Spotify

I've asked this question as well, Spotify is a massive hit with all my friends but i don't see how it can survive. Its all legal and legit, which means there are massive bills to pay. Maybe they have a bigger plan?

Spotify is a great idea. Hats off to them for the music portal they have developed.

However the question shouldn't be how are SPOTIFY making any money, it should be how are the ARTIST's and LABEL's whose music are streamed on Spotify make any money.

You'll note that Naim Label content isn't available on Spotify yet.

Perhaps Spotify is a great calling card (and loss leader) for new mainstream music and popular classics, but both the subscription and ad revenue royalty models are flawed for valuing specialist music.

Royalties work on the proportion of demand basis, i.e. a fraction of a penny for a mainstream artist let alone a niche one.

Personally I am a follower of artists getting what they deserve for their music. And anything that helps people people discover new music can't be entiely bad.

Plus I am sure many of our forum users, still purchase music they hear on Spotify (a valid arguement). But the majority (younger users) unfortunately do not - and they represent the bulk of top heavy internet usage.

Yes, streaming may be the future. In which case, governments need to address online copyright legislation and pressure ISPs to come up with a royalty model that renders as much if not more reward as exposure of an artist over the good ol fashioned airwaves can!

The bottom line is the music industry would not survive if the Spotify model took over. Independent labels like us would be the first to wither and die.

I am open to changing my mind, but they need to prove their loyalty to the independent music sector first.

quote:

The best things in life are free

But you can give it to the birds and bees

I think the on-line services are a great source for finding new music but I understand what Simon is talking about .
Personally , I don't use Spotify as I have taken my computer out of the streaming loop and access Last.FM through the Sonos . When I find new music ( which is quite often ) I will always buy the CD and then rip it to my network drive , hence single-handedly trying to keep the music industry going .

Now offer me a service like Spotify , Last.FM or even iTunes that allows me to play & find new music online from all artists and then download it in Lossless or 24bit and I will be a happy bunny .
It's great that the Naim label are doing it but as the majority of music downloaders are happy with lossy MP3's I'm not holding my breath for widespread Hi-quality downloads .

Ed

Peter Gabriel's we7.com started as an audio ad funded free to download service. This didn't work for them so they are now doing a streaming service (not quite as sophisticed as Spotify's...yet), but also allowing you to purchase the tracks. Only mp3s for now....but the principal is there.

You are right Ed - it should eb the future. Do the amazon click through's on last.fm have any relevance on a SONOS or is it just the music?

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Originally posted by Simon Drake:
Do the amazon click through's on last.fm have any relevance on a SONOS or is it just the music?

I think it is just a purchase link for the music Simon.

Ed

so you can't buy music on amazon on the SONOS itself?

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Originally posted by Simon Drake:
so you can't buy music on amazon on the SONOS itself?

No , that has to be done elsewhere or on the Last.FM site . The Sonos is only really a player for Last.FM which allows you to choose " Stations " to play and the ability to Love or Ban tracks which helps their servers make a better stab at choosing music for you .

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Personally I am a follower of artists getting what they deserve for their music.

Does that mean the bald drummer from Genesis will have to give lots of money back?

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The bottom line is the music industry would not survive if the Spotify model took over. Independent labels like us would be the first to wither and die.

Real music is not about an industry, it is about expression. I think most artists create music because they believe in it and not because they think it will make them rich. I don't think the Naim label has too much to worry about; I think that exposure to the artists on the label is more likely to generate sales than kill them off. Pirate radio stations of the 60s didn't kill off music and Sportify is not a pirate station, it is a legitimate station.

I'm quite happy to support artists that I like. For example I buy Karine Polwart's music direct from her as that way the money goes directly to her to help her and her musicians rather than in the pockets of those whose contribution is questionable.

Interestingly, the Naim HDX is an ideal machine for somebody who wants to borrow music from friends or a library and rip-it off. And yet I bet HDX owners don't do this; they only rip music they have bought. The same goes for everybody I know who uses computer audio.

So I think that Sportify deserves to survive as much as any radio station does. If the owner of the music (label/artist) doesn't want their music played then Sportify won't play it.

ATB Rotf

PS Simon, if you release Fred Simon's new album as a double elpee on vinyl then I'll place an order immediately; I've got the CD on order now, but would love a vinyl version. I know I am not alone.

ofcourse its all about music. your kind of preaching to the converted here! but even beethoven made a living! the best musicians wouldn't have the time we want them to, to be creative, if they had to work a full time job too! inevitably over the last few thousand years, money has been a part of making music.

pirate radio is completely different. it is not an instant on demand service and the challenges facing the industry were incredibly different 40 years ago.

yes i think 99% of people on this forum support the artist directly whether it be gigs or direct sales, including myself. think we all agree on HDX point too so not sure what the relevance is. i'm au fais with public buying habits thanks.

as I said, the Spotify model with some justified revisions has the power to save music, but it has a bit of work to do.

remember, it is few copyright owners own a majority of music. and that happens to be the music that would capture the larger proportion of plays and hence revenue. for back catalogue (popular classics) Spotify is perfect. but that isn't directly facilitating new music. and money back into major label corporations pockets.

the majority of copyright owners (smaller labels, holding the minority of musical content) are yet to opt in to spotify. although front end it is incredibly easy to use with a formidable selection of mainstream music (granted) - agreed, industry wide it is up to services like Spotify and We7 to continue to take responsibilty and make sure artists and labels can continue to fund independent music.

as Gordon correctly pointed out, at present, the figures only add up for the majority licensors - but this could change and I hope it does because it'll be the music that benefits!

If you want Fred Simon vinyl , click here!
http://forums.naim-audio.com/e...8019385/m/7102945127

I've registered my vote for Fred on vinyl - I hope you get the numbers.

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think we all agree on HDX point too so not sure what the relevance is. i'm au fais with public buying habits thanks.

Just saying I didn't think Spotify would hurt sales of music any more than I think the HDX will even though it makes copying a friend's CDs with extremely high quality results dead easy and potentially owners could. The music industry always seems to fear people obtaining music without paying for it, but it has been easy for years - have artists suffered badly? I guess the ubiquitous iPod would have been a better example: do kids borrow CDs and rip them to computers/iPods or do they pay for downloads for the iTunes store? I don't know the answer to my questions.

I think Spotify may be the future though - imagine a huge library with all the recordings you could dream of. You subscribe and you can play what you want. If the library were big enough then I'd subscribe. High quality music on demand streamed to a Naim DAC into my Naim system .... sounds too good to be true.

ATB Rotf

quote:

Originally posted by ROTF:
High quality music on demand streamed to a Naim DAC into my Naim system .... sounds too good to be true.

But why not if the Library is big enough and there are levels of membership from those happy with 128 kbit/s all the way up to 24bit 96kHz for those willing to pay more . I'd do it .

I have been using Spotify a bit now and I think it a great idea, not just this beta version but an overall move to this style of play on demand streamed music (subject to Simon's reservation of it destroying smaller labels).

However, I still cannot equate the potential advertsing revenue coming in with the royalty's definately being paid out; unless the two geeks behind Spotify has signed major royalty deals at a substantially more favourable deal than previously agreed by anyone else?

With over a million users, potentially listening to god knows how many albums, their royalties cheques are increasing 24-7, 365 days a year. If they have managed to construct a business model where the advertising revenue can meet and exceed (don't forget overheads) this huge payout then I wish them all the best. The only way I can see it working is if the advertisers are covering the royalties. EG, I listen to Maddonna Ray of Light for which the artists/composer is due £1.11 (sake of arguement) so Nokia have to pay £1.30 to advertise to me during my album...

For now my advice is pay monthly, not yearly or you may lose your money.

I think the Spotify folks recently signed a deal for selling the music to you as well. So you if you like what you hear, you can then buy as well from them. Probably a bigger source of revenue.

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Originally posted by Lontano:
I think the Spotify folks recently signed a deal for selling the music to you as well. So you if you like what you hear, you can then buy as well from them. Probably a bigger source of revenue.

Agreed Adrian, but that is potential revenue IF I buy the album I have already listened too...big risk for them to take?

Gordon

I am quite intrigued by the whole affair.

Music service Spotify had a simple model when it was first launched. You could listen to music for free with the occasional adverts thrown in, or pay a monthly subscription and listen uninterrupted. However, the number of listeners choosing the paid-for option has fallen below expectations meaning Spotify has had to look for other ways to generate revenue. Selling music tracks is their latest idea to do just that.

A deal has been struck with the digital music store 7digital to allow users to buy tracks they are listening to through Spotify. Music will be available in the UK, Germany, France, Italy, and Spain initially. Further expansion across Europe is planned with Norway and Finland coming next.

Analyst Mark Mulligan at Forrester research commented:

The deal is happening now rather than at launch because Spotify is going through the process of re-learning its business … It went into this thinking it was going to be a premium subscription business … The problem is what’s proven to be the successful part is the free bit.

Spotify’s ability to create playlists and share them with others will not be utilized with this new buy option. Users will only be able to purchase individual songs or albums, but buying a playlist you have created yourself with one click is planned for the future.

Clicking a song to buy will take you to the 7digital online store, but Spotify also want to remove that step and allow users to remain in Spotify while completing the purchase. Until then you’ll be able to get your music in 320kbps and DRM free from 7digital’s site.

quote:

Originally posted by Lontano:
It went into this thinking it was going to be a premium subscription business … The problem is what’s proven to be the successful part is the free bit.

Exactly my point...

Strange that two successful business people should have been so naive?

Guess you live and learn. Anyway we should enjoy it while it is around and test out all those albums we might want to buy

quote:

Originally posted by Lontano:
Guess you live and learn. Anyway we should enjoy it while it is around and test out all those albums we might want to buy

Indeed

I wonder if the bigger picture here is to pull the rug out from under illegal file sharing sites? Why download illegally when you can listen legally for free? If so, it may explain why major labels have been flexible about royalties...the enemy of my enemy is my friend?

The adverts are annoying - but not £10/mth worth of annoying. And last time I checked there was no other benefit to paying for membership so it's hardly surprising that few bother to do so.

Along with probably most on this site, I'll happily use Spotify to test-drive new music and decide if I want to buy the album or not.

But I suspect that we are in a minority here, there is a whole generation who see no reason why they should actually pay for music. My partner has two girls (17 & 20)who've got hard drives full to bursting with music but probably own about 50 CDs between them. And that's the challenge that I'm not sure how Spotify will meet.

I usually listen to albums in my collection as well as albums I may be purchasing! on Spotyfi ,if I can't get away from PC when work calls!