Add Daniel Ek, the co-founder of music streaming service Spotify, to the list of people who think consumers will continue to pay for music. Making connections, however, could be a bigger calling card for the promising startup. From an article at The Guardian:
If you truly connect and empower your fan base, people will pay for music. Perhaps that revenue won't come primarily from selling records, but ad-supported music services, subscription music, downloads, merchandise and live shows as well as CD sales are all going to make money for labels and artists.
I think the music industry as a whole can be in a better position than it has ever been. There has been a massive shift from ownership to access but people will pay for music if packaged correctly and it offers them something special.
Music services currently play a limited role in encouraging sales. Ek pointed to a way to offer greater value to artists and labels. In an apparent rebuff of critics of the ad-supported model, Ek told The Guardian that labels will be able to target their audience and, most importantly, artists will have a direct link to fans. If that is truly the case, Spotify will have found a better way to wring value out of a free service: Making connections.
Currently, Spotify’s role in connecting artists to their fan bases is very limited, and no plans have been announced that will directly connect listeners to artists. As it stands now, Spotify streams music and allows users to create and share playlists. As is the case with other music services, there is a wall between artists and users. If a user discovers a new artist on a service and desires a connection, the wall must be scaled.
When a service such as Spotify actually connects listeners with artists – taking listeners to an artist’s web site, or allowing the user to sign up for the artist’s mailing list – it will provide a value far greater than the interactive streaming royalties it currently pays.
Awareness allows a connection, which begets a relationship and then some sort of value proposition. Making the connection is the important part. It is far more valuable to an artist to get 10,000 visitors to his website than have 10,000 strangers stream his music at Spotify.