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The Mobile Hypothesis: Can the Handheld Monetize Spotify?

Thursday, November 05, 2009
by  presnikoff

As a 'best of breed,' Spotify is proving the power of on-demand, cloud-based music access.  The latest tallies are pushing past 6 million users, and American blogs are itching for a stateside arrival.  But the success of Spotify may also be reaffirming serious monetization problems, and according to sources to Digital Music News, major label executives in America remain unenthusiastic about licensing the ad-supported free-for-all. 

This looks like a classic Silicon Valley monetization riddle, not a problem out of Stockholm (or London).  But can mobile platforms prod people to pay, if packaged into the right app and priced appropriately?  That is a huge question heading into 2010, one that Spotify, Grooveshark, Rhapsody, and others are grappling with on both sides of the Atlantic. 

Looking past v1.0 snags, the concept of accessing any song at any time from anywhere is alluring, and something these companies think consumers will pay for.  Spotify is now available across the iPhone, iPod touch, and Android-powered devices, at least in Europe, and smart cache capabilities allow playback when a connection is not available.  Great stuff, though outside of the theoretical possibilities, it remains unclear whether consumers will be ready-and-willing with their wallets.

Meanwhile, the Spotify mobile footprint is steadily expanding.  In mid-October, Spotify broadened its mobile availability to the HTC Hero on British mobile operator 3.  The Hero is an Android-based device lingering in the deep shadow of the iPhone, though 3 is motivated to boost an Apple rival and capture premiums in the process.  Other devices are expected, and everyone will be looking for signs of monetization life over the next few months.



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