Wow, I can barely believe it. Spotify has now officially launched here in the US. What's more impressive is that they somehow convinced the major labels to let them keep their free level of membership. Spotify's social media integration coupled with it's freemium business model is what made it such a hit in Europe. The question on everyone's mind now is can they duplicate that success in the US?I've been a huge fan of Spotify's vision, a world where everyone can listen to whatever song they want, whenever they want to and share it with all of their friends instantly (and legally). A few months ago I even went so far as to hack my way into Spotify using a proxy server and a Dutch PayPal account just so I could try it out for a bit.
As much as I love the brand and their vision I have a feeling it might be too late for Spotify to win big in the US. Here's why:
Requiring users to install a desktop client is a huge barrier to entry.
Most of the time people spend listening to music on their computer is when they're at work. Many companies don't even give employees access to install new programs on their work computers and even if they do the ports Spotify's desktop client uses are likely to be blocked by a firewall. To succeed as a music streaming service in 2011 you need to be web based (like Pandora and RDIO). No additional software or firewall configuration required.
A free level of membership won't be unique to Spotify for long.
I'm sure the first thing the folks at MOG and RDIO did today was call the major labels to begin renegotiating their deals so they too can provide a free level of membership. It's only a matter of time until the competition catches up with Spotify's biggest selling point (free).
All else being equal the best user interface will win.
If all of the music streaming services have the same catalog and price points people will end up migrating to the service which is easiest to use. Right now Spotify's user interface is a bit clunky compared to the competition. They've been able to get away with it in Europe because they were the only free game in town. In the US however MOG and RDIO have had to work hard to convince users to pay for their service and as a result have put a lot more effort into designing a simple and premium user experience. Spotify will need to step up its game here.
iTunes Match could prevent music streaming from gaining mass appeal.
While I think there will always be a niche market for music streaming, Spotify is hoping that the concept will go mainstream (as Netflix has been able to do with movie streaming). Unfortunately for them Apple is releasing iTunes Match this fall giving everyone with iTunes access to all of their music on all of their devices for $25 a year. With the weight of Apple behind it, combined with a cheaper price point, the mainstream music consumer may hang on to the concept of owning their music rather than renting it a bit longer.
At the end of the day, despite their challenges should indie musicians try to get their music on Spotify? For right now I'd say yes. Go to Tunecore, CDbaby or whoever you use to digitally distribute your music and make sure they're sending it to Spotify (and the rest of the streaming services while you're at it). It should only cost a few bucks if it's not being sent there already and will give you a chance to get your music in front of the curious early adopters who can't wait to test out the much hyped streaming service on launch day.
Lou
Follow @LouPaniccia
