Spotify landed in the U.S. just two months ago, but it’s already making waves. We’re not talking about acquiring users (though, those numbers are nothing to sneeze at). No, the real benefit is the effect it’s having on competing music subscription services. MOG and Rdio are both rumored to be launching free versions of their music streaming services. This is very good for you. In a lot of ways.
You Can Compete With Free
There was a reason Spotify made waves when it landed. To some, it was confusing. Music streaming veterans asked what the big deal was. And to be fair, they had a point! A lot of these services are pretty similar. Spotify had something that the others didn’t, though: a free version. Rdio, MOG, Rhapsody, they all have a pay wall blocking users from gaining access. This is important for two reasons: one, freeloading users can be coaxed into giving you money more easily than people who aren’t using your service at all. Secondly, and perhaps most importantly, because free users, even if they never give you a dime, are constantly aware of your service, and will tell others about it.
Think about it. Why does YouTube have such a huge userbase? Because in 2005, you couldn’t embed video on your site for free easily at all. Perhaps we’ve all forgotten, but back in the internet’s heyday, if you so much as linked to a picture on someone else’s website, you’d get accused of bandwidth stealing, and all manner of fancy website scripts would block you from seeing it. Video was right out. YouTube came along and said “Hey, we’ve got this simple embed code, and we won’t even get mad if you put our videos in your own site!” They offered a sweet feature and ate the cost, business models be damned (no wonder they were a perfect fit for Google).
Well, despite innovation in far more resource-demanding industries, the music industry has still lagged behind the rich capabilities of the internet. Spotify came along with the notion that maybe you can compete with free. In Europe, they did exceedingly well. In America, within less than a month, they already acquired 175,000 paying users, raking in roughly $1.5m per month easy, plus whatever advertising revenue they pull in. Not enough to save the music industry, but also not bad for their first month.
Millions of dollars for a service that got its notoriety for its free version. It’s hard to argue the importance of competing with free with free.
Free isn’t the only important thing, though. Don’t get us wrong, we like Spotify. There’s a few things it’s missing though. In the old days, music was music. All you needed was a record/cassette/CD and something to play it in. Everything else was left up to you. In the world of tomorrow, however, a music service needs a few things to work and work well:
- Discovery: There’s so much music available so quickly that sifting through it all has become nearly impossible. Hot new rock stars, anthologies of classics, indie artists from every corner of the ‘net. A bajillion genres. Services like Pandora do a good job of music discovery, but they’re also not complete. Other services like Rdio and iTunes integrate some discovery services as a bonus alongside their primary offerings.
- Access: Albums are expensive. Even individual songs can get pricey if you just can’t stop looking for new music. 30-second samples don’t cut it, either. People want to know they’re going to enjoy something before they shell out hard-earned cash. Music streaming services need to have huge libraries to provide everything a user might search for.
- Organization: Even among the music you do know, your music library can get as dizzying to navigate as, well, an actual library. Whether it’s just the songs you have access to (like Rdio), or your entire collection, both from within and without the service (like Spotify), organization is necessary. Organization has its own set of needs (search, sort, browse), but that’s outside the scope of this article.
- Sharing: It’s 2011 and people are still using quasillegal YouTube videos to share songs. This is silly. Another of Spotify’s killer features is the ability to share a song with other Spotify users as easily as sending someone a message on Facebook. Incidentally, you can also share songs on Facebook.
- Price: Both free and paid. Rdio, MOG, and Rhapsody have been around for years, but haven’t hit critical mass due in part (we can suspect) to lacking a free version. Zune, on the other hand, has had issues, partly with the inability to use it on anything but a Microsoft device, but also sits at a price premium over the others. Argue about value all you’d like, but higher prices sell fewer units.
- Ubiquity: As in most other areas of software, ubiquity is king. More users means more money, more development, more ideas, more innovation, better service (sometimes). A music service can be the best thing in the world, but if consumers can’t get to it, it’s pretty much useless (sorry, Zune).
No music service has hit all of these points perfectly yet. If you’re noticing Spotify and Rdio’s name come up a lot, it’s because those two have come the closest. They both have huge libraries (access), they both hit the mark on paid price, and both are available just about everywhere (Windows, Android, iOS). Rdio still beats Spotify in discovery and organization, but Spotify still holds the free side of the price, as well as sharing over Rdio’s head, yelling “neener neener”.
Which is why if Rdio does launch a free version, and if it’s comparable to Spotify’s free version, Rdio could easily take the throne from Spotify. Imagine it. $10/month for unlimited access to all the songs you could want, you can bring your own, listen to your music from anywhere on any device, share songs easily with other users, and you’re not limited to your friends what can pay. It would be music nirvana.
It also sounds familiar. It’s exactly what Spotify promises. While Spotify didn’t necessarily fail to deliver on any of those in particular, the winner of this battle may just come down to implementation. Spotify prefers their desktop app, while Rdio has a web app to manage your library. Rdio only deals with music in their own library, while Spotify also syncs, streams, and organizes a user’s local music. Rdio sorts music with fancy-looking visualizations, while Spotify gives you a search box. It’s difficult to say any of these methods are right. Music playback is one of the most subjective of the UI challenges. Did you know some people even use those five-star rating system? Yeah. Surprised me too.
If the only prize we get from Spotify coming to the U.S. is renewed competition in the music streaming world with new free tools, then we made out pretty good. A fire’s been lit underneath Spotify’s competitors, and things are about to start get real interesting. As the NYPost article points out, Facebook is set to announce new music-related features at their upcoming f8 conference. It’s at least wise to not dismiss the timing. Rdio could easily launch some Facebook-integrated features as well to compete.
Rdio and Spotify are poised to be the heavy hitters in this grudge match. They both have few holes in an otherwise great service, they both have clout in the music industry, and most importantly, they both have pretty big fan followings.
Grab your popcorn and stay tuned. This is gonna get good.