Business Matters: Flaws in the Argument That Spotify Will 'Never' Be Profitable
Business Matters: Flaws in the Argument That Spotify Will 'Never' Be Profitable

Spotify is certainly making its presence known in the U.S. this month.

Immediately following its highly visible appearance at the Facebook f8 conference last week, a number of new developments have emerged.

First, its invite-only beta phase is over, and is now a public beta open to all.

Second, all new accounts will get six months free.

And third, in a bit of controversy to stir things up, all new accounts are required to sign in using a Facebook account.

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Let's start with that last one. Any new Spotify user now has no choice but to establish a Facebook account if they want to use the service. Don't have a Facebook account? You need one if you want to use Spotify.

News of the requirement broke today, when new users began seeing the following message:

"You need a Facebook account to register for Spotify. If you have an account, just log in below to register. If you don't have a Facebook account, get one by clicking the 'create an account' link below."

News of the move has generated no shortage of complaints. But it's clear that both Facebook and Spotify are now musically joined at the hip. While any streaming music service can take advantage of Facebook's new notification capabilities, Spotify was by far the showcase provider. Spotify in return has hitched its cart fully to the Facebook wagon. In essence, Spotify just became Facebook Music.


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To capitalize on the exposure this brings, Spotify has opened itself up for all to use. Previously, one needed an invitation to join the free Spotify tier. Of course obtaining one was as easy as submitting a request to their site. But now, that extra step is gone, and everyone new to the service gets six months of free music (with ads, of course).

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On paper, all seem like good strategies, but there are detractors. On the Facebook end, Spotify has been accused of selling out to the "devil" by some, mostly Facebook critics. But Spotify is likely far more interested in the 800 million Facebook users than the few outspoken detractors. More concerning are the criticisms of the service itself. For instance, Facebook offers a cool feature that lets connected friends listen to the same song at the same time. But it requires all involved to have Spotify installed and running, rather than operating through Facebook. That's understandable, but clunky.

Shortcomings aside, the ultimate win here is in exposure, something Spotify as a subscription music service (and new one at that) needs desperately to make a real impact in the U.S. The company claims 2 million paying subscribers worldwide today. No word yet on how many of them are in the U.S., but it's a figure that will have to ramp up quickly, and Facebook is better at creating mass scale for cooperating services than almost anyone.

Questions? Comments? Let us know: @billboardbiz

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