Spotify Launched in Germany Without Key Licensing Deal


Spotify, the popular streaming music service, launched in Germany today. The company had been planning this launch for a while and had already been operating a German-language version in Austria since last year. Quite a few pundits assumed that the delay was due to rights negotiations with the German royalty collection agency GEMA. This organization is quite notorious for charging relatively high rates for music streaming, which was the main reason Grooveshark closed its German site earlier this year. The reality is a bit different, though: Spotify still hasn't signed a licensing deal with GEMA.

Talking to German public radio, Spotify acknowledged that the company is still negotiating with GEMA. As of now, the two haven't been able to reach an agreement, though the negotiations, which Spotify describes as "intense," continue.

GEMA, it is worth noting, has been negotiating with Google to set streaming rates for YouTube for years now. It's not unthinkable that its discussions with Spotify could also take quite a while. Just last year, Sony Music CEO Edgar Berger argued that "some members of GEMA's supervisory board have not yet arrived in the digital era."

11:17 am

Nielsen: Digital Music Sales Edged Out CDs and Vinyl for the First Time in 2011


Spend enough time on the Internet and you would be forgiven to think that physical music sales died a long time ago. In the real world, though, plenty of people still by CDs (and a few buy vinyl as well). 2011 was a watershed year for digital music sales, though, as, according to Nielsen SoundScan's year-end report for 2011, in the U.S., digital sales finally trumped physical sales for the first time last year. Digital accounted for 50.3% of all music purchases in 2011. In total, 1.27 billion tracks and albums were downloaded last year. That's up 8.4% from 2010.

It's worth noting that the majority of these sales was for single songs. Albums only accounted for 103 million sales. That's up from 86.3 million in 2010, but digital albums still only account for every 1 out of 3 sales in 2011.

Adele's "Rolling in the Deep" set a record by becoming the first song to see more than five million downloads in one year with 5.8 million downloads (it was closely followed by LMFAO's "Party Rock Anthem" with 5.5 million downloads). In total, 112 digital songs exceeded the 1 million sales mark last year.


What these numbers obviously don't take into account is the rise of streaming music services. The rise of services like Spotify, MOG, Rdio and even the good old Rhapsody service may just eat into the rise of digital sales in 2012.

SoundScan does track streams, though. Lady Gaga, Rhianna and Nicki Minaj lead the pack here with between 125 to 135 million total streams. The most streamed song of 2011 was Nicki Minaj's "Super Bass" (84 million streams).

7:25 pm

Spotify’s Daniel Ek at LeWeb: Two and a Half Million Paying Users, No Plans for an IPO Yet


Spotify founder Daniel Ek joined LeWeb founder and host Loic Le Meur on stage in Paris earlier today to talk about the state of Spotify. The discussion focused on a wide range of topics, ranging from Spotify’s new platform, the company’s relationship with Facebook and why it took the company so long to launch in the United States. Spotify also announced a new radio app for Spotify that was built by the company’s team in New York.

The new radio app in Spotify allows users to skip unlimited songs, something Pandora doesn’t allow its users, of course. The new “Artist Radio” experience brings Spotify on par with services like MOG, which have long offered a radio experience. For Spotify, which always focused strongly on playlists, this is quite a bit of a departure from its regular user experience. To get access to this new feature, you have to download a preview version of Spotify.

Ek also announced that Spotify now has two and a half million paying users, most of which pay around 10 Euro per month. Spotify also announced that it added about 7 million new users since (and because of) the launch of its Facebook integration. Sharing, especially through Facebook, has become a major driver for Spotify’s growth and in Ek’s view, this kind of discovery service is now a central feature of the service. The company doesn’t have any immediate plans for an IPO.

Spotify’s Origins

Spotify’s origins, said Ek, were a reaction to the piracy problem – especially in Scandinavia. While users loved Napster, this model obviously didn’t work for the music industry. Spotify did not aim to disrupt the music industry, but just wanted to make life easier for the users. Indeed, he stressed that he basically wants music to become a utility just like water or electricity.

For Ek, the user experience is the most important thing about his product. Entrepreneurs have to focus on solving problems. While many told him that having to download a client to use Spotify would be a major problem. The reality was that users loved the product because it solved a problem and didn’t care about having to download an app on their computers.

Asked about how long it took Spotify to launch in the U.S., Ek noted, it took the company two years to launch because of its extended discussions with the record labels.

In an interesting anecdote, Ek also talked about getting Sean Parker as an investor. Parker, apparently, wrote Ek a very long email, explaining the parts of Spotify he loved and hated. This, said Ek, opened up a channel for the two which then resulted in Parker’s investment.

Ek’s Advice for Entrepreneurs

As for advice to European entrepreneurs, Ek argued that execution is everything. Location, to some degree, doesn’t really matter that much in this view. People, too, he noted “is everything.” Entrepreneurs, too, should try everything but not do everything. They should also be open to learn from the people the work with.

10:45 am

As Music Gets More Social, is Apple Getting Left Behind?


When I opened Spotify on my desktop this morning, a pop-up informed me that “Spotify Loves Social” and that I should discover “great music with [my] friends.” To get started doing just that, all I had to do was click “Get Started.” Spotify also conveniently pre-checked the opt-in to Facebook’s new Open Graph feature. I’m not sure most mainstream users will understand that opting in to the pre-checked Open Graph option means that all their listening data will not just be forwarded to Facebook, but that their friends will likely see everything they play on the Facebook ticker as well. As Spotify now forces its users to have a Facebook account, chances are quite a few people will sign up for this “service” unwittingly.

No matter what you think about this, though, it’s clear that the future of music is social. Facebook has partnered with everybody who is anything in this business, including Spotify, Slacker,, iHeartRadio, MOG, SoundCloud and Rhapsody. The one exception: Apple.


As Cult of Mac’s Mark Elgan rightly points out, Facebook – at least in the music world – “has become not just a competitor to Apple, but the Mother of All Apple Competitors.” Apple, of course, has Ping, its own music-focused social network. Ping, however, is not a huge hit and whereas Apple couldn’t even get Facebook to agree to let its users export their contacts to its own social network, though, the world’s largest social network was more than happy to work with all of these other streaming music services.

If Ping were a huge hit, this wouldn’t be a problem for Apple, but Apple’s social network is neither very social nor very active these days. Indeed, one has to wonder if Apple itself is still thinking about it much, as it hasn’t seen any major updates since its launch.

Two Trends that Could Hurt Apple: Social Music and On-Demand Streaming

Two trends are converging on Apple here that could unsettle it as the leading online music provider in the long run: social music and on-demand streaming. As on-demand services like Spotify, MOG and Rdio slowly gain traction (both with their paid and free tiers), users may just decide that they don’t want to buy music but prefer a monthly flat-fee that costs less than the price of a single album instead. Couple that with Apple losing out in social, and it’s clear that some people over in Cupertino must be starting to get worried. So far, Apple hasn’t been able (or willing) to offer a flat-fee plan and its social initiatives haven’t caught on, either.

Elgan argues that Apple needs its own social network for its music and entertainment business to succeed in the long run. Maybe that’s true, but I would think that a closer partnership with the existing networks – be that Facebook or Google+ – could help the company to get into the social music game. Users have pretty much reached the saturation level when it comes to new social networks. At this point, partnering is a smarter move than building your own, especially if social networking isn’t part of your core competencies.

Enhanced by Zemanta

4:09 pm

Spotify Rocks the Desktop, Fails on Mobile


Spotify, the streaming music service which arrived in the U.S. to great hype and scarce invites earlier this week, may be one of the more frustrating companies to review. On the desktop, it offers the single best user experience of all the current streaming music services available in the U.S. today and easily bests its direct competitors like MOG, Rdio and Rhapsody. When it comes to the mobile experience, though, Spotify simply falls flat when compared to its competitors’ apps.

On Mobile, You Want to Listen to Music, Not Manage Playlists

The problem with this, in my view, is Spotify’s insistence on building its service strictly around playlists. This works great for creating shared playlists and discovering new music by browsing your friends’ lists, and it’s even a decent experience for just listening to music on your desktop. This approach, however, doesn’t quite work so well on mobile. When you are driving down the road, you don’t want to have to organize a playlist before you get started. Instead, MOG, for example, offers a hybrid on-demand/radio approach similar to Pandora, where you can choose one song to seed your playlist and then have MOG pick the rest of your list based on this. Spotify doesn’t have this kind of mode.

Spotify on Mobile: Frustrating

Indeed, Spotify doesn’t even make creating playlists on your mobile device easy and instead of giving you easy access to all your local cached files, they are somewhere in your playlist menu – some under the “starred” label, some under “local files.” Why which file is where it is, I’m not sure. The playlists themselves then are organized in alphabetical order by song title, but there is no way to browse by artist or album.

MOG, on the other hand (the Spotify competitor I’m most familiar with), offers a stellar mobile experience where the search feature actually autocompletes your queries (unlike Spotify) and where your cached files are easily accessible. While you can manage different playlists, the focus is on one central play queue. Want to add a song to it, just hold your finger over any song, wait for the menu to pop up and decide whether you want to play it next or add it to the end of the queue. Back buttons are where you expect them to be (top left instead of the “hide” button that often has the same functionality in the Spotify app – and which sits in the top right corner) and switching between song, album and artist views couldn’t be easier.

At the end of the day then, Spotify makes for a great desktop app, but most of my streaming music experience is mobile in the car or at the gym – and MOG simply beat Spotify there.

5:01 am

Everything You Need to Know About Spotify’s U.S. Launch (Updated)


After years of rumors, Europe’s favorite streaming music service Spotify has launched in the U.S.

What is Spotify?

Spotify is a streaming music service that offers on-demand music streaming. Unlike customizable Internet radio services like Pandora, Spotify allows you to pick and choose exactly what songs you want to listen to. Spotify offers a catalog of over 15 million songs.

There are currently a number of similar services in the U.S., including Rdio, MOG and Rhapsody. What makes Spotify stand out is that it also offers a free, ad-supported version, while most of its competitors only offer short trials before users have to pay.

How Can I Get it?

Spotify is now open for business, but you either need to be deemed an “influencer” to get a free accounts or get a paid account (more details about those below). To see if you qualify for an invite, head over to Klout to see if you qualify.Klout is giving away about 100,000 free accounts this way. Just enter your Twitter or Facebook credentials and Klout will let you know if you qualify.

If you are willing to pay, you can skip the line and get an account at any time. If you want to wait for a free account but didn’t qualify for the Klout promotion, just give Spotify your email address and they will let you know when a space in the U.S. beta opens up.

What’s so Great About it?

A couple of things make Spotify stand out from its competition – besides the free tier. First of all, Spotify features a strong social component. Users can share playlists with friends or subscribe to other users’ public playlists (and see updates to these in real time). MOG offers a similar feature, but it’s severely limited in comparison with Spotify’s implementation. Spotify also integrates with Facebook and lets you discover what your friends are listening to on the service.

Spotify also offers great native clients for both Windows and OS X, as well as mobile clients for virtually all the major platforms, including iPhone, Android, Windows Phone, Symbian and the Palm Pre series.

Spotify uses a peer-to-peer architecture similar to Skype that uses a little bit of space on its users’ computers to cache popular songs and a little bit of every user’s bandwidth to serve these songs to nearby users. Thanks to this, songs play immediately, just like you would expect from your local iTunes library.

Talking about iTunes, Spotify also gives you access to your iTunes library right from its own app, meaning you don’t have to switch back and forth between the two.

Brilliant, But What Does it Cost?

Spotify offers a three-tier pricing structure:

Free: the free version will be limited to 20 hours of use for the first six months after a user signs up. After that, the limit will become 10 hours per month. No song can be listened to more than 5 times.

$5/month (Unlimited): the basic paid plan gives users unlimited, ad-free access to Spotify’s full library on the desktop.

$10/month (Premium): this plan includes full desktop access, as well as mobile access (which includes offline caching on the mobile device) and access to higher quality audio streams at 320 kbps (all songs are encoded in the Ogg Vorbis format). One important perk of this plan is also that you can use the service abroad for more than 14 days. In Europe, Spotify also often allows its premium users to get early access to some albums before they become available to other users.

3:44 am

It’s Official: Spotify is Coming to the U.S.


Spotify, Europe’s streaming music darling, just announced that it is finally ready to launch in the United States. The company, which currently offers a free and paid streaming music service in a select number of countries in Europe, has long been working on a U.S. launch, but until now, it didn’t have the necessary deals with the U.S. music industry in place. Judging from today’s announcement, those deals are now in place.

You can sign up for an invite here.

As of now, though, Spotify hasn’t announced when it plans to launch yet, or what its pricing structure will look like. According to some of the rumors, one of the reasons why it took Spotify a long time to secure deals with the U.S. music labels was those organizations reluctance to let Spotify stream their music for free. In Europe, Spotify allows its users to stream a limited amount of songs for free every month. After that, users have to pay.

What made Spotify stand out among its early competitors was its ability to stream music on demand and for free. There are also numerous social elements to the service, including the ability to subscribe to other users’ playlists. Whether the U.S. version will have the same feature set, remains to be seen.

Given that Spotify is late to the party in the U.S., where services like Rdio and MOG have already managed to capture at least some of the early adopter market, it remains to be seen how well the company will do here. None of these, however, have quite the same ease of use that Spotify can offer.

This is a breaking story. We will update it as we learn more.


Enhanced by Zemanta

4:46 pm

Spotify: Deal with Sony Just "Days Away" – U.S. Launch Coming Soon?


Spotify, the on-demand music service that took Europe by storm, wanted to launch in the U.S. in 2010, but missed this deadline after contract negotiations with various record labels took longer than anticipated. Now, however, the New York Post’s Claire Atkinson heard from an anonymous “music executive” that Spotify managed to get Sony Music on board and that the company is “days away from signing a deal with” Spotify.

As we noted last week, the U.S. record labels don’t feel comfortable with Spotify’s freemium model. In Europe, Spotify’s users can choose between an advertising-supported free service and a premium, ad-free version that allows access to mobile ads, 320kbps streaming, an offline mode, and access to your music even while you are abroad.

But Would Spotify Launch in the U.S. With Just Sony on Board?

For now, I remain skeptical. Even if Sony really signs a deal with the company, Spotify probably won’t launch with just the music from one label. With just one label on board, Spotify couldn’t compete with other services like Rdio and MOG and the user experience would be quite horrible as you would constantly end up looking for songs that simply aren’t available on the service. On the other hand, once Sony signs with Spotify, others will surely follow – but that could take a few more months…

11:00 am

Spotify Launch in the U.S. Still Delayed by Record Labels' Financial Demands


Spotify, the popular European music startup that gives you free access to millions of songs, may never launch in the U.S. after all, according to a report in the Daily Telegraph. Apparently, the record labels are asking for “very large minimum guarantees,” which is something that, according to this report, is making Spotify rather nervous as its European operation is just about to be profitable and entering the U.S. market could turn out to be a huge financial risk. According to the Telegraph’s source in the record industry, this “has caused Spotify to stop and think about whether it can afford the move to the US and indeed whether it is worth it.”


The record labels are apparently scared off by Spotify’s freemium model and don’t want potential record buyers to think that music should always be free. Indeed, the industry has worked hard over the last few years (in between suing those who downloaded illegal MP3s) to wean people off the idea that all music should be available for free.

Officially, of course, Spotify still argues that its working hard to launch in the U.S. and looking for additional funding to finance this venture, but if the Telegraph’s source is right, then there is considerable doubt whether this launch will ever happen or whether Spotify will just remain an European company and cede the U.S. market to the likes of Rdio (itself founded by Europeans), MOG and similar startups.

(via: The Next Web)

10:45 am