Friday, May 29, 2009

Is "Cloud" Music Becoming a Reality?

Digital Music News ran a short item today about Spotify — a fast-growing free/subscription streaming service that's available overseas but not yet in the US. The article is about a demo of an upcoming app for Google's Android cellphone platform:

An Android mobile app was splashed at the Google I/O conference in San Francisco, a work-in-progress that quickly excited music fans and bloggers alike. As one would expect, the app demo featured on-demand access to a catalog of millions, using available WiFi. But users will also be able to access tracks while disconnected, a feature that eliminates a huge connectivity hurdle.

There's also a YouTube clip of a similar Spotify app for iPhone, which, to the best of our knowledge, has yet to be approved by Apple. If anything could compete with iTunes, it's Spotify, so it will be interesting to see if an iPhone app does indeed roll out with a Spotify US launch (rumored to happen later this year).

Although it's not officially available in the US, Spotify is starting to win converts among American music reporters and pundits. Wired's Eliot Van Buskirk says the service is “like a magical version of iTunes in which you’ve already bought every song in the world," and industry observer Bob Lefsetz has been moved to praise Spotify IN ALL CAPS on more than one occasion.

There are probably several reasons for Spotify's rapid adoption in countries like the UK, where it's been available for a year or so. The graphic interface is straightforward (and very iTunes-like), and, since it employs a robust desktop client, there is practically zero lag (yes, we've tested this.) Spotify also uses the superior Ogg Vorbis format for its streams, which means it actually sounds good. Perhaps most attractive is the fact that the service is free — as long as you don’t mind hearing a solitary audio ad every half-hour or so (there's also a paid version without the ads). This means that artists and sound copyright owners are compensated, which we think is top priority for any new digital music doohickey.

Keep in mind that Spotify is on-demand listening, not "predictive radio" like Pandora (which is also gaining popularity, largely due to mobile applications).

Music-tech analyst Andrew Dubber gives a useful overview of Spotify, which you can read here. Among his favorite features:

. . .every artist, every album and every track has a unique URL that can be sent via email, Twitter, IM, Facebook or any other kind of messaging system - and if the recipient also has Spotify installed, that music will play in exactly the same way it did for the person sending it.

Recently, Andrew made a recommendation via his Twitter feed; if you're a Spotify user, you could click the link and the album he was talking about immediately pops up and starts playing on your end. With the ubiquity of social media, it’s easy to imagine this becoming a powerful, cost-effective and legal way to share music.

Some have complained that Spotify, while rock-solid performance-wise, is lacking some essential features. On the other hand, the Spotify folks have opened their service to outside development, which likely means enhancements are forthcoming. Essentially, approved third-party devices and services would be able to use Spotify’s engine and catalog, which could be particularly fruitful in the mobile space.

There are also concerns that subscription and ad-based models don't pay artists and labels as much per play as downloads of physical sales. But that could change, especially if more people get hooked on listening this way. It could also help curb piracy — why take the chance on viruses and music in crappy bitrates, when you can get better quality tunes for "free" (or at a nominal cost)?

The idea of being able to listen to practically everything you'd ever want to whenever you want to isn't new. But American consumers haven't fully embraced such services, even with Rhapsody, Napster, etc. offering some version of subscription-based access. Will Spotify be the model that makes "the cloud" click? Only time will tell. . .


waltergross said...

Looking forward to giving Spotify a test drive when it makes it's way to the US. Comparatively or at least from what I've seen described about Spotify, would it be fair to say lala is a similar service? I've been using lala quite a bit lately and I find it to be a excellent cloud based music service.

Jon Smirl said...

The obvious monetization point is when people are selecting the music and building their playlists. Nobody wants ads in the streams.

Music industry should drop per play royalties and move to a model where websites are licensed in bulk without the need to track individuals. Then turn the RIAA pseudo police loose on web sites that won't license. Let the consumer do what they want with the songs - monetize at servers when people are picking songs and might actually pay attention to the ads. If picking was free, people would spend much more time picking.

They've also got to provide a per user cap on royalties to handle the case of a stream getting left on for a month with no one listening.

RIAA could add some real value by putting together a comprehensive (and error free) database of all of their music and collateral information. Make even more by selling real-time updates to the db that contain concert info, promos, etc. Now license use of this database to the server sites and leave the consumers alone. Let the server companies worry about how to generate enough revenue to cover the database fees.

If people could freely rebuild their music collection whenever they want, they'd give up on p2p. What consumer wants the responsibility of backing up purchased downloads? Monetize the rebuilding process.

FMC said...

Walter: From our observations, Spotify's streaming is much more robust when listening on a desktop/laptop, probably because it uses proprietary software that you download. Somehow this minimizes stalling and buffer issues, even on iffy connections. Lala has some other interesting features, but there are limits on how many times you can listen to a song for "free." We've also had a few issues with buffer hiccups. Of course, this is all on the consumer side -- not sure what the comparative licensing deals look like.

Jon: a lot of what you talk about here would probably require some kind of metadata standard for music, which would also help in terms of knowing which artists should be compensated for what use.

enigmafon said...

streaming is the future of music