IMHO Spotify stopped being interesting when they had to drop their ad-supported all-you-can-eat free tier. That's what really drove growth in Europe and make it ubiquitous here in Sweden.
Now that that's gone, they're just another dime-a-dozen paid music streaming services that nobody wants to pay for.
edit: For anyone wondering what the big deal with Spotify is, is that it was completely free. Anyone could just download the app, and then listen to any song they wanted to, legally, completely free - there were just short ad breaks every couple of songs. This free legal option meant that there was zero reason to pirate music anymore, so everyone flocked to it.
If you paid €10/mo you got a higher bitrate, no ads, offline playing and access to the iPhone/Android apps. The pay option was attractive if you were going to have a party (ads are a turnoff in situations like that), or when you end up requiring the iPhone app since you don't have any music files to put on your MP3 player anymore since you've just been listening to everything on Spotify...
The record companies really hated giving away music (despite Spotify being a goldmine for them - Spotify is currently the #1 single source of income for record labels in Sweden, making them more money than any single retailer), so they had to kill it a couple months back (rumor has it they had to kill it in order to secure U.S. rights).
Without the completely free tier, they'll have a really hard time getting new users.
I agree with everything you've said, especially about them no longer being interesting, but for one point.
You couldn't listen to any song and as such it didn't eliminate the need to buy (or pirate) some tracks. Certain record companies had yet to sign on and quite a few major bands were missing from the database. Bands such as Pink Floyd, Led Zeppelin, The Beatles and ACDC (there are numerous others, these are just the bands I like which were missing and really stuck out to me).
I was a paying customer for around 9 months using the service to sync offline playlists with my Android phone (wirelessly, as there were no other solutions that allowed me to do this easily), but I canceled my subscription when they failed to acquire more of the artists I liked and other solutions came along to allow me to wirelessly sync playlists to my device.
There are better ways to handle your online music now. Spotify had a real chance at becoming top dog, but in my eyes, they didn't innovate and provide the features the public wanted quickly enough.
>The award-winning music service that’s taken Europe by storm will soon be landing on US shores. Millions of tracks ready to play instantly, on your computer and your phone.
>Any track, any time, anywhere. And it's free!
Maybe there's a bit of a drawn-out bait and switch strategy here, but it looks like Spotify is going to start off in the U.S. with an "all-you-can-eat free tier".
It never was completely free: there has always been a limit on the number of hours per month you could stream music.
Anyway, your analysis is wrong, because you think your usage predicts everyones usage pattern. It doesn't. I'm a happy paying subscriber and will stay one for a while to come. If I hear one new CD a month, it's already worth it. Even if I don't, I love being able to just legally browse and listen to almost any music I can think of.
The biggest difference is that Spotify is curated content. On Grooveshark, if you search for an album, you may get three copies, each missing songs and improperly named. Spotify has one real release of the album.
My one big gripe with Spotify is that they don't serve up a lot of the music I listen to (WARP-label), and it seems that all music before 2005 is either a karaoke or cover track – when I search.
I'd check again, they have a load of warp now. I also noticed all the Autechre albums are back on again. Things appear to be more like they were in the early days of spotify.
While it's a fundamentally different approach -- Pandora has the Beatles.
I've been a Pandora One subscriber (no ads for $30/year) and I'm quite happy with it. Sometimes I do want _A_ song, but in general, outsourcing my playlist to their algorithms has worked out great.
what spotify has over its competitors is distribution through facebook [1]. this single factor makes the rest of their competitors numbers (and quite frankly their own numbers) more or less irrelevant. keep in mind, too, that it says "users" and not "paid subscribers"
Yeah, it's crazy to think it will only be 50mm users in the USA, after people have been coveting this for so long, and Spotify has done so well in Europe.
If you read the article, it states that in 3 years, Spotify has only managed 10 million users. It's unlikely that they'll gain 50 million users (from one country) in one year, when they barely got 20% of that in three years from an entire continent.
It's not an entire continent - Spotify is only available in a handful of European countries. They've also spent a lot of time in invitation-only mode. Plus if they tie in with Facebook that will be some amazing marketing incomparable to anything they've done before.
I agree completely with your sentiment, but it's important to note that US music consumption makes up, I believe, more than half of the worldwide market. So, in fact, the US is a larger market than all of Europe. That being said, 50 million registered users by some gorilla math, maybe. Real, active engaged, users - no way.
Yeah, I'm assuming the crazy math (5-10mm real users, the remainder being alternate accounts, abandonware, etc.) Plus, multiple devices per user, which you could be really crazy and count as unique users -- laptop, home, work, ht/game system, iphone, ipad each.
Plus, USA = "everywhere"; I'd assume if there were service in Europe and the USA, a lot of people in non-USA non-Europe would be VPNed or otherwise appear as US users for these purposes.
I more meant anyone on Facebook who listens to a track streamed from Spotify while on Facebook and not having even been to Spotify's site or having downloaded any client, could be called a "user". 50 million people finally seeing real music integration on Facebook listening to a track or two doesn't seem unrealistic, but if that's what they call a user, they're being very generous to themselves.
an FT.com article put paid subscribers at 1 million, 15% of their user base. They've just closed $100 million of funding. Based on the FT ratio the projections equate to 7.5 million paid US subscribers. They'll need to retain those customers to make a return and the market is very competitive. More crazy valuations.
Now that that's gone, they're just another dime-a-dozen paid music streaming services that nobody wants to pay for.
edit: For anyone wondering what the big deal with Spotify is, is that it was completely free. Anyone could just download the app, and then listen to any song they wanted to, legally, completely free - there were just short ad breaks every couple of songs. This free legal option meant that there was zero reason to pirate music anymore, so everyone flocked to it.
If you paid €10/mo you got a higher bitrate, no ads, offline playing and access to the iPhone/Android apps. The pay option was attractive if you were going to have a party (ads are a turnoff in situations like that), or when you end up requiring the iPhone app since you don't have any music files to put on your MP3 player anymore since you've just been listening to everything on Spotify...
The record companies really hated giving away music (despite Spotify being a goldmine for them - Spotify is currently the #1 single source of income for record labels in Sweden, making them more money than any single retailer), so they had to kill it a couple months back (rumor has it they had to kill it in order to secure U.S. rights).
Without the completely free tier, they'll have a really hard time getting new users.