Read this nice piece, below.
I love spotify and am addicted to it, and Daniel is cool, but here is the key question: can the seriously ingrained Egonomics of the music industry really be changed by Daniel Ek? Can artists and technology companies actually cooperate for a win-win-win solution, without resorting to power tactics? Can some kind of ecosystem be build in a space where ego ruled since the days of Elvis ? You tell me.
IMHO, as the image conveys, I don't think Spotify will ultimately be allowed ie licensed to kill the CD or the unit-sale-centric business model of the traditional music industry. Many artists don't agree with this trend and demand more money, now, from Spotify (utter foolishness, of course - talk about killing the golden goose), many publishers and rights societies (such as GEMA) live in a different universe and have nothing better to do than to strangle technology innovators like Spotify and Youtube with last-century licensing provisions, and the telcos don't care enough to get engaged. We'll see.
Spotify and Daniel Ek: The Most Important Man In Music - Forbes
...The music industry has been waiting more than a decade for Ek. Or more specifically, someone—anyone—who could build something (a) more enticing to consumers than piracy while (b) providing a sustainable revenue model
I know I'm a bit late replying on this article... I run a particularly small label for a niche sound. I've optimistically adopted Spotify and excited to see how the industry develops with these changes. I see Spotify as a tool to get more exposure for our artists and music as opposed to a replacement for sales as we depend on our physical sales of vinyl.
From year to year, our vinyl has grown less convenient (especially as most of our supporters are overseas) and the trend towards streaming services is undeniable. It is even how I consume majority of my music day to day.
The largest distributor of our style of music, ST Holdings, has even withdrawn all content from Spotify.
Even if discovery tools improve to help the independents more, sustainable numbers seem too big. And several of us are not interested in doing gigs and touring all year round. So my question is with a model where you need millions of plays to make reasonable revenue, how is it the "golden goose" for music and labels that focus on a niche sound with a limited audience?
Posted by: Nic Tvg | January 26, 2012 at 11:16 PM
Hi Nic, thanks for the comment. We had the same issue with Radio licensing and revenues: all very small at first, but then they grew to be very big, and also a huge driver of additional revenue. We must allow new models like Spotify to MAKE A MARKET that can, over a few years, grow to be very substantial. Imagine 300 Million Spotify users that pay with ads (yes, that will and does work - see Google), and 100 Million that pay with cash. Pulling content off services like Spotify is like saying to radio 'you dont send me enough money so I don't want you to play my music'. This is the biggest disease in the music business: short term greed and utter lack of collaboration, imho.
Posted by: Gerd Leonhard | January 27, 2012 at 08:13 AM
Thanks! That is an analogy I can relate to. Sorry my follow up has gotten lengthy again...
You mean collaboration in the sense of the entire industry and streaming services? It feels like small labels and independent artists (vinyl runs of 300 or 500 and digital sales in the range of a few hundred) need to sit on the side and wait. These types of labels depend on regional or community based fans. So even adding 100 million users, I'm skeptical that there would be much additional discovery. I cannot think of anyone contacting me saying they found us through Pandora or Spotify so far (last.fm once though).
However I do not agree with several of my peers that streaming is "stealing" sales and dropping Spotify will see a return in sales. Rather the sales will dwindle regardless as people expect access and downloads become more cumbersome. Unlike radio where people heard and then wanted to own, streaming seems to replace the need to own. The next generation will have no model or example of owning media at all. Not a bad thing in my eyes, I'm a fan in fact, but breaking even and covering production costs is left up in the air.
Let's say I'm optimistic and excited but cannot ignore the panic and desperation around me.
Posted by: Nic Tvg | January 27, 2012 at 08:32 PM
Got a little swept up "panic and desperation" is more aptly "frustrations and disappointments." Too much coffee. :P
Posted by: Nic Tvg | January 27, 2012 at 10:40 PM