Tech Review: Spotify

Based on the article, "Top Swedish Music Exec Shares What To Expect As Spotify Launches In U.S." from hypebot.com

Spotify, the Swedish based music-streaming mongrel, announced this week that it’s services will finally be available in the US. Led by former AmazonMP3 executive, Scott Ambrose Reily, the branch’s New York City location is funded by a 9 million dollar expansion from X-5 Music Group.


According to X-5’s CEO, Johan Lagerlöf, Spotify has completely transformed Scandinavia’s music purchasing habits and eliminated music piracy. “Spotify has had the biggest impact on the Scandinavian music market since the launch of the CD. Spotify is currently the biggest single revenue source for the music industry and is estimated to be over 3 times bigger than iTunes in Scandinavia,” says Lagerlöf. On top of it, digital downloads in Scandinavia grew 17% last year compared to the US’s 3% growth. Spotify even shut down the Swedish site, Pirate Bay, convincing most of its users to sign up with Spotify in one of two ways: un-paid subscription with ads or a “premium” subscription commercial free. Interestingly, of Spotify’s 10 million users over 1 million of them are paid subscribers. What is it about Spotify that’s got people paying for music again?


European music executives jumped on board with the project by contributing funds and moral support creating a positive message to consumers that the music CEOs are no longer the “bad guys”. Spotify has made Europeans re-gain their respect for music and as a result, illegal downloading is something of the past; music finally has face value again.


Like the Europeans, I think Americans need an attitude adjustment towards music in order to revitalize music sales in our society. Spotify could be the Netflix of music proving that people still have it in them to pay for entertainment. But as Lagerlöf mentioned, getting American music executives to agree to Spotify’s terms might be difficult. The problem I foresee with Spotify is that it doesn’t initially make the artist profit, which will be seen in a negative light at first glance of the program. However, the long-term effect Spotify has on its users is proven to be beneficial to artists and therefore would increase album sales later down the road (but of course, this is America and we thrive on instant-gratification). Overall, I think Spotify is worth a solid try in the states. At this point, what does the music industry have to loose?






KGC