South by Southwest 2010 prelude: Spotify won't be saving music industry any time soon
Spotify CEO Daniel Ek is interviewed by Wired's Eliot Van Buskirk (not shown) at SXSW. (AP photo)
AUSTIN, TEXAS --- Some trend-spotters point to Daniel Ek, a 26-year-old Swedish technology enterpreneur, as the music industry's next Steve Jobs or Shawn Fanning.
Little wonder the Austin Convention Center was packed for Ek's keynote address Tuesday on the final day of the South by Southwest Interactive conference, a national technology gathering that serves as a prelude to the South by Southwest Music and Media Conference, which begins Wednesday.
Ek talks like a savant. "Music should be like water," he said. "We are heading toward a model where consumers gain instant access to music on any device they choose."
But Spotify, hailed by some optimists as a potential savior for the music industry, remains a European-only proposition at the moment. Only a few months ago, its launch in the U.S. was imminent, Ek believed, but on Tuesday he made no such promises or predictions.
"We have to get our ducks in a row with partnerships and publishing," he said. Deals still needed to be struck with 5,000 publishers and collecting societies, because he wants his service to be completely above board. He didn't elaborate on the difficulties of striking these deals, but that major roadblocks remain became apparent when he couldn't specify a date for Spotify's debut.
Fanning's original rogue file-sharing service Napster and Jobs' iPod are frequently blamed for cutting into music industry profits; compact disc sales have been cut in half the last decade, losing considerable ground to digital file-sharing. Napster ushered in the file-trading era before it was sued out of business by the big record companies, and the iPod has been characterized as a "high-tech burglary kit" by U2 manager Paul McGuinness because, as even Jobs acknowledges, very little of the music on the average digital music player is procured through legitimate means.
With file-sharing still out of its control, the music industry is viewing Ek's creation with skepticism.
Spotify originated in Europe in 2008, and now has 7 million users. It has earned praise for its variety of platforms, speed, ease of navigation and intelligent presentation. It offers consumers a choice of streaming or downloading their favorite music and sharing songs and playlists with friends. It is supported by advertising and subscriptions, and is designed to funnel part of its revenue back to artists and license holders. Last October, Ek spoke confidently at the Future of Music Coalition conference in Washington, D.C., that Spotify would launch in the early part of 2010.
He was no longer so bold Tuesday. But he remained optimistic about Spotify's long-term future. He provided few specifics, but did affirm that Spotify now has 320,000 subscribers in the six European countries where it is avaialable, up from 250,000 "a little while ago." That's not enough to turn the music industry around, and many music-industry professionals doubt whether streaming services will be able to convert users into music buyers. But Ek insists Spotify can.
His primary goal, he says, is to make Spotify readily compatible with any music player.
"If music legally and easily can be obtained on any device you want," he said, "the music industry would be radically bigger than it is today."
That growth will be fostered by social networking services such as Twitter, Facebook, text messaging and email. The original Napster exploded because it developed a community around music, Ek said. How to turn that impulse into a legitimate business remains elusive. Ek is sure that Spotify isn't the only answer, but part of a wider array of innovations that will be fostered by open-source networks and social networking: "There isn't one business model that will save the music industry."
I'm not waiting for Spotify any more. MOG is awesome from a price and ease of use standpoint. And what really lifts it head and shoulders above Rhapsody - the other similar option - is the aggregation of music blogs on the MOG website. It's the like the greatest magazine and radio station in history have come together. I can't wait for the mobile app in April...
Posted by: Stephen | March 16, 2010 at 10:39 PM
I'll ditto that. I've been very happy with MOG's service. It's been an interesting both to discover new music and catch up with bands I like whose newer releases I hadn't heard yet.
Now, if I can just get them to do a deal with CDBaby so I can have my music on there too, they'll be perfect. :)
Posted by: Phil Johnson | March 17, 2010 at 12:17 PM
WHO WANT THIS CRAP ANYWAYS? I GE MY MUSIC FROM BLOGS. THE NEW BUSSINESS MODEL FOR MUSIC IS FREE FREE FREE! BANDS WILL MAKE THEIR LIVING OFF TOURING AND TSHIRTS AND MERCH. THIS STREAMING [stuff] WILL NEVER BEAT MY HUGE LIBRARY IN MY ITUNES.
Posted by: MIKE C | March 18, 2010 at 01:02 PM