Stay In The Clouds: Spotify

Everyone is trying to figure out how to make the next big “thing”.  Last month the world was on edge over Instagram being acquired by Facebook for one billion dollars (however, the money hasn’t been allocated to Instagram, and they’re waiting for Facebook’s payment to change its ownership hands).

This isn’t news: an offer to purchase is only complete when money is exchanged.  Money makes the world go round.

In the late 1990′s the entertainment industry began its fight against illegal downloading and piracy on the Internet.  One of the youngest hackers to gain notoriety was then 16 year old Napster developer, Sean Parker.  Beyond the “known” hacking of multiple sites, and cracking the code of handfuls of government organizations, code-crackers provide a useful service: they are the people that are developing the online tools we love.  Sean Parker grew up; he is no longer tampering with other online properties, has invested his money in Facebook, and put his feelers around the global Internet community.  Less than 2 years ago he invested in the Swedish music sharing and streaming site Spotify.


Parker may have made mistakes in his teens; he didn’t know the legal consequences of pirating music from the Beastie Boys.  By learning from the poor decisions he made in the 90′s, Parker has thrived in the 21st century (proving the “out with the old, in with the new” Internet community theory wrong).  The same studio executives, musicians, record distributors and user base that sued him are now on his side- anxious to see his next venture.  The tables have turned: Sean Parker has finally won the Napster war.

Why am I such a Spotify fiend?  I know it is the same reason that I was addicted to Napster (and had to delete a ton of files):

I really like seeing the music my friends are listening to, and listening to that music instantly.

Spotify is the most downloaded music sharing platform in the market today.  More people use Spotify than Pandora andShazam combined- Rhapsody and Grooveshark are growing their user bases, but are not pacing near the same numbers that Spotify has maintained; many of the XM Sirius episodes are popping up as Playlists.  Unlike Pandora and Shazam, Spotify gained its footing in North America through its partnership with Facebook (and its introduction as the music sharing site of choice at the F8/Facebook Developers conference).  There are multiple ways that businesses (affiliated or) in the music industry can benefit from the utilization and association with Spotify; here are Social Fulcrums:

  1. Spotify is a way to aggregate music content; as a radio show you can post an entire morning playlist for audience members that were unable to hear you live.  Like YouTube, Spotify users are searching for specific pieces of media to scrutinize.  With between 10,000-20,000 new titles being added to the Spotify database every day, Spotify is developing out its database as YouTube did in the 1990′s.
  2. By synching your bands Spotify account to your Twitter, Facebook and Tumblr, you are able to share songs to all of your network.  By posting your shares through Tumblr, you are creating a permanent links to the song, the band, and the title of the song (adding to the search engine optimization and social media marketing presence of the artist/s).
  3. Spotify is part of the new revenue stream for recording studios.  Spotify pays royalties to stream individual albums and their content.  Playlists are different than albums; albums are under the artist field, while playlists may be comprised of multiple performers.  Based on its users patterns, Spotify believes that the album is disappearing, and the playlist is taking over!  As Europe goes, so goes North America?  For the first time ever: digital music sales have exceeded disc buys.  Custom curation is the new business model for Spotify; they’ve realize every person needs to personalize their jam selections.
  4. 80% of the databases 18 million songs are listened to; this means that the subscribing audience is utilizing the platform, and that it is not a ghost town of profiles with avatars and no activity!
  5. People are customizing their media selections every day- and the niche audience listening to specific songs is rapidly growing.  More music is listened to now than in the late 1990′s, while the industry has lost 2/3rd’s of its revenue stream.  Through uploading your content in Spotify, you are potentially reaching out to an audience searching for different genres of music (through keyword optimization, your bluegrass band in North Carolina will be found in the network).
  6. Spotify has a strong relationship with the social media platforms Facebook, Twitter and Tumblr (the picture above is from a party that Tumblr and Spotify co-sponsored in NYC).  As these giants create new opportunities for their members, Spotify will gain due to its connectivity.  With each new Spotify log-in through Facebook, Twitter or Tumblr-connect, Spotify is able to determine the pool its membership is coming from, how much revenue these networks are bringing into the sharing cloud, and where the songs are being shared.  This is rudimentary market research for music professionals (you’ll know when your songs are shared, where they are heard, and who is listening to them).
  7. Ownership is no longer about having the physical disc in your hand.  It is now a membership driven concept: if you pay $10 a month for unlimited, premium Spotify account access- you can keep everything you’ve listened to on your desktop and cell phone- and can get into your account from any personal computer with the program downloaded (also, providing that you know your original Spotify log in details).  These are the times we live in: we are the first generation to be able to access our information from multiple locations at one time.
In less than a week Sean Parker is going to venture out on his newest frontier: Airtime (a new social media site that is being kept under wraps by the upper echelon of the Internet technology leadership).  There are multiple speculations: it won’t be a music sharing site, but might compete with YouTube; it’ll probably have a subscription cost, but not an upload fee; there will be select Beta users, and celebrities tied to the site from day one.  We follow Sean Parker because we know that he is at the forefront of developing tools in the online sector.
COME ON SEAN: I know that you have something up your sleeve.   Today Sony dropped its new Music Hub platformto compete with Spotify, Pandora, Last.FM, Rhapsody, Grooveshark…I guess you need to develop something newer, cooler, hipper, and sleeker (everyone is piggy-backing your thunder, keep up the hard work)!


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