Spotify’s Bad Day Blues

About three years ago, music streaming service Spotify launched to the public. They brought an incredible way to listen to music and they had a message: “we offer you a free and legal way to easily listen to your favourite songs; throw down your bit-torrent apps and come with us, our way is better and faster and morally sound.” To the pirates across Europe this message was both a revelation and a revolution. Here was a company with a unique service and a bold statement, a company that stood out from the crowd and genuinely offered something new for music fans. But now there are accusations of selling out and an unbelievable level of animosity. What’s to be made of it?

After yesterday’s announcement from Spotify, the response from users of Spotify Free and Spotify Open was overwhelmingly unanimous: “Bye Bye Spotify” was the mantra, along with threats to move back to illegal methods like Grooveshark and TPB. This came as no surprise: when someone takes away your free toys you naturally get angry and lash out.

What did come as a bit of a surprise though were the Premium subscribers who also felt let down by Spotify. Even though their level of service has not changed one jot, some paying users feel betrayed by the company who are now “just another music service.” To them, Spotify has capitulated and bent over for the record labels; they’ve lost their cool and in the process have thrown away the very ideals that brought them to where they are today. Personally I’m skeptical that a business with investors can honestly have “ideals” in the first place. The message of  “everyone giving up on piracy” is certainly inspirational, but ultimately Spotify is there to make money. Their product just happens to be that glorious thing we call music.

Spotify may be notoriously tight-lipped about their plans and reasoning, but they’ve always been open about the fact that they want to persuade users to subscribe to their premium service. Of course they do, they’re a business. A freemium model alone is just not sustainable.

There are thousands of freemium users commenting furiously and vehemently on Spotify’s blog. But once the dust settles and the venting is over I’m sure at least some of these non-payers will decide that it’s finally worth taking the hit. They’ve grown used to the ease of listening and the quality and depth of Spotify’s catalog. If they now have to pay a few pounds a month for the Spotify service then so be it. If not, well they can follow through on their threats and take their chances elsewhere.

One thing worth noting is that for many current freemium users the restrictions don’t come into force for up to six months. Any new user has a whole half year to enjoy the free music in the standard Spotify Open way. If they don’t subscribe after that then they probably never will.

Whether it was due to American record label demands, spiralling royalty costs or to improve advertising, Spotify has re-positioned itself to ensure a maximum chance of continued success.

I’ve been a paying subscriber since June 2009. It was the launch of the mobile version that finally pushed me over, after about six months on freemium. It’s true that I’m a little disappointed that they’ve had to water down some of their more revolutionary aspects, but for me and many others, Spotify remains the very best way to enjoy music.

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On a more personal note, I still have a bad ear infection that’s left me almost completely deaf in one ear and with loud tinnitus in both. I’ve not been able to listen to any music for almost a month now which is a bit of a drag. I really hope it clears up soon…

 

  • Over 3000 comments now at the official Spotify blog. Wow.

    Hope you get better soon!

  • Arto65

    I was disappointed when I heard the news, because it feels like the labels are choking Spotify. In January, Pascal Nègre, CEO of Universal Music France was complaining about people listening 35 times to the same song. So it seems like Spotify had no choice but comply with their demands.
    There has not been many improvements since Spotify social, and it seems Spotify is spending 90% of its time negotiating with labels instead of improving the service. When will we see gapless playback? Folders on iPhone? iPad, bada or WP7 versions?
    Furthermore, many people are complaining about tracks being censored and geo-restricted, lack of family-pack, all because of labels.
    I am a premium subscriber, and I am concerned that Spotify might lose it’s WOW-effect and abide by the old rules, preventing any chance for innovation.

  • As a premium subscriber, you should be happy that the model is changing: as you say, Spotify are a *business*. They need to make money to stay in the game. You can change the game, if you are in it. With Amazon, Google and Apple all readying their offerings in this space, Spotify need to move right now, or else they’ll be eaten for breakfast by the big boys.

    Spotify need to get into the US, for the reasons above. If they need to capitulate on some things to move the whole business forward, then that’s what has to happen. Just think of the catalogue size increase and client functionality increase once the potential market explodes into the US.

    I’d prefer to *have* Spotify, even if a few people get upset, rather than not have Spotify but keep everyone smiling until the money runs out.

    As you may have guessed, I’m a premium subscriber since 2009.

  • Philip

    Spotify is the future when you love music and quality there is nothing better than Spotify.

    Spotify rules

  • In January, Pascal Nègre, CEO of Universal Music France was complaining about people listening 35 times to the same song.

    Yes, how awful that some people actually love music. The labels are stupid. It would be great to hear why they think Spotify became the biggest premium music service in the world in just a couple of years and in only seven European countries when no other service managed to do that before anywhere anytime. Maybe it’s easier to love a service where you can play your favourite song 35 times rather than 5 times? And, as the one million subscribers show, people are prepared to pay for something they love. I wonder if the labels understand why YouTube is such a popular source of music listening for people all over the world…

  • Lia

    I am addicted to Spotify and its bigest evangelist. My subscsription costs less than a bottle of wine and lasts a helluva lot longer.
    I had no idea until reading in the paper hat every track cost 1p in royalties. I bet I wasnt the only one who went out of the room and left a whole playlist running for an hour or so. Sorry i wont do it again.
    Perhaps people wouldnt mind having to press a refresh to continue every 20 mins rather than lose free spotify totally.

  • I personally prefer SPOTIFY…one of my FAVOURITE for MUSIC. Untill the more BEST alternative LAUNCHED I M going to STICK on it ONLY.

  • Tom Aspinall

    In responce to quote:¨Everyone giving up on piracy, etc.¨
    Yes, inspirational message indeed.
    To us; artists and writer / producers, the .0084p royalty per play is worse than piracy; they stick one hand in our pocket while stroking our…bits with the other.
    Spottily protests too much; one moment they are champion of new music, the next the ´people´s entertainment advocate.´
    The service itself is excellent but a what cost to music?
    I find myself guilty of surfing through
    bands´back-catalogue seldom listening to a whole album.
    Heres´a Catch 22. I know many will level the charge that seldom do bands these days deliver a wholesome album full of killers and no fillers but here´s the thing:
    Digital provision v Ownership. We buy a c.d. or vinyl we tend to listen to the whole record. With online streaming and downloads we cherry pick.
    The upshot is here in LA, epicenter of mainstream pop music production, us writers are pressed to write hit, after hit single, hit single. That´s all the labels want. The days of sneaking deeper songs onto pop albums are gone. To illustrate this point, a rumour end of last year did the rounds of the business that Beyonce was to eschew an album release this Summer in favour of issuing a series of EPs.
    Bull**it, naturally. Yet rumours often express the hopes and fears of a community of which this one is a textbook quality example.
    Unless something happens soon to re invigorate the album format it will go the way of the Dodo.
    THis is the sharp end of Capitalism 101: supply and demand.
    The music listening population surfs the net wanting instant ear candy – as the figures support – by extension either we tow the line and produce more or down (pro)tools and start revolution; never happen cos if us lot stop there´s a million thirsty bedroom studio chancers waiting to fill our shoes.

    The music business is a knot of problems and will be until things as a matter of course shake out.
    Spotify is an attempt to address the business of music, a reply to some of the big questions being asked, for example, of intellectual propert. In this, the latter part of the information age, intellectual property is lying on a rack, being tortured within in an inch of the law.
    Is this fair? Is it changing the way the public access music? No to both.
    Historically the victor carries the spoils. The music industry was designed by inception to ´divide and rule´the ´talent´. -we´ve never had any power over our songs which until 8 years ago subjected all to unfair terms but now?
    Publishers and labels loan us the money to pay ourselves in order we can work and in return only get paid $1 per album to pay the loan back, live and eat.
    Thus we rely on publishing royalties, sync rights and get paid every time our song is played or downloaded. The amount varies but
    remember we have to pay most of our wages back to the record label and publisher.
    This is by definition a very simplified explanation, it will answer us here though.

    >At .0084p in Sterling Lady Gaga was paid something like $1200 from Spotify last year.
    Food for thought. Clearly unsustainable.

    Anyhow this is a reply to a blog post and not a meant as a cogent manifesto.
    In fact I am writing this in between dainty mouthfuls of Beluga Caviar on melba toast washed down vintage champaign served by a compliment of naked glamour models aboard my private helicopter flying to my next session.

    IN reality us writer producers make roughly $10 to $15K in royalties per chart hit!
    And that´s the A list writers; not the rank and file.
    All counted there is a few thousand of us netting more than $70k a year.
    Once in a while we may hit a line drive out of the park and make a bit more.

    >This industry until the advent of downloads worked off an insane profit margin, 10,000% per Cd, vinyl album. Yes, you read that correct.

    We are suffering from a case of terminal problems.
    Spotify is one attempt to rectify / profit from
    this Brave NEW WORLD and I´m sick of the- on the backs of others´misfortune – attitude is not helpful. Voicing
    None of this really matters to the music buying public.
    None but one issue – Digital access v Ownership.
    Delivery is still a pain in the ass, MP3s sound dreadful while scapegoating a handful
    of illegal downloaders with heavy handed prosecution doesn´t help.
    Fact is I would make music whether I get paid or not; I don´t know a musician
    that wouldn´t; and this is the problem. The labels know this and continually use this to their advantage.
    What can we do? The public are far smarter than some big business enterprises acknowledge. Perhaps we can formulate a solution democratically. All of us together.Yeah
    and world peace while we are at it too.
    Things have got to change.
    Fact is, what´s good for me, for you is good for the major labels, publishers, and all concerned parties.
    What is problematic is that major labels feel of they concede this then they will loose power and the ability to control the ´talent´.
    And of course, there are a lot of competing egos to service as well.
    Anyway my helicopter has come to rest on the roof at Chateau Marmont. We´re stopping cos
    Cyndi´s Pekinese is thirsty. Only the finest bottled spring water will do for Foofi.
    Joy of the day to you all.
    PS –
    I await to hear what deal the major labels and publishers, and collection agencies brokered with Spotify U.S. on my behalf.
    Of course these negotiations were carried out behind closed doors. My intellectual property bundled up with that from the great, the good, the one hit wonder and the not so good without anyone asking permission. So who is looking after your favourite bands interest?
    No one. Not even the likes of Beyonce or Radiohead have a say.
    A shady conclave of industry moguls working from a place of self interest just sold our, I mean everyone´s rights; all the rights ever made, for what? .0010-cents per play on Spotify? More? Less?

    Yup. What industry apart from the Music Business could get away with this?

    I actually have had meetings with the guys from Spotify and I think they are well intentioned but this is business and they are pioneering a new business model and of course wish to make money.

    There are so many issues. Historically speaking music hasn´t been monatized that long.
    Okay gotta split. New bodyguard spilt a kilo of my finest cocaine over my Gucci slippers.
    Cheerio

  • Wow Tom: Best. Comment. Ever!

  • arto65

    Hey Tom!
    Very good comment indeed! I read it all, although I confess I copy/pasted it in a word document.
    1)Lady gaga earning 1200$ (727£) at 0.0084pence a play equals to 86.547 plays…
    If you read about it in Torrentfreak http://goo.gl/7j4qc, please read Spotify’s response http://goo.gl/EQjYW
    2) I like your point about the relationship between artists/labels/majors. I would like to know how contribute, as a consumer.
    3) I hear you about albums. I think the notion of album is going to fade away, but it’s going to be replaced by something else, signaling a coherent group of songs. I’m sick to death when I have to buy the same album three times because of different bonus songs. Spotify puts an end to that. I still listen to every single song of my favorite bands, so I don’t think fillers are dead.
    4) In the end, I don’t really understand your point about Spotify. Could you please explain it to me?

    Please, do contact me via Twitter @arto65 if you want to discuss further!

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  • I would advice spotify replace the open service with something like “Spotify Light”. This service works like free today, but costs $3 but shows fewer or none auditory commercials and make Spotify still what it are today. If spotify demolates the advertising service, the brand is risky to loose one of it’s identity – to be an cheap way to listen to music but also find great offers from companies who use spotify as a great way to promote a brand for an target audience. Many of the commercials on Spotify features great deals not seen in the common commercials and often there is great collaboration between spotify and other brands to make unique offers, which premium users less are getting known about.
    This also means I would like an option for Premium users to view visual commercials by opt-in to keep them updated for great deals and announcements from many companies. A destruction of the previously leading market strategy by spotify would also purge a great way for companies etablishing a great promotion of products to a certain user base.

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