes first and then there is Upselling of additional and targeted value added services.

Spotify is leading the way – at least on paper, even though the balance sheet might not look too nice, as of yet.

BREAKING NEWS

French National Assembly Adopts 3 Strikes Law

iLike Launches Custom iPhone Apps, Syndication Platform To Help Artists Connect With Fans

Imeem About To Expand iPhone Music Storage By Way Of The Cloud

—-

OPINIONS AND REPORTS

Seth Godin: Another View Of Free

Bruce Houghton: Despite The All The Gloom And Doom I’m Still Optimistic About The Music Industry

Is the Long Tail really long?

Not just a matter of semantics:about “pirates” and “theft” in the music industry.

Spotify CEO interview ortability and subscriptions to a social music experience as key future developments.

FACTS

Live Nation looks to ticketholders for more revenue

The Biggest Music Sites Online?

Music Industry So Weak You Only Need To Sell 83,000 To Be No. 1

Pandora Mobile In Numbers.

BREAKING NEWS

A week dense of social networks ‘ announcements

FACEBOOK COLONIZATION

April 28th is a date to remember. Facebook launched the Open Stream API: it’s the start of the Facebook experience extending beyond the Facebook walls. Now any developer can create new applications incorporating the real-time stream.

One of the first apps to take advantage of this new API is Seesmic Desktop.

Another example is a demo of Silverlight+ Facebook Stream, that has wowed the lucky Techcrunch viewers: Microsoft Shows Off The Power Of Facebook’s New APIs

For a technical review of the Open Stream API, check Nick O’Neill’s post at AllFacebook.com

More on the business implications thanks to NYT Brad Stone Tinker Away. Facebook Says

For a less enthusiastic review, Marshall KirckPatrick Despite New Openness, Facebook Remains Fundamentally Closed

MYSPACE AND PLAYLIST

MySpace has a new CEO, former Facebook executive and Playlist CEO, Owen Van Natta. WSJ.com: Taking Helm at MySpace

Playlist names former MTV veteran as new CEO: MTV Vet Sykes New Project Playlist CEO

TRENDS

MUSIC SPONSORSHIP SPENDING

Music Sponsorship Spending at an all time High in 2009

AD SPENDING IS OFFICIALLY NOT RECESSION-PROOF

TechCrunch: The Online Ad Recession Is Officially Here: First Quarterly Decline In Revenues

MORE TWITTERS, MORE QUITTERS?

Nielsen shocked the Twittersphere this week by reporting that Twitter shows that some come but never come back, yet the small community is indeed very influential.

See also Pete Cashmore at Mashable: 60% of Twitter users quit within the first month.

GOING UP, DOWN AND UNDER

UP- HULU AND VEVO: The Gold Race to monetize music videos is on. Wired’s editor,Eliot Van Buskirk, reports on the Next Music Battle: Hulu vs Vevo

UP-HULU AND DISNEY: Hulu is becoming the preferred distribution channel for the big media companies. It just got major buy-in from  Disney that is now an investor, joining News Corp and NB.

Who should worry more? YouTube or Apple?

UP AND THUMBS UP-COLDPLAY,JOSH FREESE &DE LA SOUL

More artists experimenting with innovative models

-Coldplay will give away a free nine-track live album, LeftRightLeftRightLeft, at every gig this year. MusicAlly

-Legendary Hip-Hop Trio De La Soul works with Nike for a new Music Release. AdAge

-Josh Freese is getting ready to release self-release a solo album and has been attracting some attention because of the unorthodox pricing model he is employing.

UP AND THUMBS UP-SLACKER,SPOTIFY,PEOPLE MUSIC STORE&THINKINDIE:

More success stories for a few new music start-ups

-Slacker Radio hits the 1million downloads on the BlackBerry. Billboard.biz Q&A: Slacker CEO Dennis Mudd

-Spotify continues to recruit music fans at a rate 40,000 users/day. MusicAlly: Spotify has more than 1mln users in the UK

-People Music Store has signed a deal with UMG. Good job! Hypebot

-ThinkIndie.com launched today as the music download destination for  Coalition Of Independent Music Stores’ (CIMS) indie music retail outlets. Hypebot

DOWN

-France Reintroduces 3 Strikes Bill. UK Says No. Hypebot.

-Artist advocacy group The Future Of Music Coalition has released a new report “Same Old  Song” confirming that indie music is not getting its fair share of airplay on broadcast radio. Hypebot

DOWN AND THEN UP – SEEQPOD

Seeqpod CEO announces imminent acquisition. Wired

SOCIAL MEDIA

-TopSpin Ian Rogers has an amazing post on how musicians are experimenting with Twitter as a music platform and direct marketing channel

-Top 10 Twitter Tools For Musicians. Hypebot

-7 SEO Tips for Musicians. Hypebot

-Provocative advices from Eric Herbert. Forget MySpace: How To Build The Ultimate Website To Interact with Your Fans

OPINIONS AND MUST READS

Is A&R Still Necessary in Today’s Music Industry? Jim Markunas at MusicThinkTank

Resnikoff’s Parting Shot: The DIY Utopia… From the editor of DigitalMusicNews

Is MySpace becoming Windows of Online Music? Matt Rosoff

Music Is Not Like Water Fingertip

Your Facebook Profile Makes Marketers’ Dreams Come True Wired

100 Days of Data TopSping

Related articles by Zemanta

• AOL, MTV alums join MySpace’s revamped exec team (news.cnet.com)

BREAKING NEWS

ONE BILLION DOWNLOADS FOR THE APPLE STORE

Apple’s numbers are worth noting, because the company reported 800 million downloads just a month ago, and hit half a billion back in January. iTunes, on the other hand, took two years to reach that number of songs downloaded. The all-time top 20 apps sees Facebook and Google Earth climbing past Pandora to become the top free apps, followed by Pandora, Tap Tap Range and Shazam. [VentureBeat]

TRENDS

SPOTIFY CEO INTERVIEWED BY THE GUARDIAN: MUSIC FANS WILL BUY MUSIC

“If you truly connect and empower your fan base, people will pay for music. Perhaps that revenue won’t come primarily from selling records, but ad-supported music services, subscription music, downloads, merchandise and live shows as well as CD sales are all going to make money for labels and artists,” the head of Spotify, Daniel Ek, told the Guardian. “I think the music industry as a whole can be in a better position than it has ever been,” said Ek. “There has been a massive shift from ownership to access but people will pay for music if packaged correctly and it offers them something special.”[The Guardian]

MONETIZING SOCIAL MEDIA – FORRESTER PREDICTION

Forrester research by Mark Mulligan (free summary; $750 for full PDF) predicts that even though social music may not generate much revenue now,  monetization’s effectiveness must — and will — improve. Social music destinations will continue to build highly engaged audiences and deepen the relationship between fans and their music. But the labels will have to come to a compromise and change the licensing structure for streaming music. [Epicenter]

GOING UP, DOWN AND UNDER

DRM IS DEAD!  ITUNES VARIABLE PRICING IS BORN

As announced in January, on Tuesday, Apple made good on its promise to remove DRM from every song in the iTunes store — a long-awaited move that the labels only allowed in return for Apple letting them price songs at three different points: 69 cents, 99 cents and $1.29. [Hypebot]

Only two days after, and Billboard reports that there was evidence the increases have hurt the sales rankings of songs given the higher $1.29 price.[BillBoard]

SPOTIFY API

It’s a good week for Spotify. Commercial terms were found with PRS [MusicAlly]

And on Tuesday libspotify, the company’s API, was launched to the public, which means that any developer (for approved devices) can build apps that access Spotify’s massive music catalog and use its P2P architecture, which streams Ogg Vorbis files between users like a streaming version of BitTorrent. [Epicenter]

VEVO IS COMING SOON

It’s now official: before the end of the year the new music video hub Vevo will see the light. Google/YouTube and UMG are working together at the new Join Venture and trying to get other labels on board. The big hope is to be able to better monetize music (videos).  Will they be able to get to $25-40 CPM? [Billboard]

YAHOO MUSIC IS BACK

On Tuesday, Yahoo Music launches its redesigned artist pages incorporating music content from third parties:downloads from iTunes, albums from Amazon, streams from Pandora, music videos from YouTube, and tickets from Ticketmaster.  Yahoo hopes this strategy will cut costs, while still providing music and videos for its 20-million-plus monthly visitors. [Epicenter]

LEGAL P2P COMEBACK? QTRAX (RE)-LAUNCH

The ad supported p2p finally “officially” launched last week with all four major labels on board. The subsidiary of Brilliant Technologies originally unveiled their service at the international music tradeshow Midem last year, but it quickly closed down after it turned out the company hadn’t finalized the major label agreements it said it had. Since then, Qtrax has signed licensing deals with all four major labels, and a number of independents.[Billboard]

SONGZA ACQUIRED BY AMIE STREET …SIX MONTHS AGO

TechCrunch was the first to discover that popular music store Amie Street has kept a deal it forged with Songza, a media streaming service, under wraps. The acquisition happened in October 2008 [TechCrunch]

WE7 AD-FREE SUBSCRIPTION AND REWARD SCHEME

We7 is funded by short adverts played at the beginning of each track alongside a paid-for download store. With the new rewards scheme, regular users collect points by spending time on We7 that they can exchange for ad-free days of music. The reward scheme will be followed in the summer by the launch of a paid-for subscription service for ad-free streamed music. This is likely to cost £9.99 for a month or 99p for a day. [MusicWeek]

GUNS N’ROSES AND ROCKBAND

“Chinese Democracy” will be released in its entirety into the Rock Band Music Store on April 14 and gamers will be able to download and play all 13 songs from the record, Harmonix and MTV Games announced Friday [Billboard]

SOCIAL MEDIA

TWITTER MUSIC POTENTIAL

Hip-hopper K’naan is revising his song “People Like Me” using fans’ tweets and the San Francisco sessions vets in Moonalice are planning a repeat performance of their real-time Twitter concert [UnderWire]

TWITTER PARTNERS AND GORILLAZ

No, Twitter Partners isn’t backed by Twitter, but Universal Pictures, Virgin Media and Gorillaz will use its services to launch on Twitter, soon. Supposedly virtual band Gorillaz is the first client to launch activity, promoting the documentary film Bananaz ahead of its theatrical release.[NewMediaAge]

FACEBOOK & PIRATEBAY

The Share on Facebook Pirate Bay feature didn’t last long. The Pirate Bay had recently made torrents more social by adding “Share on Facebook” buttons across its site. The social network  asked TPB to remove the buttons. After being ignored, Facebook is now blocking all links to The Pirate Bay and its torrents—legal and otherwise. [Ars]

MUST READ

Trent Reznor Interview with Wired [TheUnderwire]

MUST WATCH: TRENT REZNOR INTERVIEWED BY KEVIN ROSE

BREAKING NEWS (SORT OF..)

-Google launches a free ad-supported music service in China with the blessing of the labels. [WSJ]

TRENDS

-Why buy when you can listen free?

- The agreement between Spotify and 7Digital sparks a debate on the mixed streaming-store business model.  Glenn Peoples at Billboard views Lala as a possible winner because of its more focused user experience. [Billboard]

-But what do teenagers in the US want? According to a new report by NPD, teens acquired 19% less music in 2008 than they did in 2007. CD purchasing declined 26 % and paid digital downloads fell 13% compared with the prior year. In contrast, 52% of teens listened to online radio in 2008 vs  34% in 2007. Downloading or listening to music on social networks also saw a large increase from 26% in 2007 to 46% in 2008. [NPD Press Release].

-TIme for more numbers with Q1 already over. And the reality is again doom and gloom for the music industry with no Platinum album for the entire first quarter of 2009. Not a single new album sold more than a million copies in the U.S. (enough to win the platinum distinction) [MusicIndustryReport]

GOING UP, DOWN OR UNDER

-Fearing the outcome of lawsuits by Warner Music and EMI, music search engine and playlist generator SeeqPod has filed for Chapter 11 Bankruptcy protection.  [HypeBot] Streamzy which let users build playlists from the songs on SeeqPod and YouTube, is on sale on eBay. [Epicenter].

-After blocking all music to UK users, YouTube is now yanking tunes in Germany, after the expiration of its contract with local royalty collector GEMA [PaidContentUK]. At the same time, Amazon opens its MP3 store in Germany [HypeBot]

-Last.fm is still free. Plans to launch the subscription service worldwide except for the US, UK and Germany have been delayed and Last.fm will focus on accelerating new features as SMS billing [MusicAlly]

-How is MySpace Music doing? Epicenter has an in-depth review. Reading is recommended. [Epicenter]

-What is Facebook Connect for? There are many ways to use it and one of them is to automate file-sharing:that’s what Pirate Bay is up to. Now under each track you can find a Share it on Facebook link! [HypeBot]

-More headaches for Ticketmaster, faced with a new classaction for its secondary ticket market practice. This one comes from the US. [MusicAlly]

GOING MOBILE

-On the AppStore side, some good news for Music Apps: the Pandora IPhone App hit 4 million downloads, AOL Radio 3.6million and other music app stars as Clear Channel iHeartRadio, Shazam, Tap Tap Revenge are not far (though numbers are not confirmed) [DigitalMusicNews]. In the meantime, Lala is rushing to get its app live, but still has some kinks to work out according to TechCrunch [TechCrunch]

-At CTIA RIM launches its new BlackBerry World App and one of its focus will be Music [MocoNews]

-And what is Nokia up to? It’s preparing its app store and it promises it will be a “smart” and “social” one. [VentureBeat interview]

GOING SOCIAL

-The clever team behind MusicMetrics launches MuZoid. a Twitter music exploration application. Send a tweet with the name of a band or artist to twitter.com/muzoid and in seconds you receive a link to a web page with gigs, a discography with price comparisons between vendors, and a recommendation of similar artists that you might enjoy.MuZoid uses MusicMetric’s text-mining technology to provide gig and album information for each artist. The company regularly sifts through data from a database of over 6 million artists. If MuZoid doesn’t know an artist, she makes a note of it and gets busy learning. Once enough information’s available, she’ll tweet back to the original querant with an update.[TechCrunch UK]

-Moonalice will post live tracks from their new CD release show on Twitter. Immediately following the end of each song, Moonalice’s sound team will upload it and “Tweet” its availability! [HypeBot]

-SellaBand, one of the online services that enables music fans to invest in up-and-coming artists, will sell its artists on CreateSpace, an Amazon company via a dedicated SellaBand store [Press Release]. Chuck D, named its US Ambassador, speaks about the project and the importance of being good internet marketers to win in the new digital era of music [MusicAlly]

-TopSpin CEO on the importance of engaging fans as a marketing tool [TopSpin]

Since its launch in October 2008. Spotify has been getting lots of plaudits from users and bloggers.

From TorrentFreak to  TechCrunch, the service seems to have impressed people who have tried it with its speed, usability, and depth of songs. Spotify seems to be the new European Mecca for music.  Yes European only, since it isn’t officially available in the U.S. yet (though a Digg commenter did provide a way for people to try it out Stateside, at least temporarily). Right now it can be accessed in the UK, Germany, France, Italy, Spain, Finland, Norway, and Sweden.

What is Spotify? It  is a downloadable application that lets users stream music instantly from its library. Once downloaded, the service allows users to search its music catalog by artist, genre, or title, and stream the tracks on-demand any number of times.

As with all new social media sites, Spotify offers its users the ability to create and share playlists (a la the now-defunct Muxtape). In December 2008, it also added the ability to scrobble the songs you listen to through Spotify on Last.fm.

The Spotify catalog is huge – notwithstanding some recent troubles – and built with the blessing of EMI Music, Sony BMG, Universal Music Group, Warner Music Group, and some smaller record labels, including most recently CD Baby.

That, of course, begs the question: how does it plan to make money?

Let’s put it in a temporary timeline

-Spotify started off by offering two ways to use its service, a free service sponsored by ads, and a paid subscription service.

-How is this playing out? In an interview to Robert Andrews from PaidContent UK, Spotify CEO Daniel Ek points  at the difficulties of the advertising market and the not ready yet CRM platform as the reasons for a lukewarm start  “We launched probably at the worst possible time in 70 years for advertising”.

-In less than 6 months, Spotify has certainly attracted an interesting crowd of  followers. It has hit the million-user mark, but that’s across its ad-supported free option, £0.99-a-day service and £9.99 unlimited offering. However, according to Mark Mulligan, analyst at Forrester Research, Spotify has found that far fewer users then expected are handing over the cash for a monthly subscription.

Plans for the future?

-Mobile apps to stream and download songs – still in the works. But this is certainly a place to be today, for branding and marketing reasons.

-A celestial juke-box (a la Lala and PlayAnywhere). This is going to be huge and who wins this market, has the chance to be the next ITunes!

-Click to buy links. And that’s happened today thanks to a partnership with 7digital.

Initially only single songs and albums will be available to purchase but eventually users will be able to buy entire playlists from the store. The buying option will go live first in the UK and Germany, France, Italy and Spain. Sweden, Norway and Finland will follow in a few weeks time. No prices have been given for the price of each 320kbps MP3.

To quote Mark Mulligan again it appears that “The deal (with 7Digital) is happening now rather than at launch because Spotify is going through the process of re-learning its business”.

We’re all here to learn and re-learn!

James Heckman, former chief strategy officer at Fox Interactive, MySpace’s parent company, is quoted today by the Financial Times in a report on the status of the online music industry, saying .“A lot of these guys are going to be wiped out, but everything that is happening right now doesn’t matter in the long run.

“This is a transformation period and I think there will be some winners.”