Every new record at your fingertips? Meet Spotify

As I write this I'm sitting in a lodge in Breckenridge, Colorado, with no Internet access and I'm listening to the latest by Death Cab for Cutie using red-hot music streaming service Spotify.

Spotify is the latest import from the Sweden that is promising to revolutionize how we listen to new music. It became available in the United States a couple weeks ago after thriving in Europe since 2008. Now with 10 million "subscribers," the service lets you stream music via the web from a selection of 15 million songs, including most new indie releases, all for free (20-hour limit per month with advertising). For a mere $4.99 a month you can get unlimited access with no ads; and for $9.99 per month you get all the above plus access on your cell phone and "off line" (how I'm listening to Death Cab right now).

Sure, there have always been other on-demand music services that offer similar content -- Grooveshark, Rdio, Slacker, good ol' Rhapsody -- but none offer as many songs along with an iPhone app. Spotify's promise of being able to listen to any song at any time was too enticing to pass up, so I bought a premium subscriptions, downloaded the app and got started.

My first Spotify selection: The new one by Low, C'Mon, on Sub Pop. I've been itching to hear it. Unfortunately, when I tried to play it, the only thing I got was a "licensing not available" message. Strike one, Spotify. Instead, I tried the new one by YACHT, and The Antlers, and Cults, Ride's Nowhere, Jesus & Mary Chain's Stoned & Dethroned and KISS Alive. All were there. All sounded fantastic. But later, when I tried to listen to Led Zeppelin I or anything by Zeppelin or Pink Floyd, I came up empty. Strike 2, sort of (I already have everything by Zeppelin and Floyd, on vinyl).

There has yet to be a Strike 3. For someone who thrives on new music, Spotify is a dream come true. And for just $9.99 a month, imagine how many bad record purchases I will now avoid. Which brings up the next question: If I don't need to buy records anymore, won't labels and artist hate this service?

"Well, I think it's pretty sweet," said Robb Nansel, one of the guys who runs Saddle Creek Records. He's had a trial version of Spotify for a few months.  "I like it. I think there can be some improvements, like how you find music. You have to know exactly what you're looking for, there aren't a lot of discovery tools built into it. But just having access to anything whenever you want is pretty great from a user point of view."

Nansel said Saddle Creek worked its deal with Spotify though Merlin, a trade organization that represents a lot of indie labels around the world. Think of it as a collective bargaining organization that levels the playing field between majors and indies. "They've been working with Spotify overseas the last few years," Nansel said. "They brought a deal with the states that we could take."

He said Saddle Creek and its artists get a cut of Spotify's ad revenue based on the number of their songs listened to by service subscribers each month. "At this point, the amount is minimal within the United States," Nansel said. "But it's starting to be something worth considering in the U.K., because they're subscriber base is getting so big. It starts to make even more sense when it has 50 million subscribers."

While ad revenue is fine, Nansel said the big money comes from paid subscribers. "Spotify wants to take this to a cable television analogy," he said. "If you can get that mass population to subscribe to this model, than the dollars for labels and artists are superior to what they were in the heyday of CD sales. At least that's the pitch they give to labels."

But could Spotify ever get that big? Nansel's not so sure. "Most people in the U.S. don't spend $9.99 a month on music," he said. But who remembers when television was free? "Cable TV has succeeded in that people pay for cable. If you can get those sorts of numbers, the music industry looks a whole lot better, but I don't know if you can."

Nansel said Spotify also tries to sell itself as a "discovery tool," not a replacement for music sales. "I definitely use it that way," he said. "I'll check stuff out that I wouldn't check out otherwise, and if I like something I buy it on vinyl. But I'm older, so maybe it's not the same logic for someone who's younger."
 
Nansel also wasn't sure how Spotify could impact Saddle Creek's future. "We'll have to wait and see," he said. "If ad and subscriber revenues are bad, we won't be talking about Spotify in two years."

So what does Spotify mean for the future of the ailing compact disc? "I don’t think it's a huge nail in the coffin, but another baby step along the way," he said. "I can't see the compact disc being around in how many years. Vinyl will have a place, a niche. Most people consume (music) digitally and a smaller subset consume physically. More elaborate packaging fits vinyl nicely. The convenience of the CD is what made it attractive."

Mike Fratt, who runs Homer's Records, called the idea of CDs going away "more tech hype bullshit. A relentless drum pounding of 'CDs are going away' for the last 11 years has resulted in what? CDs still representing half the business."

On the other hand, Fratt said services like Spotify could be a threat to terrestrial radio, but that's another story…

Lazy-i is a weekly column by Reader senior contributing writer Tim McMahan focused on the Omaha music scene. Check out Tim's daily music news updates at his website, lazy-i.com, or email him at lazy-i@thereader.com.

posted at 08:51 am
on Monday, July 25th, 2011

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