If on-demand streaming is flowing fast, Spotify is downright dehydrating its competitors. And, potentially causing serious disruption and cannibalization for other parts of the industry ecosystem. On Thursday morning at a media event in New York (and simultaneously in London), Spotify CEO Daniel Ek hoisted some very impressive numbers in the air.
5 Million Subscribers Worldwide
1 Million In the US
Active Users: 20 million
$500 Million Paid to Record Labels (70% of Revenues; Up 100% Since March)
1 Billion Playlists
The growth path is quite remarkable, especially in the highly-difficult, ultra-expensive US market. But Spotify has hit the million-mark in the US in less than 18 months, equal to what Rhapsody achieved in roughly ten years. In fact, Ek even poked at that decade-long trudge during his announcement, but stopped short of mentioning Rhapsody by name.
And outside of Rhapsody, the competition basically falls off a cliff. Rdio and MOG, for example, are reportedly struggling to attract anything substantive, though MOG is now owned by Beats, Microsoft is rumored to be eyeing Rdio, and Apple represents a monstrous threat. That suggests the introduction of big, well-financed guns, though the uncomfortable question is whether Spotify has already sewn up this market.
And what about the artists, a group increasingly concerned with half-penny rates and missing payments? Ek largely skipped over that messiness, preferring to point to gigantic, top-level label payments (often, to major labels). Don’t worry, this is good for you…
There’s more, and this one’s historic: Metallica was also on hand at the event to announce their full participation in Spotify, a poetic development. Back in the early 2000s, Metallica drummer Lars Ulrich was amongst the biggest opponents of Napster and its cofounder, Sean Parker, and led the charge to block offending accounts prior to a complete application shutdown. But Ulrich and Metallica, now out of their major label deal and in complete control of their masters under Blackened Recordings, stand to receive direct payments from Spotify (or, more bluntly, they will actually receive payments).
For Ulrich, a long-standing proponent of control, a direct flow of cash offers the ultimate driver’s seat. And, a reason to smooth it over with Parker.
Beyond all that, Spotify also unveiled a deeper plunge into recommendations and social connectivity, one designed to challenge the notion that tech-based music discovery is a unicorn. And, make Spotify into more than just a place to play the stuff you already know.
In that light, Spotify unveiled a major expansion beyond its Facebook- and playlist-sharing tools, one that includes a smart Follow tab to refine the stream of recomendations and sources, while also building more context. Those improved recommendations – from friends, apps, or tastemakers – will flow into a Discovery section that serves as a highly-relevant musical feed, with mobile alerts and curated information sprinkled on top. The expanded discovery suite starts flowing next year.