Does Spotify Have What it Takes to Challenge the iTunes Juggernaut?

[Boring Editorial Update: Changed the title of this post because it sounded too similar to the previous post]

For months I've been reading lots of buzz about Spotify, the music software that allows users unlimited streaming from a catalog of over six million tracks and is being dubbed around the Blogosphere as potentially the first real threat to Apple's iTunes empire. As of now, Spotify is only legally available for free (with advertisements) in the UK, Finland, Norway, Sweden, and Spain, with users in most of Western Europe allowed premium (ad-free) access for a monthly fee. You'll notice the US is conspicuously absent from the list of officially-sanctioned countries, as the RIAA and Spotify are still in negotiations for US licensing deals.

Determined to try the service for myself, I utilized a workaround for creating my own account that took advantage of the 14 day "travel access" window allowed to all free account users (premium subscribers have no cap). Basically I spoofed a UK IP address and used it to activate my account. Unfortunately, as of yesterday, free accounts from anywhere require an invite code, so if any of you US-based people want to try the service out yourself, you're shit out of luck for now. Never fear, I've been using Spotify for nearly a month and I can tell you exactly how much of a "game changer" it really is (or isn't).

First off, the catalog of songs is quite impressive and can easily lead a music nerd like me to spend two hours following the breadcrumbs to more and more new music. For example, I am currently working on a playlist of nothing but awesome 90's Hip Hop songs, but the music library on my computer doesn't have as much 90's music as I would like, so instead of spending weeks hunting down songs via the iTunes, Amazon, and torrent trackers I just fire up Spotify and search for almost anything I want. This inevitably results in me veering off course as one artist conjures up nostalgia for another. Most of the time I find whatever pops into my head, it's not perfect, but no worse than the alternatives and almost as good as OiNK (RIP -ed.) used to be.

Why is it so easy to wander off into tangential directions? Because Spotify's user interface is laughably easy to learn. This is a major component of it's potential to lure users away from the iTunes ecosystem. Everything is powered by the search box and the left navigation pane, without the clutter of many images and buttons vying for your attention (look at the iTunes Store home page to see what chaos looks like). Spotify always displays the last five items searched in the left pane, so if you do stroll away from the path it's easy to find your way back. Another helpful feature are the Similar Artist links that appear at the top of most artist pages. Clicking on these links can open your ears to new music you previously had not heard or even didn't know existed.

Listening to songs is nice, but if Spotify is going to be the 'iTunes killer' some have made it out to be, then it needs to give users easy access to repeatedly listen to the music they like. This is where the Spotify shows the bulk of it's promise, but with one big caveat--mobility. See, right now I can only enjoy this music on my computer. Downloading these tracks to my hard drive is out of the question, unless I want to purchase them from 7Digital.com (the only store integrated with Spotify), which is a nice store but definitely not as robust of a catalog as other competitors.

In fact, most of the songs in my playlists cannot be purchased through Spotify, which means I have to find them elsewhere (torrents, iTunes, etc.) if I want to enjoy them on my iPhone...today, that is. As of last week mobile apps for iPhone and Google's Android platform are available, but only for users in officially-sanctioned countries (i.e. not the US) and only for premium subscribers. This means I haven't been able to take the iPhone app for a spin, but the video demo below illustrates how immensely convenient it makes it to enjoy your music wherever you are.



That offline access perhaps the most significant feature Spotify has that other streaming apps (imeem, last.fm, Pandora, etc.) have yet to figure out and it's the one thing that should make Apple nervous. Now, as long as users sync everything while they have access to a wireless connection (much like syncing music with iTunes before you leave the house), their music will always be up to date. It's a type of convenience that hasn't been seen before and it has the potential to change how we consume music, but will it make any money?

That last question is tough to answer. I do know that most users will always choose to tolerate some ads in exchange for free content, but ad-supported business models need a certain percentage of users to pony up for premium content in order to stay solvent. So far the added value of paying for a service that is mostly usable for free hasn't swayed enough users from the competition to part with their hard earned cash, but none of those services offer the convenience, sound quality, and speed (did I mention, Spotify is P2P-based, and thus has near instant buffering?) that Spotify does. For this reason, I think it would be a smart business decision for mobile access to always be a feature for premium users. Or perhaps they could strike a compromise and offer a "Lite" version of the app for free users that doesn't allow offline listening?

Whatever the case, Spotify's long-term outlook depends on how much revenue they can generate for their content partners. In fact, there's already talk about tweaking the business model before the curtain rolls up on US availability. The bulk of this revenue will have to come from the number of users that can be converted to paid subscribers, but people aint gonna pay unless it truly makes the service noticeably better. Perhaps if they could envision a world in which virtually any song they want can be accessed from their phone and their own library always stays sync'd no matter where they are, then parting with the cash would seem like a smart choice. Spotify might not be there today, but it's the first service I've seen with a puncher's chance of making that vision a reality.

>>>Continue reading "Does Spotify Have What it Takes to Challenge the iTunes Juggernaut?"

Another Festivus Miracle! The RIAA Pledges to Stop Suing its Customers

[photo courtesy of Flickr user Toshi Hoo]

The slow death rattle for the major record labels continues. After 10 years, the geniuses at the RIAA finally decided that it's probably not smart for business to continually sue your own customers. I know, it's a revolutionary concept.

Much like their unceremonious retreat from DRM-laden digital music, the brain trust at the RIAA realized their customers aren't necessarily "criminals" for downloading music for free and that maybe they don't shop at iTunes or Rhapsody because they want a little more control over the music they buy. Of course, rather than focus their energy on harnessing the powerful marketing power of free digital distribution, the RIAA instead plans to redirect their lawyers towards Internet service providers.

I suppose the silver lining in all of this is that from now on the worst that can happen for downloading copyrighted music is your ISP cutting you off completely. It's still a stupid penalty, but at least it's preferable to spending thousands of dollars defending yourself against a rigged judicial process. So, for now I will rejoice in the end of this sordid chapter in music history and crack a beer in celebration that I managed to escape the clutches of the RIAA over all these years and have TONS of music to show for it.

>>>Continue reading "Another Festivus Miracle! The RIAA Pledges to Stop Suing its Customers"

Surprise! MySpace Music is Every Bit as Lame as You Would Expect it to be

The much hyped, and often delayed, MySpace Music finally made its big debut to the public this week and the response has been tepid around the blogosphere. Now, I will admit that I don't particularly like MySpace very much. I find their interface very annoying (I'm a facebook user) and think too much of their core audience is obsessed with showcasing how beautiful they think they are instead of actually connecting with people in any way that isn't completely vapid. Still, I recognize the important role MySpace has played in music discovery over the past five years (honestly, remember how hard it was to sample new music for free before MySpace was around?) and was somewhat intrigued to see if MySpace Music could deliver on its promise to unseat iTunes as the premier destination to discover and purchase music. So far, I see little chance of that happening anytime soon.

For those of you who may not know, MySpace music is a joint venture between News Corp. (parent company of Fox Interactive, who owns MySpace) and the four major record labels who comprise the RIAA. See, the majors were upset digital downloads took off in popularity sooner than expected (thanks to the iPod and iTunes) and that their existing revenue-sharing contracts with Apple didn't give them a large enough share of download profits. Their answer was to create a music ecosystem that provided both revenue from music streaming (in the form of advertising) and download purchases. All the content would be controlled by them and the profit sharing would be setup more in their favor, thus finally creating a long term business model for digital music (in theory). The only problem is the people who designed MySpace music don't really understand how their target demographic prefers to consume this content.

I find it very ironic that MySpace Music launched the same week that Muxtape finally returned from its brief RIAA-mandated purgatory as a shell of its former self. MySpace Music includes much of the same features that Muxtape used to provide. You can create playlists and share them with friends (though only with other MySpace users, who must also be in the US, and only if you call embedding the playlist on your profile "sharing"), as well as purchase songs on your playlists from Amazon (though Muxtape actually allowed you to purchase from iTunes as well as Amazon, and it still did this part better than MySpace Music). Of course, the key difference between the two services was that Muxtape allowed users to upload whatever content they wanted to share, whereas MySpace users can only consume songs the RIAA allows artists to upload. Nevermind that the only way to download a track found on Muxtape to your computer was to buy it on Amazon or iTunes, the RIAA views all unsanctioned streaming as "stealing." Therefore, one of the most useful and simple music sharing services was killed and in its place the RIAA gives us this shit.

Obviously a major selling point of MySpace Music is the built-in user base of their flagship social network. But as News Corp., Google, Facebook, and advertisers across the Internet have learned, a large audience doesn't always translate to desirable consumers. Also, do you really want the same people who made Tila Tequila and Katy Perry household names shaping the future of the music industry? Me neither.

What's more, there are already many places where people can discover, share, and buy music (Last.fm, iLike, imeem, and Mog are a few examples) that do it way better than MySpace Music does. In each and every one of those examples the RIAA had nothing to do with their creation, which means they served the interests of music fans above the interests of faceless corporations. Until the powers behind MySpace Music understand how to do that effectively, I don't imagine it will be as successful of a business model as they hoped.

>>>Continue reading "Surprise! MySpace Music is Every Bit as Lame as You Would Expect it to be"

The Music Industry Continues to Cut Its Nose Despite Its Face

While the RIAA has made some baby steps in the right direction in recent months (linking up with Last.fm and finally acquiescing to consumer demand by ditching DRM at most major digital music stores, for starters), the fact remains that the traditional music industry is still way behind the curve when it comes to harnessing the marketing potential of the Internet. This is why nearly every single advancement in how people interact with and discover music has been developed by people outside of the corporate music ecosystem. In fact, many were created as a direct response to the many flaws of that system.

Take the example of Pandora. Terrestrial radio had grown increasing stale over the last 20 years, with fewer and fewer stations offering listeners consistent quality or variety, so it took the work of some musicians to create a service that would allow listeners to create custom radio stations that select music based on their listening habits. Imagine that, a radio station that plays music you like! What a wonderful concept! Of course, if you're SoundExchange (the organization that collects royalties for music performed for public consumption), "listening" to music is tantamount to theft, and therefore Pandora must "compensate artists" before it can be allowed to exist.

In the analog world royalties are collected on behalf of songwriters and publishers for all forms of radio (terrestrial, Internet, and satellite), yet only Internet radio and satellite are required to pay licensing fees to artists and copyright owners (eg. record labels) since terrestrial radio is believed to serve as a marketing tool to promote music sales (gee, what a novel concept).

In March of last year the US Copyright Royalty Board, based on the recommendation of SoundExchange and after ignoring the advice of The International Webcasting Association, proposed new higher rates for webcasters to abide by. Since then webcasters have been in negotiations with SoundExchange to reach a compromise, with very little progress being made. Because of the new fees (which charge a fee on a per song, per listener basis. Something that adds up very quick for people who create multiple Pandora stations and listen for hours each day) Pandora founder Tim Westergren admitted this week that the current model is unsustainable for his company and if something isn't done quick Pandora will cease operations.

A similar fate may await Muxtape. Readers of this blog know that I am a fan of this Internet mixtape service, which I (among many others) use to share music with other enthusiastic fans. Keep in mind that Muxtape merely hosts music files and doesn't make it possible for users to download tracks. Everything on Muxtape is a music stream, much like you would see on MySpace. Furthermore, Muxtape provides users with links under every song that give them the option to purchase tracks legally from major digital music stores (Pandora does the same thing, BTW). Nevertheless, as of today Muxtape is down due to "problem[s] with the RIAA."

While the message on their website claims the shutdown is only temporary, the fact remains that the RIAA is once again bullying another valuable service that only helps listeners become more enthusiastic about music. Do you honestly think I am able to constantly recommend songs, artists and albums on this blog because I spend money on everything I listen to? It would simply be far too expensive to do this, so I sample and evaluate music through Muxtape, Pandora, Last.fm, blogs, MySpace, imeem, iLike, torrent sites, etc. before I ultimately part with my hard earned cash (in the form of legal music downloads, vinyl records, or concert tickets) for the things I like.

If the RIAA and their cohorts insist on crippling Pandora, Muxtape and the rest, then people like me will increasingly turn to the torrent networks to find what we want. This method is far more subversive and virtually impossible to monetize, which would only hasten the record labels' demise. If they wise up and learn how to embrace the new digital world then their business models might not become extinct in the near future, but if they choose to continue down this path then that extinction is most definitely certain.

>>>Continue reading "The Music Industry Continues to Cut Its Nose Despite Its Face"

Buy the New Walkmen Album or PEOPLE WILL DIE

In the age of digital music it's becoming harder and harder to establish the monetary value of the CD. Sales are in a free fall and distribution options are so cheap and abundant (MySpace, Amazon, iTunes, Last.fm, iLike, etc.) that people expect music to be given away, or, at the very least, extremely cheap. So, what's a band to do if they want to release an album out into the wild, but don't want a bunch of freeloaders downloading it for nothing? Donate all the proceeds to charity, of course.

That's exactly what The Walkmen did earlier this week when they made their fourth studio album (I don't count Pussy Cats, since it was a cover album) You & Me available for download (DRM-free, naturally) so long as fans were willing to pony up a $5 donation to benefit the Memorial Sloan-Kettering Cancer Center. Considering not one cent of the donation goes to the band, you could still say this album was given away for "free". At least that's how I choose to view it.

So, donating money towards cancer research is a nice gesture, but what about the music? I'm a tad biased since I love the Walkmen and think all their albums are great, so my opinion is generally inclined to giving them the benefit of the doubt right off the bat. Upon first listen, I'm literally through nine of the fourteen songs as I write this, it seems a bit more focused than their last effort (which I still liked). More of a mix between the shimmering melancholic guitar drone of Everyone Who Pretended to Like Me is Gone and the Americana rhythmic sound of A Hundred Miles Off. Not a leap forward, but definitely a noticeable refinement of the band's signature sound, which I think is more indicative of how they come off in a live setting (which is a treat to see, BTW).

I will give you a taste below, but that's all you're gonna get because cancer patients are depending on you, dammit. Seriously though, it's only a measly $5 donation. Don't be a cheapskate and buy the damn thing if you actually like it.

The Walkmen - "In the New Year" (from You & Me)

>>>Continue reading "Buy the New Walkmen Album or PEOPLE WILL DIE"

Pitchfork Aims to Pickup the Baton Dropped by MTV 10 Years Ago

With Trent Reznor, Radiohead, MySpace, YouTube, the iPod and bit torrent slowly dismantling the record industry as we know it, it was only a matter of time before somebody set their sights squarely on the other media conglomerate that's been sucking the life out of music, MTV.

We've all heard the tired-but-true gripes with MTV a thousand times over. They never play videos. The videos they do play suck. Too much focus on buffoonish rap music. There's WAY too many reality shows. Etc., etc., etc. For whatever reason, no suitable competitor has ever challenged their superiority on cable TV, but with more people looking first to the Internet (and away from MTV, radio and record stores) to discover and acquire new/old music, the time is ripe for someone to fire the first real shot across MTV's bow via an Internet cannonball.

Indie criticism juggernaut Pitchfork Media is just that someone as they announced this week the creation of Pitchfork.tv, a 24-hour web music video channel that promises to "[document] independent music as it happens". The new venture is set to launch April 7 and promises music videos, live concert footage, mini and long form documentaries, exclusive interviews and other content. All of which is said to be available in high quality on-demand full-screen viewing.

Now, for those of us who read Pitchfork on a regular basis are well aware they aren't above harsh criticism themselves, but it's hard to deny that they do a good job covering the (mostly) independent music scene and offer a significant pipeline into musical content (good and bad) that many people would otherwise not know existed. Both of these components (along with its large audience) should serve them well in being able to succeed in their mission. Moreover, sponsorship, advertising and cross-promotional opportunities should give them the flexibility to keep the service 100% free, while potentially opening up a significant revenue stream that may inspire others to follow in Pitchfork's footsteps.

Currently, web video remains a largely unproven source of revenue. The main problem being an inability to monetize the large pools of traffic that web video can attract. In this regard, even YouTube, which is owned by the most successful and powerful Internet advertising corporation on Earth (Google), has been unable to turn their 16 billion monthly page views (according to ComScore data) into a profitable revenue stream. While this will absolutely be a challenge to Pitchfork.tv, they do have the benefit of having a more easy-to-define target demographic (ie. it's easier to target ads that users won't ignore) than YouTube and can also lean heavily on the blogosphere, which is almost certain to send waves of traffic over to their videos (especially if they are easy to share with others).

If they play their cards right (say, tie in sales of higher quality content that is playable on iPods/Zune/mobile phone/and television screens or partner with the big Summer music festivals to provide live streaming content) Pitchfork.tv could become a huge success and serve as another watershed moment in a series of watershed moments for the music industry. My hope is that the site becomes everything I think it could and should be, while other visionaries follow suit with their own web video networks and MTV fades into oblivion. What a happy day that would be!

>>>Continue reading "Pitchfork Aims to Pickup the Baton Dropped by MTV 10 Years Ago"

Trent Reznor Teaches Radiohead a Thing or Two About Digital Distribution

First things first, February was an ATROCIOUS month for this blog. Seven posts in 29 days? That isn't the kind of production I expected from myself when I started this blog. Last month was a hectic month for me and I rarely left myself any time (or energy) to write. There's so many things I need to change that I think I get discouraged too easily whenever I conceptualize everything as a whole. For now, I'm going to make it a goal to just start writing and sort out the other shit later (which will include a redesign of this space). Sorry for being so horrible at life.

Anyway, the rapid demise of the major label-controlled record industry continued this week with the surprise release of a new Nine Inch Nails album titled Ghosts I-VI. What made this release so 'surprising' wasn't the lack of advance warning (after all, nobody knew a new NIN was even in the works, let alone completed), or the fact that is was released via a direct-to-consumer approach on the NIN.com website. What made it stand out was Reznor's creative (and might I add, superior) improvement on the whole digital pay-or-don't pay model that Radiohead popularized with In Rainbows.

Instead of asking consumers to name their own price, Reznor decided to offer Ghosts in a variety of formats (high quality 320kbps MP3, FLAC or Apple Lossless) and packages, ranging from free to uber-expensive. For the casual fan there's a free download of Ghosts I, which includes eight tracks, available through NIN.com or via bit torrent networks. In the coming weeks parts II-VI will be made available for free download. While those who want the complete four part collection can download it through the Nine Inch Nails website or the Amazon Download Store (I recommend this option, since the download speed is much faster) for the affordable price of $5, which includes a beautifully designed digital booklet and collection of desktop wallpapers (in both standard and widescreen formats). Mr. Reznor also beat Radiohead by giving fans the choice between paying via credit card or PayPal.

For the more serious NIN fan there's a standard 2-CD set for $10 (available April 18th, but with free download privileges thrown in). Die-hards can choose the $75 Deluxe Edition, which comes complete with the 2-CD set, download code, data DVD with all 36 tracks in multi-track format (under a Creative Commons Attribution Non-Commercial Share Alike license explicitly for creating custom remixes) and a high definition 96/24 mix on Blu-Ray disc. And the super duper uber-fans can shell out $300 for the Ultra-Deluxe Limited Edition package (limited to 2,500 copies and now sold out) which includes everything in the Deluxe Edition plus Ghosts on four 180-gram vinyl records and two hardcover photo books.

What Reznor has done here is perfected the "Radiohead Model" and made it scalable (thanks to bit torrent and Amazon) and flexible to the point where the consumer can choose whatever level of commitment fits their interest. He made good on his critiques of Radiohead's execution and showed the world that fans value content that can adapt to their digital lifestyles. From the casual user who just wants music that will work on all their digital devices (and doesn't treat them like a criminal for shifting that content back and forth) to the hardcore fan who wants an interactive experience, Trent has you covered. He has also proven that customers will pay a premium for extra content, so long as it carries added value to the end-user. And I can't think of anything that adds more value than allowing the user to create their own remix and post their work on Remix.Nin.com, where a community of users can listen, vote and discuss your creation.

Admittedly, not every band can pull off such an ambitious undertaking, but certain aspects (like employing bit torrent distribution and high quality digital formats) can be mimicked by virtually any type of band. Indeed, the times are changing and it's great to see the artists wrestling away control from the record labels and determining their own fates. I can't wait to see what they think of next.

>>>Continue reading "Trent Reznor Teaches Radiohead a Thing or Two About Digital Distribution"

New iPods, Same Old Problems

As you probably may have heard, Apple has announced a slew of new iPods to the public and already everyone has an opinion about them. As a self-professed gadgethead with his own blog, I wouldn't miss out on an opportunity to weigh in with my two cents about the iPod. Since this blog's target audience is music lovers, I won't bore you with any discussion about the technical/design characteristics. Instead, I would like to talk about what the new iPods mean for the music industry and music consumers.

In the interest of full disclosure, I am a proud iPod owner, but by no means an Apple fanboy. Don't get me wrong, they usually make high quality products, but I often take issue with how Steve Jobs is able to evade criticism for legitimate gripes like the restrictive DRM of iTunes and the iPod/iPhone and their limited codec support. Also, there is a tendency for people to look at their products as 'lifestyle' devices instead of consumer electronics meant to perform certain core functions well.

It is through this looking glass that I frame my opinion on the latest iPod updates. While the iPod Touch is undoubtedly the flashiest iPod to date (basically, it is an iPhone with out the phone or email capabilities), does it still put the focus on its primary motives for use (listening to music and watching movies)? It's obvious that the new form factor and larger screen indicate that Apple's focus lies with giving consumers a better video experience, and less so on listening to music (hence no added codec support or graphic equalizer) . As the demand for time-shifting video content continues to grow, Apple seems to be giving customers more of what they want; a visually appealing and convenient viewing experience. But what is lost in this whole equation is how difficult it is (read: expensive) for users to take their content wherever they want.

If the wave of the future is video-on-demand, then why are there so many competing methods of content delivery (iTunes, Amazon UnBox, Netflix, Movielink, etc.) and yet none of them are compatible with each other? Why can't I transfer recordings from my TiVo to my iPod without paying twice (TiVo subscription + iTunes download prices) to watch the same content? Apple may not be the only one to blame for this confusing mess (the RIAA and MPAA are equally culpable), but they are the one company that has enough sway to change the rules of the game. Instead, they continue to drive everything to one product (iPod) and one media store (iTunes) and bank on the fact that their image-conscious consumers will continue to put up with their restrictive digital ecosystem as long as their products serve a dual purpose as fashion accessories.

Earlier this year Apple began offering tracks from EMI artists DRM-free, which were also higher quality than normal iTunes downloads. The lifting of copyright restrictions and better sound quality meant that Apple could charge $1.29 per song (instead of the standard $0.99) and open compatibility up to non-Apple music players. This was a step in the right direction and I wish Apple would pressure the other music labels to follow suit. Not everyone who steals music online does so because they are cheap. Many of us do so because we want the freedom to do whatever we want with our digital content and also because paying $9.99 for music that is of inferior quality to a CD is not considered a 'value.' Hey Steve Jobs, how about you sell us some music in lossless format (preferably FLAC, but Apple Lossless will do) and make sure it is playable on iPods? Customers will pay more for this luxury, especially if it is DRM-free.

The truth is that freely available copyrighted music (i.e. illegal) that is fount on torrent sites and peer-to-peer networks across the Internet is often of better quality than what is found in most online music stores, but if Apple (and others) took the shackles off their content and gave users better choices then less people would feel compelled to steal their music. Companies like eMusic recognize this and have built successful business models around this concept. If Apple followed suit, then perhaps the entertainment industry would finally be forced to embrace the digital revolution and abandoned their antiquated business model. >>>Continue reading "New iPods, Same Old Problems"