A U.S. launch of Spotify "is looking pretty good," according to the company's CEO Daniel Ek. On Tuesday (Feb. 2), Ek was the keynote speaker at the New Music Seminar in Los Angeles. On stage and during an interview afterward, Ek was both an educator and a salesperson.
In making sure people understand the product, the company is reaching out to everybody from labels and publishers to artists and managers. "This is a huge market," Ek told Billboard. "We want to make sure we do it right." Part of the education process is describing what Spotify can do on the massive scale afforded by a market the size of the United States.
During his keynote, Ek offered the audience an introduction to the service and his goals. Offering recorded music is just part of Spotify.
Ek described Spotify as a platform through which tickets and merchandise may be sold. In private, he emphasized a desire to harness its user data to help artists better understand their fans. And he talked about the need to segment the market and customize the value proposition to each segment. As a product, Spotify has much mainstream potential. As a company, it's definitely shooting for mainstream users.
Here are the key points of Billboard's interview with Ek.
-- On the timing of a U.S. launch: "We're in the final stages of setting up. Yesterday we signed a data center contract, which is huge for us. We're making a huge investment in servers and all the infrastructure here in the U.S. So, we're gearing up for a U.S. launch. I can't say if it's in one month's time or two month's time, but it's looking pretty good."
-- On subscription growth in Europe: Ek says Spotify is adding a few thousand subscribers a day (he would not be specific about the exact number).
-- On Spotify's education of the U.S. market: "We're going to show Americans how the service works. The reality is that people don't get the consumer proposition of subscription music on a massive scale. So we need to educate the market."
-- On having a download partner for a U.S. launch: "We are definitely going to have a download partner in place in the U.S. We think that's a powerful way of driving additional sales."
-- On Spotify's value proposition: "We're not only an ad-supported music company. We're a subscription music company. And we're a download music company, too. In certain territories, in downloads we're number two or three after iTunes. So, through our platform there are different monetizations that are happening."
-- On the possibility of incorporating a way to follow artists on Spotify: "The only thing I can go into is we will likely adopt something similar (to Twitter) where you can follow or become a fan an artist. What that means initially is that everything on Spotify will be visible to that user in a way they can discover something new by Madonna or another artist they enjoy. But that could also potentially mean there could be a messaging channel directly from the artist to the fans. And that's likely something we're going to adapt."
-- On Spotify as a platform: "We want a platform where we can lots and lots of experimentation. We don't know what will work for an individual artist. Some will benefit from scarcity. Some will benefit from it being widely available, even free. They might make their money by giving away all their music for free ... In the best of world, Spotify will become the platform where you manage your music and because you do that, we will figure out what kinds of offerings you're interested in. For certain types of artists, you might be interested in something unique. You might do a meet-and-greet. It might be that you want it on vinyl because it feels better. Or just go and see the show. Or have the merchandise."
-- On getting people to upgrade to the paid version: "We're in discussions with manufacturers where they even have Spotify buttons -- a physical button -- on the phone that can play content. That's fantastic. Who knows if it will ever be live -- if ever -- but just the fact that sort of mindset is coming in very promising for the industry."
-- On adding value to companies like telecom services: "You will find us bundling it more and more with services. We did something in Sweden with Telia, which is the biggest carrier, where even if you bought a netbook with a 3G data card in it, you got Spotify included. They know that drove sales, but not only that it reduced churn. For carriers, that's the probably the biggest problem right now."
-- On the prominence of albums at Spotify: "Thirty percent of all playlists are just albums. Another thing the industry thinks it has learned is that the album concept doesn't work. They're trying to sell singles. But in all fairness I think the album definitely matters."
-- On experimenting with different products: "I think if we start getting the entire music industry with us on this, we can see them experimenting on things like putting lyrics next to every track, or videos, or behind-the-scenes videos if you actually buy the album. Or you might be getting a playlist with the live set list of the show you saw."