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.
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.
ForWhomTheBellTrolls Thursday, December 06, 2012
"Spotify just got louder! We’re thrilled to have @Metallica's music catalog now on Spotify!" - @Spotify
David Thursday, December 06, 2012
Ironic Metallica would publicially support a service that Sean Parker is a board member of all these years later after being the first to come out publicially against Napster.
Visitor Thursday, December 06, 2012
Metallica are sellouts..
Snore Friday, December 07, 2012
"Metallica are sellouts.."
Snore... Meaningless statement.
jw Thursday, December 06, 2012
This is a huge step in the right direction.
Visitor Thursday, December 06, 2012
Down with Spotify!!! Keep the HATE alive!!!
HansH Thursday, December 06, 2012
Hate is a losing game... Give it up. Talk to Lars Ulrich ;)
Visitor Sunday, December 09, 2012
Agree. About the hating, that is.
As for Ulrich - he's no fool, and I'm sure Metallica got an offer they couldn't refuse.
Now, I can understand that Spotify are desperate and that they had to do something after the Swift/Rihanna catastrophies, but nobody's going to fall for a marketing stunt like this.
Nice Guy Eddie Thursday, December 06, 2012
"We like to think of ourselves as punks." What a complete tool.
Ek is about as punk as Coca Cola and McDonald's
Joe Strummer; may he rest in peace.
Troll Thursday, December 06, 2012
Grooveshark is the best music service out there.
Spotify has been running a secret undercover smear campaign and have sofar been quite succesful. Given their recouces its no suprise.
I predict Grooveshark will get the labels on board someday
R.P. Friday, December 07, 2012
Spotify keeps winning. I said it before. The platform is convenient. Anything convenient wins no matter how much hate there is for it or the people or business model behind it. Sheep don't care.
Spotify is the itunes of streaming Grooveshark is Zune....
Spotify need to pay more Friday, December 07, 2012
Spotify pays 70% royalties. They should increase it to 80% so artists will get better royalties.
It's only fair because without the music, Spotify would be nothing. Artist don't need Spotify but Spotify need them.
80% royalties will allow artists to make a living.
Visitor Monday, December 10, 2012
Why should they pay more then iTunes? iTunes pays 70%.
Slippy Dean Friday, December 07, 2012
Let's keep this in perspective. Spotify predicted 50million US users in their first year (Billboard July 8 2011). They have 1 Million. OOPS. The labels still make all the money. Metallica has a direct deal, so they are getting paid. Songwriters and artists tied to labels are way downstream from the Spotify...drip. Let's all agree streaming is not going away...the real key is what Metallica knows, manage your own distribution and your own fans and monetize everything.
Chef Friday, December 07, 2012
No, they have 1 million paying users. If 1/5th of the paying users are in the US, they could have about 5 million active users. Still only 10% of what the said, but that's still not bad.
jw Friday, December 07, 2012
Yeah, it's some percentage of 20m active worldwide users.
Also, that prediction was made to potential advertisers... you have to take those sort of things with a grain of salt because it's a part of negotiating for the best rate, which anyone on the "geting paid" side of the equation should appreciate.