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The game has now changed. |
About two months ago,
I wrote about the major labels' inability to partner with Spotify, a music streaming service that is wildly popular in Europe.
Similar to Pandora Radio, Spotify's free service offers streaming music from the Internet (for up to 20 hours a month). Unlike Pandora, however, Spotify allows you to choose exactly what music you want to listen to, rather than listening to a pre-programmed station that randomly selects songs based on your station.
How are the labels agreeing to this frighteningly perfect deal? Advertising.
Up until now, there was only one game in town that offered a similar deal.
Rdio operates the same way, except the user must pay a minimum of $4.99 per month. With Spotify, banner ads sustain the free online service.
This doesn't mean you absolutely
must see banner ads while listening to all this legally free music. For $4.99 per month, Spotify offers a "Premium" service that removes the banner ads. And for $9.99 per month, the service will allow you to download software that supports Spotify on- and offline.
Spotify offers more than 15 million songs to the user's disposal. These songs are coming straight from the Big Four: Warner, Sony/BMG, Universal and EMI.
Similar to the "YouTube" deal I outlined in that previous blog post, Spotify will finally test the American music market in a way that it has never been tested. Major labels will now see what the long-term effects are of ad-supported music, and consumers will finally be able to test the lifelong wish of having a worldwide library at their disposal.
So what does this lead to?
1. The End of Piracy (maybe)
This will never be a full-truth, but seriously; with an Internet connection, what is the need for piracy anymore when the majority of desired music is completely at your disposal?
2. Better Competition
So far, the major players (Amazon, Apple and Google) have proved that their music services have been somewhat inefficient. Amazon and Google take too long to load and don't support protected files, and Apple is fairly expensive compared to any of the aforementioned plans.
3. Upward Profit for the Big Four
This is a tricky one. But, if like the YouTube videos, advertising proves to offer its services where the American wallet does not, this could mean big profits for the record labels. If the consumer decides not to pay for music, what's to keep the private sector from keeping the labels afloat for now?
Like I have said before, all you need is a digital-friendly service. If you offer it, they will come.
What do you think about Spotify's plan for the U.S. market? Comment below!