The new age of music distribution is upon us. I’ve said it before and I’ll say it again; the music industry is due for a change and now, Australia is about to jump onboard with the next global shift in how we hear music.
Going down to your local record shop is well and truly behind us. Purchasing songs from Amazon and iTunes are about to start fading back with CD’s. Spotify is jumping in the driver seat.
The London-based, Swedish website provides users with access to stream any song from their catalogue. Like YouTube, Facebook, Twitter and every other free web service provided to us at no charge, Spotify makes its money in advertising. 15-30 second advertisements are played in the Spotify player to non-subscribers, using the product for free. Users can opt to remove the advertisements by paying a $10 monthly fee. This subscription fee also increases the bitrate and removes streaming limits.
Spotify works on a digital-rights management model, where they obtain the license to play copyrighted music, costing them a reported €45 million in 2010. However, they have obtained the rights to Warner Music Group, EMI, Sony, and Universal, amongst many other major and independent labels.
Working on the idea of music being social, all new members are required to log on through Facebook, which shows your friends what you have been listening (not the place for your secret love for Taylor Swift), and premium users can access Spotify through their Smart Phone app.
Until recently, Australia was not on the list of countries that fell under Spotify’s reach but in the coming months, it looks like we’ll be getting a taste of online music rentals.
However, the company has yet to report any profits, though market analyst, Martin Scott, claims 2010 should have seen a $6-7 million profit, so the rapid growth that came from 2011 and what is projected for 2012 should mean big things for this new(ish) model (Pandora got there first but they haven’t made a profit yet and realistically…who still uses that site?).
At the end of the day, the labels are happy because they can charge an arm, two legs and maybe an extra finger or two for royalties. The artists are happy because their music is still being heard, their wallets still being filled and their ego is still measurable. And we, the people should be happy because if so we choose, we can still get our music for free without having to worry about a lawsuit landing on our lap. In the words of Charlie Sheen…WINNING!!!