Spotify commits commercial suicide?

[Sirius]

Originally Posted by danielf

What legal free alternatives are there (that have a similar number of titles on offer)?

Well after a bit of searching i have found what looks like a new home for my streaming service however i don't think it legal so cannot give its name here

Originally Posted by Chris

Well, I don't know how many, but I have been playing with Grooveshark this week and it hasn't disappointed me so far - everything I have searched for has been in their catalogue.

That's because, in most of the searches you'll be doing, most of that 'catalogue' has been uploaded by the users of the service. They have not been provided by a legal agreement with the record companies, people have uploaded whatever they want to it. It's basically a streaming P2P service. It's legal status is dodgy.

What Spotify appears to have forgotten is that the customer is always right ... by that I mean, if you offer two services (as Spotify did), and one of them is six times more popular than the other, then Spotify should be looking at ways to maximise its income from that service, not looking for ways to wreck it in order to force people onto the less popular alternative.

We do pay for music - we pay for it on commercial radio every day by listening to commercials. That's how 6 out of every 7 customers was happy to pay for it on Spotify's service.

I think what is really at the heart of this is Spotify's failure to agree a sustainable deal with the record labels.

I think whatever is the case, it wasn't able to provide music for free and make a profit. It may be the record companies asking too much, it may simply be that advertising didn't cover the cost of a reasonable deal with those companies.

[peanut]

I think it is a bad decision. I've used spotify now and again to listen to a certain track, but those that pay for the full subscription probably buy original CDs. Those that only use spotify because it's free probably download all their music anyway, so if you can get your music for free what's the point in paying for it via spotify. So they'll lose all those users now and the ad revenue from those.

Originally Posted by peanut

I think it is a bad decision. I've used spotify now and again to listen to a certain track, but those that pay for the full subscription probably buy original CDs. Those that only use spotify because it's free probably download all their music anyway, so if you can get your music for free what's the point in paying for it via spotify. So they'll lose all those users now and the ad revenue from those.

They have to pay per track streamed. I am guessing that the ads shown don't cover that, so if they can't make money of those users I doubt they care if they go.

[peanut]

Originally Posted by Damien

They have to pay per track streamed. I am guessing that the ads shown don't cover that, so if they can't make money of those users I doubt they care if they go.

True, then time will tell to find out if there are enough people that are willing to pay for the full subscription to cover their costs. The loss from the ads ain't going to help them much either way.

Originally Posted by Damien

They have to pay per track streamed. I am guessing that the ads shown don't cover that, so if they can't make money of those users I doubt they care if they go.

That's because they have tried to have their cake and eat it. How can you sell advertising space to someone when they know the advert that follows theirs will be a plea from Spotify asking the listener to 'upgrade' and get rid of the adverts? That's a tough sell in anyone's book.

Useful link re Grooveshark BTW, thanks ... more reading up required I think.

Originally Posted by Chris

That's because they have tried to have their cake and eat it. How can you sell advertising space to someone when they know the advert that follows theirs will be a plea from Spotify asking the listener to 'upgrade' and get rid of the adverts? That's a tough sell in anyone's book.

I think that was because they decided that adverts wouldn't be enough to cover their costs and wanted to move people to the subscription plans. There are very few examples of services making money via advertising alone, especially services that depend on content rather than searching or social networking, where the cost of a page being served is very cheap as it's contents are generated, rather than 'created' as a song, video or piece of writing is.