By Laura Schocker
The online music streaming service Spotify has been credited with helping a small revival in the British music industry. But it’s also changing the way we listen to music.
Imagine a giant jukebox – loaded with millions of pop songs, ready to be accessed in an instant. Imagine said jukebox sitting, virtually, in your living room – to be accessed in an instant through your computer.
Big deal. What would have sounded like a far-fetched fantasy 10 years ago, is an everyday reality today. The internet is crammed with such services – from Apple’s iTunes to Amazon’s "MP3".
Music is everywhere online, but mostly subject to one huge caveat – it costs. Those who don’t pay tend to steal it using one of the numerous unofficial file-sharing download sites. It’s a trend which has been credited with bringing the music industry to its knees.
But internet users in the UK and a handful of other European countries have been exploring a third way in recent months. The free, legal, on-demand music streaming service – the most talked about is Spotify.
Last week, music industry experts were mildly encouraged to discover that after years in decline, the overall size of the British music industry grew by almost 5% in 2008. And Spotify was one of the services credited with helping arrest the decline.
Spotify began in Sweden in 2006 as a downloadable desktop application allowing anyone with a computer to search for and then stream from a selection of about five million songs. It is available in free or paid-for versions – the former inserts a 30-second advert every few songs, while premium users get their music uninterrupted for a £10 monthly subscription. Artists receive a royalty.
It’s not the only such service available. We7, set up by pop star Peter Gabriel, has a similarly large catalogue and operates through a normal web browser. Each song is prefaced by a brief advert. Music-based social networking site LastFM, which also offers streaming, has built a big following.
Remember the album
But it’s Spotify, which has two million users in the UK, that has been grabbing the headlines of late. And, for those who have always preferred to stay on the right side of the law when it comes to music online, there’s anecdotal evidence it’s changing the way people are listening to music.
"Now everybody is downloading songs one by one, but Spotify has changed that because you have access to a whole album"
Spotify fan Sean Flynn
"It’s a handy tool for testing out music that you’re not that familiar with yet," says Jim Edwards, an artist from Newcastle who signed up for the free version about four months ago. "I have music on all day."
Whereas Apple’s iTunes, the biggest of the music download services, only allows users to preview a 30-second snippet of a song to decide whether or not they like it, Spotify allows users to listen to whole songs, whole albums, again and again.
Julie Wright, of London, who has been using Spotify for about two months, as a free subscriber, says it’s a useful money-saver in these straitened times.
"Because you’re watching extra spending, you want to be very careful about what you buy," she says. "You don’t want to buy an album you’ll end up hating." But she admits she has yet to covert her listening of an album on Spotify to an actual purchase.
The ability to sample at will is one of the big selling points, says Anders Sehr, Spotify communications manager.
"If you read something from a critic in the newspaper in the morning, you can go home and listen to it right away in the evening," Mr Sehr says. "This has really changed the way people can access music."
Serious holes
It’s not just new music, either – with millions of songs, listeners can rediscover old favourites. "I can get music from the past that I haven’t even thought about," says Sean Flynn, a masters student in London, who signed up about two weeks ago and uses Spotify to browse 90s rap music.
And the music isn’t the only thing that’s a blast from the past – it’s the approach, too, according to Mr Flynn. "Remember when you used to have actual CDs and you used to know every song Now everybody is downloading songs one by one," he says. "Spotify has changed that because you have access to a whole album."
Whole album, maybe, but there are some notable holes in Spotify’s catalogue. While the site is adding an average of 10,000 new tracks every day, big selling artists like Pink Floyd, Metallica and Led Zeppelin have yet to grant licensing rights to their music.
And while it may be changing listening habits, is Spotify as revolutionary as has been suggested Mark Mulligan, vice president of Forrester Research, thinks not.
"In many ways, Spotify doesn’t actually do that much which hasn’t been done before," he says. "It just delivers a really easy-to-use, good service."
A lack of design sophistication and clutter is the key to the program’s success, Mr Mulligan says. And, he adds, the basic approach allows people to search quickly for and stream free, on-demand music.
The simple design – which some users compare to the iTunes layout – is no accident, says Mr Sehr.
US lock out
"We want to focus on ease of use, simplicity and speed," he says. The name comes from the company founders’ hope to allow users to "spot" and "identify" good music.
"People don’t want to spend time learning new programs," says Mr Sehr, explaining that if they know how to use iTunes, catching on to Spotify is simple. "As soon as you get it up and running, you have an idea of how it’s going to work."
But changing the way people access and listen to music doesn’t necessarily mean Spotify is an easy fix for the music industry, says Mr Mulligan.
In 2007, 20 illegal tracks were swapped for every one legal track sold, according to the International Federation of the Phonographic Industry. And while sites like Spotify can help, they’re not the "holy grail", warns Mr Mulligan.
Perhaps the most basic limitation at this point is that streaming music doesn’t replace downloads that can transfer to portable music players. Though an iPhone application, announced earlier this week by Spotify and waiting on Apple approval, may allow users to download a cache of music, it’s not the same as having every track at your fingertips.
And while the ability to sample new tracks on streaming services may reduce the amount of total time spent on illegal piracy sites, Mr Mulligan says, people still want on-the-go and on-demand music delivered directly to their earbuds. "I do not think Spotify is anything near a replacement for file sharing," he says.
Another big question for Spotify is whether its business model can sustain long-term success. According to Mr Sehr, the company has yet to turn a profit, but they are hoping to do so by the end of this year or early next year.
Even with revenue from the advertising version doubling each month, Mr Mulligan says the company needs to convince users to pay the monthly subscription rate to be viable. The iPhone app, which would only be available to premium users, may just be one way to do this, says Mr Sehr.
And then there’s the US question. At the moment, the potentially huge American audience is locked out of the Spotify party, finding itself in "the unfortunate position of being the big audience," says Farhad Manjoo, technology columnist for Slate online magazine.
"It probably is easier to get licensing to do these kinds of things outside of the US."
While he’s waiting for an American Spotify, Mr Manjoo has used a proxy server to download and try out the service. Though it may not yet be meant for American ears, so far, he likes what he hears. "As far as I know, it is better than everything that is available," he says. "It’s easy to understand and easy to grasp."
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