For those of us in the United States, it seems we’ve been hearing about Spotify forever. Like so many things that you hear about over and over, but can’t necessarily experience, I think the tales of instant music nirvana and market dominance soon to follow the service’s arrival here in the States grew taller the […]
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Has Spotify Found the Mass Market Sweet Spot?

For those of us in the United States, it seems we’ve been hearing about Spotify forever. Like so many things that you hear about over and over, but can’t necessarily experience, I think the tales of instant music nirvana and market dominance soon to follow the service’s arrival here in the States grew taller the longer they were told. Sure, Spotify has taken Europe by storm since starting up in 2008, but after trying the service out over the past few days, I have to wonder what impact it will have in the US in its current form. The whole overhyped affair has also gotten me thinking about the future of streaming music services, and what it will take for a US market in love with purchasing media to accept what is basically music rental.

First, let’s talk about my experience with Spotify. To be honest, I have never tried out any of the existing premium streaming music services, such as Napster, Rhapsody, Rdio, or MOG. I’ve never really had a need for them. I’ve always been about paying for music. If wanted a track, I just went onto iTunes or eMusic and bought it. I have subscribed to eMusic’s service in the past when I was looking to try out or find new music, but it is more in my wheelhouse. With them, the monthly fee is for a certain number of music downloads of your choice. The subscription includes ownership. What can I say. I prefer owning to renting. And at the end of the day, if my purchasing options weren’t meeting my needs, then I’ve been able to effectively hunt for new music with Pandora or Last.fm via their strong iOS apps.

However, with the recent boom in cloud and streaming music services of all kinds, I have been paying more attention to what is going in this arena. I really haven’t has much interest in Google Music or Amazon, because I really want a native iOS app for whatever I use, and neither of them offers this as of yet. Unfortunately, neither probably ever will. As such, I went with a free mSpot account, and filled it up with around 5 GB of music that I uploaded to their cloud based service. I have really enjoyed using it so far. I was looking for a way to listen to music on my iPad without having to store it locally, and mSpot fits the bill. Their free universal app is also solid and well-designed, which never hurts. mSpot isn’t perfect, however. Their free account limits you to one mobile device, but fortunately that isn’t a issue for me since that’s all I am looking to use it on. However, even though I like what mSpot gives me for free, I wouldn’t consider their premium service. It is a lot more storage than I need, and as such, far too costly for me.

As for Apple’s own offerings, I have definitely enjoyed the new Purchased Music list in the mobile iTunes app that allows you to re-download songs to any of your iOS devices. I also think that iTunes Match is a good, and reasonably priced solution for those who want access to all of their tracks everywhere, without all of the work and hassle of uploading and managing. However, like many others, I was left a little flat by Apple’s recent announcement, as I really want a way to upload tracks to the cloud and do a little streaming to help free up some space on my iDevices. I guess I’ll be holding on to the free mSpot account even after iTunes in the Cloud is fully out in the open. Who knows. Maybe Apple will end up surprising us, and offer their users some streaming storage space in the giant North Carolina data center, but I wouldn’t count on it yet.

So, even though I have never been that interested in buying a streaming music subscription, the massive hype buildup for Spotify, combined with the lack of a perfect solution elsewhere, piqued my interest. An already mature and successful music service with a free offering, native apps, and tiered subscriptions seemed like it might just work for me. However, the only way any service would truly fit the bill is with reasonably priced, native app access on iOS. My hopes were high when Spotify officially announced their rollout here in the US, but I was quickly disappointed with what I saw. Just as every other major subscription service, Spotify only allows mobile use with their highest subscription tier of $10 per month. Sure, they dangle the carrot of limited free access on your PC, but that doesn’t do much for me. Maybe a lot of users still want to listen to music on a PC or laptop, but that doesn’t seem to be the trend these days. I guess that’s why mobile access is always tied to a higher priced subscription.

I went ahead and coughed up the $10 to see if I was missing anything. As far as the service itself goes, it works well. There is a lot of music available, and the search functions of the app work well, as long as you know exactly what you are looking for. So what’s the problem? Well, there are a few glaring ones that I see, starting with the $10 already mentioned. I almost went to MOG before trying Spotify, because they wisely offer a fully featured, two week free trial. This includes being able to use their free mobile app to stream. Being the new kid on the block of streaming services in the US, Spotify should take notes. If they want people who already have subscriptions to give them a shot, they need to demo their full experience. This almost stopped me from trying Spotify altogether.

The second major problem I have with Spotify is with their apps. Spotify does deserve some credit here, as they offer a better selection of native apps than the competition, with Windows, Mac, iOS, and Android versions all available at launch. However, they could certainly use a little more polish. The Windows app is ok, I guess, but it isn’t all that feature-packed. It handles the basics adequately, and it is stable. It also lets you see all of your locally stored music, along with its own library, which is a big plus. However, there is very little in the way of artist information or reviews. Even if it doesn’t make sense for Spotify to generate content themselves, they could at least link out to better resources, or partner with services that can provide it.

The desktop app also isn’t very helpful in searching for new songs or artists based on ones you already enjoy. I can understand these limitations for a free account, but if I’m paying for a premium subscription, I want premium features. If I am paying for unlimited access to music, I want to be able to take advantage of that, without having to go elsewhere to do my searching. It isn’t good enough for Spotify to simply offer more music. If they want people to come over from other services, they will have to give existing consumers more compelling social, search, and playback features to make that happen.

On that note, while I much prefer using a native desktop app to having only a web interface for music management, it would be smart for Spotify to make one available. All of their competitors offer web music portals, which do have their place at the table. Again, if I am paying the same for a premium subscription, I want the most I can get for my money. Having a web-based option gives me the freedom to listen to my favorite music anywhere, even when mobile access won’t do.

While the Windows app is at least, despite its shortcomings, functional (and I am told the Mac app is even better), it is the iOS app that really left me flat. It isn’t too bad, as far as features go. I am realistic, and don’t expect the same level of functionality in a mobile app as I do in a desktop version. However, I do expect stability, and that I did not get. Spotify’s iOS app has crashed on me numerous times. In fact, I have never been able to create a playlist from the app. (And, just for the record, I am not running a beta version of iOS 5 on my iPhone.)

The playlists weren’t my only problem, either. Since I couldn’t create playlists, I resorted to putting all of the interesting music that I found using the app in my Starred list for later listening and organization. Unfortunately, that list spontaneously cleared out itself twice, meaning I had to go back and try to remember what I had looked up three times. If I am going to invest in a streaming music service long term, I have to have reliable mobile access and features. On this count, the Spotify app really left me underwhelmed. The issues are especially glaring when you consider that, even though Spotify just rolled out in the US, this app has been in the App Store in other countries for a few years now. For $120 per year, that’s just inexcusable. For the same price, I can subscribe to Rdio or MOG, and get higher mobile bitrates and what appears to be a more stable app experience (based on user reviews).

Spotify’s iOS app also has another major issue- one of perception. It’s really too bad that Spotify didn’t get its service rolled out in the US a year or two ago. If they had, this app wouldn’t look so anemic when used with a free account. While you can’t do any mobile music streaming at that level, you can play locally stored files synced from a Spotify desktop client. Getting a free client that would sync all of your chosen music wirelessly, independent of iTunes, and not locked to a single machine, would have been a huge selling point until recently. However, with iCloud, iTunes Match, and Local WiFi Sync coming within the next two months, Spotify’s mobile app looks ridiculous for free subscribers. It really does nothing of value, at this point. Why sync all of your music with Spotify, when iTunes will do the same thing, and you already have it?

Spotify also didn’t do a very good job of clearly spelling out what the app’s purpose was at the free account level. Even though many users who left scathing reviews in the App Store clearly didn’t take the time to read all of the fine print about what Spotify is doing or what it costs to get mobile streaming, this was also poor marketing and branding on their part. They need to be even more up front about what the free version of their service get you on a mobile device, or just lock the app completely out at that level.

Now we come to the real issue. The issue of price. I’ve been beating up on Spotify because they’re the new kids on the block and had a so much hype buildup here before launch. However, since all of the major streaming services charge the same monthly fee for premium subscriptions, I might as well be talking to all of them now.

A lot of people probably think $10 per month for all the streaming music they can stand is a fair price. To be honest, it probably is fair in the current market. I do understand that you have to pay to obtain or “rent” music legally. The key to mass market success, however, is not just charging a fair price for such a service, but a no-brainer, impulse buy, market shaking, universally affordable price. Apple built its media empire based on this principle, and while we all heard that Spotify would change the game when it finally arrived in the US, I think it ultimately falls short as it is right now. Of course, so does their established competition.

Spotify will more than likely grab a chunk of the enthusiast/early adopter market on pure hype and momentum alone. There are plenty of people who have been waiting specifically for Spotify to arrive in the US, so they will probably be willing to jump from their current providers to try the flavor of the month. For those who are already happy with Rdio, MOG, Grooveshark, or others, I don’t see where Spotify currently offers a truly compelling reason to switch right now. Both Rdio and MOG have higher mobile audio bitrates, and both offer the same offline music for mobile devices that Spotify currently does. Unless you really want to have native apps on all of your platforms, or can be content with desktop-only use at the free or $5 per month Unlimited subscription levels, I don’t see any kind of mass exodus happening here.

Putting the early adopters and tech crowd aside for a moment, will Spotify be able to go further than others have already? As the service stands right now, I would say not much. At least not yet. They are to be commended for getting the licensing in place to offer a free subscription, even if it is loaded with ads. This will probably hook enough fish to make Spotify a profitable endeavor in the US. However, as I said before, the mass market doesn’t live at $10 per month. If they did, Rdio, MOG, Napster, and Rhapsody would all have massive subscriber roles. But they don’t. And at the continued price of $10 a month, no one will.

In my opinion, Spotify could easily fix this issue. If not them, then someone with enough guts to take a risk that will either make them the next big thing or put them out of business. That, or Apple can pull it off with their combination of advantageous relationships with the record labels, and mountains of cash that could absorb some early losses. However, since Spotify had the creativity to put forward a compelling free streaming offering, I’ll give them the early nod in this race.

A simple, middle of the road offering could really make a dent in the competition and put real pressure on Apple’s iTunes. If Spotify would offer a lower tier of mobile access at $5 per month, that would be the perfect dangling carrot in my humble opinion. Sure, it would have to be limited somehow, with either lower bitrates or no offline mode, but it would get more people to try the service. Some users would stick there, while other will get hooked and move up to premium subscriptions. Right now, that’s the name of the game. Spotify is using all its built-up hype to get people in the US to try them out. However, with their current subscriptions plans, I think that attention will eventually wane. Spotify can get a lot more in the door with a little honey to sweeten the deal, and with the right price, they can keep them.

As for me, I’ve had enough of researching all this. I’m getting ready to roll over and go back to sleep for a while. I didn’t really pay attention to streaming music services until recently, and I’m about to tune them out once again. While I have enjoyed listening to a lot of music that I don’t own with Spotify, that just isn’t enough for me to fork over $120 per year and end up owning nothing at the end of the day. Either Spotify or someone else is going to have to do better for me to sit up and pay attention again.

As with seemingly all things in tech, however, this situation will change. Eventually, someone will come along and build a better mousetrap. Palm did it with the PDA. Dell did it with inexpensive, build to suit PCs. Google has done it with search and services. Netflix has managed it with video, including streaming video. Apple did it twice: once with the iPod and iTunes, and again with the iPhone. In each of these cases, a stagnant or dormant market was jolted to life because the right product or service came along at the right time. Either Spotify, one of the other services mentioned, or someone else will eventually do the same. One day, we will have a more flexible streaming music subscription options that will include mobile device access. Someone nudge me when one day gets here. I’m going back to sleep.

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