Business Matters: If Big Radio Had Pandora's Royalty Rate, It Would Owe Billions
Business Matters: If Big Radio Had Pandora's Royalty Rate, It Would Owe Billions

Upcoming changes to Spotify's music recommendations and improvements coming to Beats-owned Mog - or whatever it will be called in the future - show music services understand it's time to stop boasting about the size of their catalogs and start leading people to the music they will like most.

Spotify will introduce new discovery features that allow users to follow artists -- a feature CEO Daniel Ek mentioned in an interview with way back in February 2010 -- and receive recommendations from suggestions from a network of celebrities and tastemakers. "Spotify is great when you know what you know what you want to listen to, but not so great when you don't," Ek said last week.

That's a big change from Spotify's previous mantra of discovering music through friends. There was a big downside: If your friends weren't sharing music, you had to devote time yourself to finding it. It wasn't until Spotify introduced third-party apps -- including Billboard's -- that it became a viable music discovery platform.

The future version of Mog, to be reformatted by owner Beats Electronics, will also seek to improve its recommendations. Trent Reznor told the New Yorker the updated service will create a recommendation platform in which "the machine and the human would collide more intimately." A Beats insider told the updated version of the service could launch by mid-2013.

Spotify and Mog are addressing an important problem: Music discovery isn't easy. It isn't easy when a service has catalog of millions of tracks with hundreds of new tracks arriving every week. And discovery definitely isn't easy when people have far more information at your fingertips than time to spend using that information. People need context and they need it quickly.

Some entrepreneurs are already working on these problems. The Spotify app helps a person keeps track of favorite artists' recent releases, shows friends' listening activity and recommends new releases. It's a helpful tool for the heavy music user. Less active music users have numerous options that require little investment: Songza, 8tracks, Senzari, Soundrop (currently just a Spotify app) are young services with new spins on Internet radio.

A November 2011 NPD Group report on music discovery suggests most people are comfortable with the ways they discover music. Just over 50% of the groups of consumers NPD calls "comfortable" and "convert" (groups that are modest and light spenders on music) are content with the sources of music available to them, and very few of them feel like they are missing out on new music they would like to hear.

But these groups probably haven't come across subscription services yet. They are undoubtedly listening to radio, the easiest of the music discovery tools available to them. But when they do start using Spotify, Mog, Muve Music, Rhapsody or any other services with a multi-million-song catalog, they will need the sort of discovery tools that make these services easy to use.

Questions? Comments? Let us know: @billboardbiz