Since the last time I wrote about the competition among the big tech companies, “cloud music” market had warmed up with new service launches and now the consumer seems more ready for the next step. But what is really the next step and has there been a winner of the competition to lead the “long-waited” revolution in the music consumption habits?
First of all whichever cloud storage service you have been using to access your documents on multiple devices, you should have tried Apple’s “iCould” and consider giving a chance to “iMatch” when it becomes live in your territory. Although being criticized for its late product launches, Apple as the company that changed the mobile entertainment market with its iPhone and digital music market with iTunes, has given meaning to “cloud” market. It is its strong branding that created most of the awareness among non-tech savvy consumers. People who waited for hours to purchase iPhone4S and/or upgraded its running software had welcomed iCloud while keeping the term “cloud” forever in minds. The technology, which has rooted years and years ago, had become a “buzz word” thanks to money spent on advertising (directly & indirectly) and consumer friendly gadgets (such as iPad, iPhone).
Conversely, the last 6 months have seen another tech company (which we used to categorize under start-ups) promoted to the upper league with landing to the American soil. Spotify has been the most talked about service since its launch in the US, with the help of Facebook support, high press and online media coverage but most of all due to its appealing product. Probably it wasn’t just the number of paid subscribers Daniel Ek was counting after Spotify was introduced in the biggest music market in the world but also the volume of requests from the media should have kept him busy for months.
When there is attention growing on something/someone we know very well that people with related/unrelated complaints will show up. Spotify has been in the center of discussion about artist payouts since it reached 10 million user base so it was no wonder US press would heat up the debate following some independent labels’ decision to withdraw content from the streaming platform. You probably read a lot of columns and comments on whether free streaming cannibalizes album sales or artist/label digital royalty income so I won’t raise another though on the subject. Rather I’d like to remind the artists and the labels good old days of the radio. The times, when the music industry was sparing a lot of money for the broadcast of their new music on the music radio and TV channels (which are in the essence streaming music to their listeners), the labels were not concerned with performance rights income coming from the collecting society (calculated according to the number of airplay). They were happy receiving back some of what they have paid. Promotional budgets were negligible for the artist due to high volume of physical sales.
Today, in the digital age, in the free world of the Internet, it is possible to reach to fans without the need of marketing budgets that the big companies apply for the artists. It would take longer and more hours & tech savvy friends would be needed to get involved. But still, you can make someone in the US listen to your home-recorded track living in Germany. So all you should consider is to reach/find effective ways to collect your royalty.
Spotify and other streaming music services are doing what the radio networks do years ago, presenting new artists to people. Except for the fact that we can choose the music we are interested in listening to on most of the digital music services now. It means you have to impress the listener more than the executives of the channel. I doubt withdrawing artists from loved platforms is a method to create attachment among potential fans for your artists.
It’s the brands and their investments on commercializing their products that create awareness in markets and in the digital age, where the abundance is the main obstacle for the creators, being part of the trends is the absolute way for monetization.
Spotify and Apple are two significant players in the cloud music market, which will be here for long years. It would be a brave decision for those in the music industry who abandon both or any.
Following Amazon’s surprise launch of “Cloud Drive”, two weeks ago the music industry got a new shot by Google introducing a basic “music locker” without any licenses. It was pretty much obvious that the company couldn’t wait no longer for the approval of the labels and chose to run for the second place in the “cloud music race” rather than taking time to secure rights to launch a fully-featured service.
I haven’t gotten chance to use the service, as it’s currently available in the US, but reading the reviews it is basic cloud music locker offering to store and stream your music collection on the move. The catch is it’s restricted to Android-based devices (phone, tablet, Google TV) and the music uploaded to Music Beta cannot be downloaded again (supposedly to prevent users to turn the locker into a file sharing platform).
Making a direct comparison Amazon’s Cloud Drive looks practical and more relevant to me. Amazon providers a way for its consumer to keep their digital music purchases forever regardless of computer crash, etc. (which might result in more people downloading music from Amazon Music Store) and organise and access their music libraries in the cloud. Conversely, it’s a weak proposal for Google whose music ambition could go further simply adding a streaming option on the Google Search.
It might be on the roadmap, however; to make an early move which offends the music industry does not sound as a wise decision to me. Furthermore, I can’t see why I would choose Google’s Music Beta to store my music, when there are plenty of free options in the market.
On the other hand, I believe a new streaming audio feature supported with a music locker which recommends related music and video files on YouTube could attract more people. Given that the service (which operates on a basic cloud technology) has already changed the way we consume media online it has a potential to easily become the centre of the music consumption, as well. When you google a song title it’s the video files that are listed on the top. We know that it is for a reason.
Apple, who is discussed to be left behind in the “cloud race”, will probably launch its streaming/subscription service offering a range of features. So it will be seen that it’s not always the most important thing in the digital era to “be the first to launch your solution” but to “introduce something proposing to solve a problem of the user”.
I believe it was a big day yesterday for the digital music’s future, because for the first time since Napster’s dead back in 1990s, users of one service raised their voices (as one) for their music pleasure being limited. Following Spotify’s announcement in the morning that “free service will be limited to 10 hours per month (in the current Spotify Open) and 5 playbacks of individual tracks will be allowed for each user”, media and the users with an ability to express their feelings (thanks to “the internet”) reacted quickly.
There were two sides of the discussion, one of which blames on the music industry for pushing the company for better conversion rates to its paid subscription and other rages on Spotify executives with a threat to switch back to piracy from 1st of May, the date when those new regulations will take place.
I think what we are seeing is the recording industry and the technology companies trying to compromise on a best business model which will bring in a global music service providing better economics for both. It is “the value versus price point” discussion and (again) efforts to rebuild a controlled environment.
Did you notice the change that has been taking place since the launch of Spotify in 2008? 10 million people from 7 countries in Europe are using one streaming service and listening to more music than they used to and almost 10% of which are paying for this service for a premium access that could be compared to owning all the music in the world. Spotify has given courage to the music industry to challenge the ecosystem which is obviously in the favour of free consumption and so newborn services can no longer dare to offer a “freemium” model and have to stick to two tier pricing -$5 and $10 for web-only ad-free access and unlimited access, respectively- which I suspect will be named as the “universal pricing model” for cloud-based services.
I’ve tried Rdio in the US, which looks like a clone of Spotify, during its very short trial period and I’m pretty sure that no one could be convinced to pay for a premium service if they are not given enough time to experience the beauty of cloud music.
According to Daniel Ek, CEO of Spotify, it’s vital that they continue offering an on-demand free service to millions but to make that possible they had to put some limits in place going forward. I believe his and his company’s honesty on this decision and wishing that the results will be supportive on their mission. However, being aware of the fact that the usage data will provide a better understanding in the following six months if they are in the right direction or not, I still doubt that the timing is right.
Cloud storage has gotten into the spotlight once again with Amazon’s launch of its “Cloud Drive” service offering 5GB free space to its registered customers. All the members of the digital media have agreed that in terms of functionality it is not a “ground-breaking” solution. However, the service is obviously “useful” and it promises to challenge the recording industry as well as heating up the competition within the giants in the digital music environment which have been meaning to craft their own cloud solutions for long time.
As a person who has been using cloud-based services -from different locations- starting with MP3Tunes, I have to question its accessibility first, as I believe storage platforms more or less are the same when it comes to user interface and usability. Amazon’s Cloud Drive is restricted for the use in the US, whereas you can upload your audio, video and image files to your folders “without any warning message”. When you intend to stream your already uploaded music files on its own music players you are warned that you cannot stream them unless you are in the States.
Amazon has been criticised on its service’s illegality by the record companies and publishers since its launch. The company argues that they don’t need licenses to store the customers’ files, just as its start-up competitor mSpot has been doing and which argument forms the bases for MP3Tunes law case against EMI Music. However, I’m living in Europe and I can’t stream my music on Cloud Drive. Why? (Could it be that Amazon worries about licensing issues more than they say?)
In a letter signed by the Amazon team, the company pointed out the “potential enhancement to “Cloud Drive” and “Cloud Player” that would require licenses” such as, storing a single copy and serving customers with the files on its servers (after matching the metadata), similar to Lala and Catch Media’s cloud solutions. Former was acquired by Apple to form the basis of its streaming subscription service which is supposedly an all-access service for your already downloaded music from iTunes store. It seems like labels think they still have rights over your digital purchases and try to make you pay for the playbacks on the cloud.Therefore they have created a “restricted place”, by the help of IP rights they own, in a liberated world of the internet where people easily share files with friends without an exchange of any money and calling it “a sign of support to the new technologies”.
Cloud music should mean freedom to digital music, but it turned out to be a restricted area thanks to the record companies. They are doing nothing but repeating their mistake of DRM. Playback devices can go on sale without any additional licenses whereas cloud storage is accepted as violating copyright law. Both are storing music which could be obtained through illegal sources (obviously majority are) and giving option to stream either on device or on client. Does Apple pay a levy on each iPod, iPhone sold, or a license for the streams on those?
I haven’t paid for a single digital download because I haven’t seen any value in a digital file which could be lost/deleted easily or means hassle for the playback on every device. In other words “legal digital music has never been free enough to worth monetary value for the consumer”. Now that we have cloud music solutions which proposes a way to monetise their music for the owners while introducing a different experience of music consumption for the listeners, we have freedom for our digital assets in the virtual world. And the music industry wants to limit our freedom once again.
Two days ago Spotify’s CEO Daniel Ek announced a new milestone for the service at his blog post. In two years after celebrating one millionth subscriber in March 2009, it was time to reveal the same number again but this time to show off the volume of people in Europe who paid at £9.99 (changes according to the subscription type) rather than new users mainly invited by the early adopters. What does that mean for the digital music market?
First of all it provided a sign of hope for the industry which has chosen to stay sceptical for the streaming music services promising monetisation through turning free users to paying subscribers. Today Spotify has over 10 million users (6.7 million of which have used the service in the last 30 days) assumably which are generating over £40 million for the rightholders. Furthermore it has been providing a service which has influenced consumption behaviour introducing a better (relevant) way to consume music in the digital age.
So what could happen if more people shift to the cloud in coming years? Undoubtedly more media would be accessed and consumed without worrying about the price of each product, whereas interest in new devices will increase with mobile phones becoming the centre of the consumption. Investments which are like the blood cells for the startups will be directed to cloud technologies and new marketing tools to introduce additional revenue streams for content owners and retailers.
When it comes to the value, I believe we should be expecting a rise in the value of the interactive (live) means of experience whereas recorded media mainly comes with the devices or other purchased services for previewing purposes or for daily consumption.
Glenn Peoples of Billboard.biz shared on Twitter yesterday his calculation of the amount of investment in the cloud music as $224 million (including Spotify’s $100 million) which is incredible at the same time questioning in current conditions, where Cloud music still lacks a reliable legal basis. I reckon things might get less complicated after Google launches its cloud service in a month or Apple prefers to name it “right to re-download previously purchased tracks”. However, consumer adoption will always stay as the key and to keep the investments in that level services such as Beyond Oblivion need to start showing results rather than financial muscles.
Congrats and good luck to Spotify for the US launch.