Opinion and analysis of the day’s music news.
Is Spotify Rattling Apple?
— Is Spotify rattling Apple? Judging from a post by CNET’s Greg Sandoval, Apple is taking Spotify seriously. From the CNET post: “…Apple executives (are) worried about the effects of a free music service might have on the rest of the market. They noted that it’s tough to sell something that someone else is giving away, the sources said. One industry insider said it is only logical that if Spotify were allowed to launch a free-music service here, at a time when Nielsen recently reported that the growth of digital sales has flattened out, it could eat into the businesses of proven revenue-producers like Apple and Amazon.”
First, let’s consider that Spotify is often cited as a factor in the rise of download sales in Sweden – the passage of a tough anti-piracy legislation is also a factor there. That might not happen here, but Spotify’s impact on U.S. download sales is a big question mark.
Until now, Apple, has had little to worry about. Ad-supported music has not been a slam dunk. MySpace Music, the ad-supported site in which all four majors own equity, has millions of tracks available for free streaming – but people aren’t showing up in the numbers hoped for. The most valuable digital music consumers are still buying downloads.
The main issue is not that free music will eat into download sales. Free music already exists in many shapes (YouTube, MySpace, Vevo). The critical issue is that Spotify has a product with serious mainstream appeal. There’s a difference between media hype – which even Spiral Frog got – and consumer hype. Spotify has consumer hype.
Given the limited appeal of paid music subscription services, Spotify’s freemium model does make some sense. The company has long taken the position that it’s best to get as many people as possible using the product. For a service to gain real momentum, it needs to be everywhere (like Pandora). Labels need to ask themselves if they’d rather have 1 million paying users and 10 million ad-supported users or just 1 million paying users. They need to consider the benefits that come from having more than fewer users.
One benefit of mass usage is the proliferation of playlist sharing. In Europe there are many websites that do nothing more than offer Spotify playlists. That’s a positive result of a large network of users and it reaffirms the service’s popularity. It’s doubtful many of those sites would exist if Spotify had only its 500,000-plus paying users. (CNET)
Inside The MPAA’s Strategy Against Piracy
— At Copygrounds you can read a long interview with the MPAA’s Fritz Attaway and Craig Hoffman. The two were guests in a classroom discussion in a class on digital production at the University of Texas. The interview provides a rare glimpse into the MPAA’s thoughts on its strategy against piracy, intellectual property and rogue cyber lockers. Here Attaway answers a question about the possibility of legislation that would mandate ISPs to implement anti-piracy protections: “It’s based on voluntary compliance. I don’t believe there is any legislation pending but we have considered the idea of providing some kind of safe harbor for ISPs who voluntarily choose to take measures to discourage infringing activity. We definitely encourage that kind of action but we are not pressing for a legislative mandate.”
The interview took place on September 30, ten days after Senator Leahy announced the Combating Online Infringement and Counterfeits Act. The act does not seek the monitoring and punishment of broadband customers, but it would ask ISPs to block access to certain sites deemed to be trafficking in pirated content. (Copygrounds, via TorrentFreak)
Friendly Fire Signs With RED
— Friendly Fire Records has signed an exclusive distribution agreement with Sony Music’s RED Distribution. The deal covers physical, digital and mobile distribution for the label’s 20 catalog titles and new releases in the U.S. and select foreign markets. The first two releases through RED will be new albums by the Concretes and Violens. Friendly Fire’s catalog has titles by Asobi Seksu, Camphor, Oh No Ono and The Phenomenal Handclap Band.
Arrests In Connection With Mulve
— U.K. police have made arrests in connection with the operators of Mulve, a music download site that has had small corners of the Internet abuzz for the last few weeks. (TorrentFreak)
